CLOs

  • First LBR PCC investor signed

    Sector developments and company hires

    First LBR PCC investor signed

    Lloyds has announced that Ontario Teachers’ Pension Plan Board will be the first investor to support underwriting through its multi-insurance SPV, London Bridge Risk (LBR) PCC. LBR was established in January of this year with sponsorship from Lloyds, with ambitions to create a market that invites new forms of capital and allow for easier access .......

    Market Moves 10 November 2021

  • Multi-currency CLO closed

    Sector developments and company hires

    Multi-currency CLO closed
    Barclays has closed a multi-currency managed cashflow balance sheet CLO. Dubbed Duke Global Funding, the £4bn-equivalent transaction is backed by 519 senior secured and senior unsecured loans extended predominantly to large corporate obligors in Western Europe and the US. The underlying loans are denominated in US dollars, sterling and euro.

    In terms of geographical diversification, the initial portfolio .......

    Market Moves 9 November 2021

  • US CLO equity outperforms

    Sector developments and company hires

    US CLO equity outperforms
    US CLO Equity cashflows average 15.2% across 1,038 BSL transactions that have had four payment dates in 2021, according to a report from JPMorgan CLO research analysts. This is the highest since 2016, which averaged 19.6%.

    CLOs that were reset in 2021 fared best with a 22% average return driven in part by a small minority that .......

    Market Moves 8 November 2021

  • Fed set to reduce asset purchases

    Sector developments and company hires

    Fed set to reduce asset purchases

    The New York Fed’s FOMC has increased the System Open Market Account (SOMA) holdings of Treasury securities by at least US$70bn per month and of agency MBS by at least US$35bn per month during the monthly purchase period beginning in mid-November. Additionally, SOMA holdings of Treasury securities will increase by at least US$60bn per .......

    Market Moves 5 November 2021

  • Servicers facing 'unprecedented' turnover

    Sector developments and company hires

    Servicers facing ‘unprecedented’ turnover

    US commercial mortgage servicers are facing unprecedented turnover levels and filling open positions in the tight labour market may ultimately increase the cost of servicing loans, Fitch suggests. However, the agency notes that to date, there have not been any noted declines in servicing proficiency among Fitch-rated primary, master and special servicers.

    Fitch reports lower-than-average employee .......

    Market Moves 4 November 2021

  • SLM EODs eyed

    Sector developments and company hires

    SLM EODs eyed

    Fitch has downgraded from single-B to double-C the outstanding class A4 and B notes of SLM Student Loan Trust 2007-7, 2008-1 and 2008-4, due to the legal final maturity date of the class A4 notes being approximately three months away in January 2022 for SLM 2007-7 and 2008-1 and less than 10 months .......

    Market Moves 2 November 2021

  • Matryoshka doll?

    Use of proceeds proving contentious for ESG securitisations

    The EU taxonomy regulation and Sustainable Finance Disclosure Regulation (SFDR) are posing challenges for securitisation issuers and investors. For now, use of proceeds remains the most contentious issue.

    Announced in late 2019, the European Green Deal reflects the EU’s ambitious bid to lead the world on climate action. The deal’s commitments became legally binding by the entry into .......

    News Analysis 1 November 2021

  • Securitisation stamp duty eyed

    Sector developments and company hires

    Securitisation stamp duty eyed
    The UK government is introducing legislation within Finance Bill 2021-22 that provides a power to make stamp duty and stamp duty reserve tax (SDRT) changes relating to securitisations and ILS by secondary legislation. The power will be a freestanding provision and will allow HM Treasury to make regulations to provide that stamp duty or SDRT is .......

    Market Moves 29 October 2021

  • Still strong

    European ABS/MBS market update

    In a quieter week than of late, two full capital stack deals have been competing for investor attention in the European ABS/MBS primary market. Strong demand for both Pixel 2021 and SC Germany Consumer 2021-1 suggests that the market is still strong.

    “I think both deals have been executed very well,” notes one ABS/MBS trader. “For SC Germany Consumer .......

    News 28 October 2021

  • New banking rules

    Sector developments and company hires

    The European Commission has adopted new EU banking rules under CRR 3 and CRD 4, with the aim of ensuring that EU banks become more resilient to potential future economic shocks, while contributing to Europe's recovery from the Covid-19 pandemic and the transition to climate neutrality. The Commission notes that while the overall level of capital .......

    Market Moves 28 October 2021

  • Covid dip

    CRE CLO churn rates drop

    Churn rates in US managed CRE CLOs continue to decline, according to new research from KBRA assessing collateral turnover in recent vintage transactions. The study analysed all CRE CLO transactions issued between 2017 and 2020, gathering data on US$23.3bn in issuance across a total of 27 transactions. Most of these transactions had reinvestment periods of 24 months (51.4%) or .......

