CLOs

  • Consent challenges

    Transactions losing value without Libor fallback language

    Investors are working with an asset registry and communication platform to obtain noteholder consent in order to insert Libor fallback language in certain securitisations, ahead of the 2021 deadline. This is driven by concerns that transactions without fallback language are losing value compared to newer deals with the necessary language to transition to a new reference rate.

    DealVector has been .......

    News 16 August 2019

  • NPL disposals inked

    Sector developments and company hires

    ABSF tender

    The Australian Office of Financial Management is inviting tender submissions for the provision of investment management services for the Australian Business Securitisation Fund (ABSF) by 6 September (SCI 24 June). The AOFM is seeking to appoint an investment manager to assist with the evaluation of investment proposals and provide ongoing portfolio management services. The investment .......

    Market Moves 14 August 2019

  • Balancing act

    European CMBS learning from US CRE structures

    European CMBS are increasingly likely to continue following patterns set by their US counterparts and the market could even soon see it first CRE CLOs. However, in taking their lead from across the Atlantic, European issuers will need to find the right balance.

    A report from Cadwalader, Wickersham & Taft (CWT) explains that while both jurisdictions are seeing .......

    News Analysis 14 August 2019

  • Insurer markets CFO

    Transaction backed by 'highly diverse' PE portfolio

    Nassau Alternative Investments is marketing a collateralised fund obligation (CFO) comprising private equity (PE) fund commitments acquired by Nassau Life Insurance Company (NNY). The, largely static, transaction is dubbed Nassau 2019 CFO, and is backed by interests in a diversified pool totalling around US$375.7m in NAV of funded commitments and US$79.3m in unfunded capital commitments.

    Fitch comments that .......

    News 13 August 2019

  • STS mirage

    "Still no level playing field" despite regulation

    Despite the high bar that issuers must clear to achieve the STS designation on securitisations, the deals continue to have unfair levels of capital treatment compared with other investment products, even backed by the same underlying collateral.  A lack of incentive to invest in securitisation - even STS deals – therefore continues to remain, but the task of addressing this .......

    News Analysis 12 August 2019

  • AM acquisition

    Sector developments and company hires

    Asset management acquisition

    Assured Guaranty US Holdings is set to acquire all of the outstanding equity interests in BlueMountain Capital Management and its associated entities for approximately US$160m, subject to certain adjustments, as part of a strategic objective to diversify into fee-based revenue sources. The acquisition is expected to complete in 4Q19, subject to customary closing conditions. As .......

    Market Moves 9 August 2019

  • Track record

    Middle market origination processes scrutinised

    A deteriorating credit environment is expected to prove challenging for new US middle market loan platforms, whose fee revenue may not be enough to support them through stressful periods. Against this backdrop, a manager’s track record, alignment of interest and competitive advantages should be among investors’ primary considerations.

    David Heilbrunn, senior md and head of product development, capital .......

    News Analysis 9 August 2019

  • New ventures

    Asset manager building out structured credit strategies

    BlueBay is expanding its structured finance and CLO investment strategies. As well as aiming to launch a US focused structured credit strategy this year, the firm is looking at the possibility of issuing a debut CLO in 2020.

    In line with this expansion, BlueBay hired Sid Chhabra last year as partner and global head of structured credit and CLOs and, more recently, .......

    News Analysis 9 August 2019

  • Alt credit co-head hired

    Company hires and sector developments

    Alt credit co-head nabbed

    Ares has hired Joel Holsinger to its credit group as co-head of alternative credit, effective immediately. Holsinger will serve on the Ares management committee and work alongside Keith Ashton as co-head of alternative credit to expand the firm's global coverage of the US$4trn alternative credit sector. Ares' alternative credit strategy pursues asset-focused direct investments primarily in North America and Europe across .......

    Market Moves 7 August 2019

  • CLO partner appointed

    Sector developments and company hires

    CLO firm partner promotion

    DFG Investment Advisers has promoted Timothy Milton to partner. Since joining the firm in 2014, Milton has been responsible for the management of the Vibrant Capital CLO platform in his capacity as co-portfolio manager. In addition, Eduardo Cabral has joined DFG’s credit research team as an md, having been a portfolio manager and senior .......

    Market Moves 6 August 2019

  • Keeping it private

    Public European middle market CLOs are struggling, but private deals are booming

    The success of middle market CLOs in the US and the ever-present search for yield has led to much talk about the European market following suit. However, the European middle market is much smaller than its US counterpart and has different hurdles to overcome. Consequently, public deals such as Alhambra SME Funding 2018-1 (SCI 18 December 2018) have .......

