CLOs
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Generali debuts green cat bond
Sector developments and company hires
Generali debuts green cat bond
Assicurazioni Generali has priced an innovative catastrophe bond. Dubbed Lion III Re, the €200m ILS has a number of sustainable finance features.First, Generali freed up €28.1m in capital as a result of the protection provided by Lion III Re, which will be allocated to eligible projects as defined by Generali’s Green ILS Framework. .......
Market Moves 21 June 2021
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Adopting change
Class A loan note attracts attention
Together Money earlier this month priced its second public small balance CMBS, the £249m Together Asset Backed Securitisation 2021-CRE2. The transaction is notable for including a class A loan note in the capital structure – a feature previously only seen in the CLO market.
“[The deal] is very similar to a traditional securitisation; it is structured with notes .......
News Analysis 21 June 2021
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SRT upgraded on CE build-up
Sector developments and company hires
SRT upgraded on CE build-up
Market Moves 18 June 2021
Scope Ratings has affirmed its single-A rating on the class C credit-linked notes issued by SSPAIN 2019-A and upgraded the class D to F notes to triple-B plus, triple-B minus and double-B plus respectively from triple-B minus, double-B and double-B minus. The transaction is a significant risk transfer deal, which closed on 28 June 2019 .......
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Auto turnover dampens DFP issuance
Sector developments and company hires
Auto turnover dampens DFP issuance
Market Moves 14 June 2021
Accelerated dealer auto inventory turnover has resulted in insufficient collateral available for US dealer floorplan (DFP) ABS master trusts in 2021, Fitch reports. The agency notes that this is indirectly accounted for by deal structures, for the most part, through the use of excess funding accounts (EFAs). EFAs are meant to protect trusts against inventory .......
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Smoother transition?
US CLO secondary looks to be taking this quarter-end in its stride
Current market technicals typically indicate a spike in volatility at the bottom of the US CLO debt stack, as trading hots up into quarter-end. However, Q2 looks set to be a smoother ride than Q1 and secondary market focus has shifted towards equity.
“We’re coming to quarter end and there is a large volume of primary deals in .......
News Analysis 14 June 2021
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Euro CLOs could still soften
Sector developments and company hires
Euro CLOs could still soften
European CLO new issue triple-A spreads are now out to 87bp-88bp from their post-Covid tights of 79bp-80bp. While there appears to be considerable support at current levels, technicals could yet push them to the low-90s, according to Bank of America European CLO research analysts.Offsetting factors currently at play include broader credit market direction, rates moves .......
Market Moves 7 June 2021
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Focal point
Arb rather than NAV in focus
European CLO equity performance has held strong despite the unprecedented Covid shock and significant shifts in loan market pricing in the last 12 months, supporting the view that a diversified portfolio of CLO equity can deliver strong and consistent returns through the credit cycle and attract new investors. To build on that, CLO managers now need to shift their focus, .......
News 25 May 2021
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CLO conflicts of interest eyed
Sector developments and company hires
CLO conflicts of interest eyed
Market Moves 24 May 2021
IOSCO has issued four questionnaires for industry participants on conduct risks in leveraged loans (LLs) and CLOs targeting bank lenders, CLO investors, CLO managers and LL sponsors. Through its Committee 3 on Regulation of Market Intermediaries and its Committee 5 on Investment Management, IOSCO is conducting work to understand the potential conflicts of interest and .......
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Strategic credit commitment inked
Sector developments and company hires
Strategic credit commitment inked
Market Moves 20 May 2021
The Investment Management Corporation of Ontario (IMCO) has closed a US$500m commitment with a new strategic partner, Ares Management Corporation. IMCO has allocated US$400m of the commitment to a fund of one structure and US$100m to Ares Pathfinder Fund, a flagship global alternative credit fund. Pathfinder pursues a differentiated strategy of providing tailored financial solutions for .......
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Revving up
Strong demand continues for CRE CLOs
Sentiment in the US CRE CLO market remains relatively positive (SCI 10 May), with the multifamily sector in particular seeing robust demand. The outlook for the office sector is mixed, however.
“The CRE CLO market is hitting all cylinders. There is strong investor demand for new issuance and issuers have a strong origination pipeline,” says John Amman, .......
News Analysis 20 May 2021
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Data centre leverage 'inconsistent' with ratings
Sector developments and company hires
Data centre leverage ‘inconsistent’ with ratings
Market Moves 19 May 2021
A number of wholesale data centre securitisations issued in recent years carry elevated leverage that is inconsistent with the single-A rating category, Fitch suggests. The rating agency states that these transactions have weaker credit characteristics and substantially higher leverage multiples than other comparable digital real estate securitisations, such as wireless tower transactions, and higher .......