    News 28 October 2021

  • Comprehensive metric?

    Total alpha touted as CLO performance measure

    The CLO market is seeing such growth that there are calls for a more complete performance measure to be introduced. Total alpha is being touted as one way to differentiate between CLO managers.  

    Now standing at over US$1trn in issuance, the CLO asset class is becoming more mainstream. “The market has grown so much – even the pension .......

    News 25 October 2021

  • Highland Capital lawsuit filed

    Sector developments and company hires

    Highland Capital lawsuit filed
    The latest lawsuit brought by Highland Capital Management (HCMLP) against former employees has been filed in the bankruptcy court of the northern district of Texas. The action seeks to “recover hundreds of millions of dollars in damages that HCMLP suffered at the hands of its founder, James Dondero, acting in concert with other entities that he owned .......

    Market Moves 25 October 2021

  • Gallatin CLO platform acquired

    Sector developments and company hires

    Gallatin CLO platform acquired
    Aquarian Holdings has launched Aquarian Credit Partners (ACP), a syndicated high-yield credit investment management platform. Aquarian has partnered with Justin Driscoll, Bo Williams and the rest of the Gallatin Loan Management team to form ACP, which has assumed management of Gallatin’s existing CLOs, with more than US$800m of assets under management.

    Gallatin has a track .......

    Market Moves 22 October 2021

  • Big bang?

    Tokenisation touted as a replacement for securitisation

    Tokenisation is being touted as a potential replacement for securitisation, given its many applications and benefits. However, a number of challenges remain before the technology can be fully adopted by the market.

    “Tokenisation could replace securitisation – but it won’t be a big bang. However, when you see the speed of digitisation in some areas, you see it has the .......

    News Analysis 14 October 2021

  • Transitional financing

    Adam Zausmer, chief credit officer at Ready Capital, answers SCI's questions

    Q: Why do you feel the US CRE CLO sector is booming?
    A: The bridge lending market is certainly red hot at the moment. We tend to focus on less volatile assets, like multifamily, and clear trends we see across the US are tired properties in need of capital expenditure as well as a shortage of quality affordable housing. Non-bank .......

    The Structured Credit Interview 14 October 2021

  • Transition trauma

    A bumpy road ahead for shift to post-Libor world

    The structured finance market still has a great deal to do before the beginning of next year when contracts can no longer be quoted in Libor, agrees Amy Williams, partner and structured finance expert at Hunton Andrews Kurth.

    Very few securitizations or the assets which comprise the reference portfolios have moved over to quote contracts in term SOFR.  CLOs, RMBS and warehouse .......

    News Analysis 13 October 2021

  • US insurer CLO exposure 'relatively small'

    Sector developments and company hires

    US insurer CLO exposure ‘relatively small’
    The NAIC has released stress testing results on US insurers' exposure to CLOs, as of year-end 2020. The stress tests examined the resilience of CLOs under three different scenarios and mirrors findings from the year-end 2019 stress test, wherein normal CLO single-A rated tranches experienced losses under the worst-case scenario. In comparison, .......

    Market Moves 8 October 2021

  • Chopra on the march

    CFPB to expand its role and come down harder on securitisation

    The securtisation market will see a more aggressive CFPB under the leadership of recently appointed director Rohit Chopra, with “more frequent enforcements and bigger fines,” according to Rachel Rodman, a partner with Cadwalader, Wickersham and Taft.

    Rodman was speaking yesterday (5 October) at the annual SFA conference in Las Vegas on a panel addressing the future of housing .......

    News 6 October 2021

  • CIFC, TRS launch leveraged loan partnership

    Sector developments and company hires

    CIFC, TRS launch leveraged loan partnership
    Teacher Retirement System of Texas (TRS) and CIFC Asset Management have established a new leveraged loan investment fund platform known as Texas Debt Capital (TDC). A CIFC affiliate is the general partner and investment manager of TDC, while TRS is the anchor investor limited partner and has committed significant equity to the fund. The .......

    Market Moves 4 October 2021

  • Dual-currency debut

    Rare European CRE CLO prepped

    Starz Realty Capital has mandated leads for a rare European dual-currency static CRE CLO named Starz Mortgage Securities 2021-1 (see SCI’s Euro ABS/MBS Deal Tracker). The transaction has no reinvestment ability but allows the issuer to modify performing loans, as well as sell credit risk and defaulted assets, and it also features note protection tests.

    The transaction .......

    News 1 October 2021
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