    News Analysis 6 August 2019

  • CLO head hired

    Sector developments and company hires

    BUMF 6 injunctions granted

    Final injunctions have been granted against Greencoat Investments (GIL) (including against its directors, which include Clifden IOM No.1, Rizwan Hussain, Rajnish Kalia and Alfred Oyekoya), Greencoat Holdings (GHL), Portfolio Logistics (PLL), Patrick Anthony FitzSimons, Maria Stoica and Oyekoya in connection with Business Mortgage Finance 6 (SCI 17 July). A court order has also .......

    Market Moves 2 August 2019

  • Performance model revealed

    Innovative approach highlights smaller manager outperformance

    Smaller, less well-known CLO managers often outperform their larger competitors, a new analytical model has revealed. The innovative approach utilises a mutual-fund-like analysis and the S&P LSTA index to assess manager performance and potentially bring greater clarity to performance trends.

    Traditionally, assessing CLO manager performance has involved using certain metrics to look at the underlying pool of loans in a .......

    News Analysis 2 August 2019

  • Dual-tranche deal finalised

    Standard Chartered targets wide distribution

    Standard Chartered has completed a dual-tranche capital relief trade that references an undisclosed US$2bn portfolio of corporate loans from the UK, Dubai, India and Africa. Dubbed Gongga CLO, the transaction is the bank’s second application of the dual-tranche technique (SCI 14 November 2018) and it is set to continue utilising a wide distribution strategy.   

    The transaction is split .......

    News 2 August 2019

  • Affordable loan credit insurance risk transfer closed

    Sector developments and company hires

    Affordable CIRT closed

    Fannie Mae has executed a new credit insurance risk transfer (CIRT) transaction that, for the first time, covers a pool of primarily single-family affordable loans. These covered loans are delivered to Fannie Mae with a short-term lender repurchase obligation, provided primarily by state housing finance agencies, which serves as the initial loan credit enhancement. Dubbed CIRT LR .......

    Market Moves 31 July 2019

  • New podcast now live

    The operational steps to setting up a CRT and more...

    In this week's podcast, the team discuss the operational steps taken when putting together a capital relief trade, as well as some of the concerns surrounding disclosure requirements in securitisation and capital relief trades. It then rounds off with an insight into the recent securitisation from impact investor, ResponsAbility, which helps fund small businesses in emerging markets, throughout the globe.

    News 31 July 2019

  • Winding up order issued for Clifden

    Company hires and sector developments

    Clifden wind up

    A winding-up order has been issued by the High Court of Justice of the Isle of Man, Chancery Division in respect of Clifden IOM No.1 and PricewaterhouseCoopers has been appointed official receiver of the firm. The move follows a Part 8 claim issued by Clifden, naming RMAC No. 1 series 2006-NS1, 2006-NS2, 2006-NS3, 2006-NS4 and 2007-NS1 .......

    Market Moves 29 July 2019

  • Closer look

    US CRE CLOs are booming, but caution is advised

    A landmark US CRE CLO is currently marketing and grabbing investors’ attention. Away from the deal, some aspects of the sector’s rapid growth are ripe for greater scrutiny.

    STWD 2019-FL1 is being brought by Wells Fargo, BAML and Citi and is targeting pricing before month-end. If it goes through as hoped, at US$1.1bn it will be the largest ever CRE .......

    News Analysis 29 July 2019

  • BMO SRT launched

    BMO expands mid-market exposure

    Bank of Montreal (BMO) has completed a five-year financial guarantee that references US and Canadian senior secured and unsecured corporate loans. Dubbed Manitoulin USD Algonquin 2019-1, the transaction differs from previous Manitoulin deals due to the additional numbers of mid-sized corporate borrowers in the portfolio.   

    The risk transfer trade features a replenishment period and complies with risk retention rules. .......

    News 26 July 2019

  • Mortgage firm completes residuals sale

    Company hires and sector developments

    Residual sale

    Charter Mortgages is set to sell its residual economic interest in the Precise Mortgage Funding 2019-1B RMBS to JPMorgan - which managed the sale process and purchased the RC2 certificates for onward sale - for a cash consideration of £6.2m. The transaction is expected to complete on 31July and will generate a pre-tax gain of £28.8m and a .......

    Market Moves 26 July 2019

  • Ratings efficiency

    NAIC decision to boost CLO of one volumes?

    CLO of one activity is rising, as direct lenders seek to broaden their syndication channels and insurers put money to work in ratings-efficient investments. NAIC’s recent move to no longer accept certain private fund ratings could further boost volumes.

    The ‘CLO of one’ phenomenon is driven by ratings-sensitive investors and direct lenders seeking to package direct lending funds .......

    News Analysis 26 July 2019
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