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Blue investable markets study underway
Sector developments and company hires
Blue investable markets study underway
The European Commission and the EIB Group have increased their cooperation to implement a new EU Sustainable Blue Economy policy. Under the agreement, both institutions will work jointly with EU Member States to meet financing needs to reduce pollution in European seas and support investment for blue innovation and blue bioeconomy.As such, the .......
Market Moves 18 May 2021
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Biden bonanza
Vast infrastructure package to energise project finance CLOs
The project finance CLO market, somnolent for a decade, will receive a shot in the arm from the Biden administration’s ambitious infrastructure spending programme, say market-watchers.
Around $600bn of the planned $2trn package is earmarked for improvement of transport networks, and another $200bn or more will go on housing. The details of how and in what form this money will be distributed .......
News 14 May 2021
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Virtuous circle?
Bullish sentiment underpins securitisation opportunity
A strong rebound in global growth appears to be underpinning the opportunity in securitised credit, notwithstanding the ongoing impact of the coronavirus pandemic. As economic activity picks up and more collateral is available to be securitised, further supply should hit the market and generate increased interest from investors.
Sentiment in the securitisation market remains bullish, according to Mark .......
News 14 May 2021
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Asset managers partner on pensions initiative
Sector developments and company hires
Asset managers partner on pensions initiative
DWS has launched the DWS Secured Income Fund, aimed at small to medium-sized defined benefit pension plans seeking stable, long-term returns. The fund provides a diversified portfolio of secured income assets, including ABS and CLO bonds.Over half of UK defined benefit pension plans are in deficit, with insufficient assets to meet their .......
Market Moves 13 May 2021
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Demand drivers
Fundamentals and technicals support US CLOs for now
On the back of the exceptionally heavy supply in Q1, US CLO spreads softened, but had reversed back to one-year tights at the end of last week. The move was driven by continuing voracious investor demand, unlikely to be diminished even by expected record primary issuance, unless macro events intervene.
“Most people still see CLOs as pretty good .......
News Analysis 13 May 2021
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Iberian RMBS investment disclosed
Sector developments and company hires
Iberian RMBS investment disclosed
Market Moves 12 May 2021
The EIB has disclosed that it invested €50m in UCI’s latest RMBS, Prado VIII, aimed at promoting the renovation of existing residential buildings in Spain and Portugal, as well as the purchase of new near zero energy housing. The project is expected to contribute to climate change mitigation, delivering energy savings of almost 57GWh a year .......
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STS BTL RMBS prepped
Sector developments and company hires
STS BTL RMBS prepped
Domivest is in the market with the first-ever STS buy-to-let RMBS. Dubbed Domi 2021-1, the €352.2m transaction is backed by a €370.7m provisional pool of Dutch BTL mortgage loans, including €30.61m in prefunding.Interest-only loans comprise 93.5% of the pool, according to Moody’s. Loans with initial LTVs above 70% amortise linearly to either the 70% .......
Market Moves 11 May 2021
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Hertz reorganisation proposals weighed
Sector developments and company hires
Hertz reorganisation proposals weighed
Market Moves 10 May 2021
Hertz has determined that a revised proposal to provide equity capital to fund its exit from Chapter 11 - made by affiliates of Knighthead Capital Management, Certares Opportunities and Apollo Capital Management - constitutes a superior proposal than the one contemplated by its agreement with its existing plan sponsors, affiliates of Centerbridge Capital Partners, Warburg Pincus .......
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CRE CLO surge
Record issuance expected
The US CRE CLO market is seeing a surge in new issuance, albeit from the sector’s relatively low levels. The 18 deals priced so far this year have already surpassed last year’s total of 11 and are well on the way to reaching 2019’s all-time record of 29, with total volume expected to surpass the US$15bn achieved then.
Bank of .......
News Analysis 10 May 2021
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Greek investment partnership inked
Sector developments and company hires
Greek investment partnership inked
Market Moves 29 April 2021
Mount Street Group has formed a strategic partnership in Greece and Cyprus with Technical Olympic, a Greek real estate, construction and investment group. As part of the partnership and through its subsidiary PFC Premier Finance Corporation (Cyprus), Technical Olympic has entered into a Memorandum of Understanding to acquire a stake in Mount Street’s businesses in Greece .......