CLOs
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Highland trio launch new firm
Sector developments and company hires
Highland trio launch new firm
Market Moves 20 November 2020
Ex-Highland Capital Management executives Mark Okada, Jack Yang and Trey Parker have launched Sycamore Tree Capital Partners, an asset management firm specialising in private and alternative credit. Okada will serve as ceo, Yang will serve as president and head of business development, and Parker will serve as cio. John Muse and Ken Hersh are strategic .......
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Automated alternative
CLO tax solution getting traction
An automated alternative to the traditional season-and-sell process that enables tax efficiency for CLOs is starting to gain traction. Smaller firms are expected to be the earliest adopters, though the programme’s efficiencies could benefit all collateral managers.
Season and sell is utilised by US CLOs that are typically Cayman corporations designed not to be engaged in a US trade or .......
News Analysis 19 November 2020
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Garrison CLO platform acquired
Sector developments and company hires
Garrison CLO platform acquired
Market Moves 13 November 2020
Mount Logan Capital subsidiary Mount Logan Management (ML Management) has acquired from Garrison Investment Management (GIM) and other sellers the rights under certain interests and agreements relating to Garrison Funding 2018-1 and Garrison MML CLO 2019-1, as well as the rights under certain side letter agreements, for a purchase price of US$3m. As of 30 June .......
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Transition revamp?
Legacy language amendments remain challenging
Standard Libor fallback language has been agreed and adopted by some new transactions ahead of the benchmark transition next year (SCI passim). However, language amendments for legacy transactions remains challenging.
“Government agencies have been pretty clear on the fact that Libor will not be extended. For several years now, new transactions have been printed with satisfactory fallback language. .......
News Analysis 13 November 2020
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Shortfalls hitting rated CMBS notes
Sector developments and company hires
Shortfalls hitting rated CMBS notes
KBRA reports that over 85% (225) of the 263 deals in its rated US conduit CMBS universe have been impacted by interest shortfalls to varying degrees. Prior to the coronavirus pandemic, shortfalls occurred in just over 40% (110) of the transactions, as of February 2020.“The increase is not surprising, as interest shortfalls are .......
Market Moves 12 November 2020
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CLO resurgence?
Primary spike contingent on sustained positivity
The US CLO market’s presidential election lull continued into this week ahead of yesterday’s holiday, despite the rally in equity and broader credit, with no new deals priced since 2 November. However, issuance could now take-off if a variety of factors align and positive sentiment can be sustained.
“The ferocity of the broad market rally has taken everyone .......
News 12 November 2020
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Dutch BTL aggregator deal prepped
Sector developments and company hires
Dutch BTL aggregator deal prepped
Citi is in the market with a new Dutch buy-to-let RMBS. Dubbed Jubilee Place 2020-1, the transaction is backed by a €212.9m portfolio comprising 669 loans originated by Dutch Mortgage Services, DNL 1 and Community Hypotheken.These three platforms focus on the non-consumer segment of the BTL market – in other words, professional landlords – according .......
Market Moves 11 November 2020
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ESG-focused CLO manager formed
Sector developments and company hires
ESG-focused CLO manager formed
Market Moves 10 November 2020
A trio of ex-Ares Management partners have formed a new independent alternative credit investment firm that plans to adopt an active ESG screening approach. Founded by Americo Cascella, Daniel Hall and Shane Mengel, Pacific & Plains Capital is based in Dallas, Texas, with a presence also in Los Angeles, California. The firm will invest in loans .......
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Hertz in line with settlement plan
Sector developments and company hires
Hertz in line with settlement plan
Market Moves 6 November 2020
Fitch reports that Hertz had disposed of nearly 170,000 non-program vehicles (NPVs) over the past five months, which is in line with its bankruptcy settlement plan. These dispositions amounted to approximately US$3.3bn of proceeds, with a combined net book value (NBV) of US$2.8bn. Per the Hertz Vehicle Financing II liquidation event, these sales proceeds .......
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CLO library launched
Sector developments and company hires
CLO library launched
Semeris has today launched a document library called Semeris Docs for CLOs. The service initially covers European CLO documents and summaries on over 75 transactions, which will continue to grow and see a US CLO library launched in 1Q21.Semeris Docs is built on NLP (natural language processing) and the latest AI techniques, combined with human .......
