CLOs

  • Tech crazy

    Securitizations of tech assets finding favour in Covid world

    Securitizations of technology assets are proving popular with US investors in the Covid marketplace, according to a new Moody’s report based on interviews with “dozens” of structured finance issuers, arrangers and investors around the world.

    In particular, securitizations of data centres, both as a constituent asset of CMBS transactions and corporate ABS deals, have caught the eye of buyers, say .......

    News Analysis 18 September 2020

  • Missing piece

    Lack of equity investors holding back CLO growth

    The CLO primary market is fully back to post-summer business with three new deals pricing yesterday, 10 September and a bulging pipeline either side of the Atlantic. However, the lack of equity investors is holding the sector back from greater long-term growth.

    The deals that priced yesterday brought this holiday-shortened week’s total to five already and continued the .......

    News Analysis 11 September 2020

  • Multi-level Libor exposure eyed

    Sector developments and company hires

    Multi-level Libor exposure eyed
    Japanese securitisations with exposure to Libor on multiple levels will face the highest risks in the transition away from the benchmark rate when it is phased out at end-2021, Moody's notes. Around 20% of Japanese structured finance transactions the agency rates have Libor exposure and, in some cases, there is Libor exposure through notes, as well .......

    Market Moves 9 September 2020

  • Euro CLO payment mismatch grows

    Sector developments and company hires

    Euro CLO payment mismatch grows
    The payment frequency mismatch between underlying loans and European CLOs is growing as loan issuers switch to semi-annual payments to manage risks in the Covid crisis, according to Fitch. The agency reports an increase in the share of semi-annual obligations among quarterly-paying Fitch-rated CLOs to around 50% of the portfolio balance in July 2020, from .......

    Market Moves 8 September 2020

  • Reporting template RTS published

    Sector developments and company hires

    Reporting template RTS published
    Seven Commission Delegated and Implementing Regulations comprising the technical standards in connection with the details to be made available by the originator, sponsor and SSPE in a securitisation transaction subject to the Securitisation Regulation have been published in the EU Official Journal. Publication means that the reporting templates RTS will be effective on 23 September, after .......

    Market Moves 4 September 2020

  • CMBS cure rates eyed

    Sector developments and company hires

    CMBS cure rates eyed
    August US CMBS remittance data shows declining 30-plus day delinquency rates, as consent and forbearance agreements came into force and the country reopened. Within post-GFC conduit deals, 30-plus day delinquencies fell 40bp month-on-month to 8.1%, while SASB delinquencies improved 34bp to 7.4% and CRE CLOs improved 30bp to 2.4%.

    Contributing to this improvement in delinquencies .......

    Market Moves 3 September 2020

  • Negative rating actions tallied

    Sector developments and company hires

    Negative rating actions tallied
    Fitch reports that global structured finance negative rating actions - including downgrades, negative outlooks and rating watch negatives - reached an eight-year high in 1H20, reflecting weakening credit conditions due to the coronavirus pandemic-related recession. As of 30 June, 8% of the agency’s ratings had a negative outlook and 3% of ratings were assigned a RWN, compared .......

    Market Moves 2 September 2020

  • Challenging times

    European CLO overlap issues addressed

    European CLOs’ overlap disadvantage versus the US has been exacerbated by the Covid crisis, but managers appear to be responding well to the challenge. At the same time, top of the stack European paper is finding favour over US equivalents in secondary.

    European CLO managers traditionally have had fewer assets to build CLO portfolios than US managers have. .......

    News Analysis 2 September 2020

  • CECL eligibility expanded

    Sector developments and company hires

    CECL eligibility expanded
    The FDIC, OCC and the US Fed have finalised a rule that allows institutions that adopt the current expected credit losses (CECL) accounting standard in 2020 to mitigate the estimated effects of CECL on regulatory capital for two years (SCI 31 March). Under the rule, eligible institutions have the option to mitigate the estimated capital effects .......

    Market Moves 28 August 2020

  • Middle ground?

    Middle market CLO credit agreements being renegotiated

    Many of the borrowers of the loans underlying US middle market CLOs are facing severe economic distress because of the Covid crisis and recessionary fears. As a result, they are renegotiating and amending their credit agreements to avoid breaching their financial maintenance covenants, which has given lenders an opportunity to improve terms from their perspective as well.

    “Many .......

    News 26 August 2020

  • FDIC sued over Madden rule

    Sector developments and company hires

    FDIC sued over Madden rule
    The states of California, Illinois, Massachusetts, Minnesota, New Jersey, New York, North Carolina and the District of Columbia last week filed a lawsuit in the US District Court for the Northern District of California against the FDIC over its final rule clarifying that when state-chartered banks sell, assign or transfer a loan, an interest rate that .......

    Market Moves 25 August 2020

  • Skilled nursing CMBS eyed

    Sector developments and company hires

    Skilled nursing CMBS eyed
    DBRS Morningstar is reviewing its ratings on the CSMC 2019-SKLZ, Greystone CRE 2018-HC1 and CHC 2019-CHC CMBS, which are secured primarily by skilled nursing facilities. The agency warns that in the coming months, nursing homes and their parent companies may face significant legal liability as a result of the high death toll at nursing homes during .......

    Market Moves 24 August 2020

  • Seasoned QMs proposed

    Sector developments and company hires

    Seasoned QMs proposed
    The CFPB has issued a notice of proposed rulemaking (NPRM) to create a new category of seasoned qualified mortgages, with the aim of encouraging innovation and to help ensure access to a responsible, affordable mortgage credit market. To be considered a seasoned QM under the proposal, loans would have to be first-lien, fixed-rate covered transactions that have .......

    Market Moves 20 August 2020

  • New targets

    US CLO spread and issuance targets raised as previous levels already met

    US CLO triple-A and triple-B secondary spreads are now at 150bp and 450bp, while net primary supply passed US$27bn this week. As a result, post-Covid crisis targets for the entirety of 2020 set by JPMorgan CLO research analysts have already been met or exceeded and have consequently been revised upwards.

    “It seemed almost inconceivable spreads would tighten so .......

    News 20 August 2020

  • Special servicing assets transferred

    Sector developments and company hires

    Special servicing assets transferred
    The assignment of substantially all of the assets of C-III Asset Management to Greystone Servicing Company, pursuant to the applicable PSA associated with each of the C-III specially-serviced CMBS, is complete. The assignment includes 64 transactions rated by Moody's and 28 Moody's-rated US conduit CMBS that hold C-III specially-serviced companion loans, but excludes the non-C-III specially-serviced .......

    Market Moves 18 August 2020

  • Repeat patterns

    CLO equity activity continues to be challenged

    The US CLO primary and secondary markets broadly appear to have bounced back from the early stages of the Covid crisis with spreads tightening and revived investor participation. However, long-standing trends at the bottom of the stack continue to challenge equity activity.

    Up until the summer lull took full effect last week, 2020 has seen extremely high levels .......

    News Analysis 12 August 2020

  • Piraeus taps HAPS

    Sector developments and company hires

    Piraeus taps HAPS
    Piraeus Bank has filed an application for inclusion of its Phoenix non-performing loan securitisation under the Hercules Asset Protection Scheme (HAPS). The total gross book value of the portfolio is €1.9bn, the majority of which relates to mortgage loans, and the application is in connection with a Greek state guarantee on senior notes with a total gross .......

    Market Moves 11 August 2020

  • CMBS repeat loan volume declines

    Sector developments and company hires

    CMBS repeat loan volume declines
    The percentage of US CMBS repeat loans dropped to 17.7% in 2019 and to 13.9% in 1H20, down by 21.4% year-over-year, according to DBRS Morningstar figures. Nevertheless, the volume of CMBS loans refinanced into CRE CLOs has remained strong, with over two billion loans exiting through such vehicles.

    Based on an analysis of CMBS .......

    Market Moves 10 August 2020

  • Problem solving

    Paul Wilden, global head of capital markets at Apex Group, answers SCI's questions

    Q: How is Apex Group involved in the securitisation market?
    A: We provide a combination of SPV administration, trustee and agency services to a broad cross-section of asset classes. Our capital markets business is broadly sector agnostic.

    Q: What are the firm’s key areas of focus today?
    A: Given the proliferation of private debt funds, one area where we add .......

    Provider Profile 10 August 2020

  • Alternative CLO ETF announced

    Sector developments and company hires

    Alternative CLO ETF announced
    Alternative Access Funds (AAF) has announced the registration of its new AAF First Priority CLO Bond ETF, which is scheduled to become effective on 14 August and - if all approvals and launch objectives are met - begin trading in early September under the ticker ‘AAA’. The new ETF will focus its investments in US dollar-denominated .......

    Market Moves 7 August 2020

  • Middle market JV agreed

    Sector developments and company hires

    Middle market JV agreed
    PennantPark Investment Corporation (PNNT) has formed a joint venture with the private credit investment business of Pantheon to create PennantPark Senior Loan Fund I (PSLF). The strategic transaction seeks to enable PennantPark to leverage its middle-market lending capabilities and capitalise on compelling senior loan opportunities amid historic market volatility. Pantheon has invested US$35m in capital to .......

    Market Moves 5 August 2020
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