Market Moves 4 November 2020
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Strategic partnership expanded
Sector developments and company hires
Strategic partnership expanded
Pretium has entered into an expanded strategic partnership with American Equity Investment Life Insurance Company (AEL), building upon AEL's prior investment commitments with the firm and increasing total commitments to US$1bn, with pre-agreed terms for expansion to US$2.25bn. The investments will initially be primarily deployed into attractive residential credit assets sourced and managed by Pretium.In .......
Market Moves 3 November 2020
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ESG philosophy
Andrew Lennox, senior portfolio manager at the international...
Q: How and when did the international business of Federated Hermes become involved in the securitisation market?
A: The Federated Hermes European structured credit team consists of senior portfolio manager Stephane Michel, me and two analysts covering the universe of ABS and CLOs. I arrived at the firm 2.5 years ago.One of the attractions of moving to work .......
The Structured Credit Interview 2 November 2020
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UKML shareholder consultation continues
Sector developments and company hires
UKML shareholder consultation continues
Market Moves 30 October 2020
The board of UK Mortgages (UKML) has completed the strategic review that it commenced following the withdrawal of proposals by M&G Investment Management (MAGIM) (SCI 14 August). The review has identified two potential options that will provide a clear path to the company’s objectives of enhanced liquidity, as well as a narrowing and removal of .......
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Election focus
US CLOs hold up for now
Next week’s US presidential election is holding the attention of the credit market, along with the rest of the world. However, the US CLO sector appears to be dealing with short-term concerns reasonably well, though longer-term issues continue to lurk in the background.
“We’ve seen lower secondary trading volumes this week and last week, and at the same time spreads .......
News Analysis 29 October 2020
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Pan-European logistics CMBS prepped
Sector developments and company hires
Pan-European logistics CMBS prepped
Blackstone Real Estate Partners is in the market with a €318.6m single-loan pan-European CMBS. Dubbed Pearl Finance 2020, the transaction is secured by 61 predominantly last-mile logistics assets across Denmark, Finland, France, Germany, Ireland and the Netherlands.The assets are valued by Cushman & Wakefield at €576.9m, as of 31 July 2020. Portfolio occupancy currently .......
Market Moves 28 October 2020
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Mind the gap
CLO equity price and NAV data examined
From now on SCI will be publishing regular case studies and reports on the CLO market in addition to our usual news stories on the sector. Here, we examine how CLO equity prices have fared so far over this most tumultuous of years and their relationship to their underlying NAVs.
While this first article is available to .......
News 28 October 2020
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Environmental risk score rolled out
Sector developments and company hires
CMBS environmental risk score rolled out
Market Moves 23 October 2020
Trepp has implemented a new data integration with Risk Management Solutions (RMS) that aims to help evaluate and manage global risk from natural and man-made catastrophes. The solution provides an environmental risk score for properties backing CMBS loans, ranging from one to five, that measure the likelihood of property damage and business interruption from .......
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JAAA launched
New triple-A CLO ETF well received
The Janus Henderson AAA CLO ETF (JAAA) launched on Monday, 19 October, amid positive investor feedback. The ETF seeks to provide capital preservation and current income by investing at least 90% of its net assets in CLOs of any maturity that are rated triple-A or equivalent at the time of purchase.
“We came to market with seed capital from six .......
News Analysis 21 October 2020
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Leasing ABS inked
Sector developments and company hires
Leasing ABS inked
The EIB and the EIF have provided Alba Leasing with €490m via an SME securitisation financing operation. Alba Leasing has undertaken to double this, increasing the total amount available to €980m for projects across all economic sectors, with a particular focus on environmental investments (for which 20% of the resources have been reserved).The EIB Group has subscribed .......
Market Moves 20 October 2020
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Restructuring capacity
LMLs introduced to European CLOs
Recently issued Deer Park CLO was the first European deal to provide for loss mitigation loans (LMLs) and enable its manager to invest outside of eligibility criteria during restructuring events, according to a new report from Fitch.
“This concept, alongside the existing corporate rescue loan mechanism, bolsters the transaction's ability to play an active role in restructurings, while .......
News 20 October 2020
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CLO structures reviewed
Sector developments and company hires
CLO structures reviewed
Post-Covid crisis US BSL CLO structures differ in a range of ways from their predecessors, beyond shorter reinvestment periods, according to a new report from S&P.“We reviewed a sample of almost 40 US BSL CLOs that closed in Q2 and Q3, and compared their portfolio metrics (as of the start of Q4) to the statistics .......
Market Moves 19 October 2020