CLOs
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Activity upsurge
European ABS market update
The European primary and secondary ABS markets are seeing a surge in activity, due to uncertainty over the next quarter.
“After the high volatility last month, I was expecting a slow-down,” says one trader, surprised by the activity.
He suggests that market ambiguity around the next quarter is driving it. “The consensus is that things will only get choppy from .......
Market Reports 4 December 2018
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BDC merger announced
Sector developments and company hires
BDC merger
Golub Capital BDC (GBDC) has merged with Golub Capital Investment Corporation (GCIC), with GBDC as the surviving company, subject to certain stockholder approvals and customary closing conditions. The combined company will remain externally managed by GC Advisors and all current GBDC officers and directors will remain in their current roles. The transaction is expected to close .......
Market Moves 4 December 2018
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Sustainable growth?
Prospects for green CLOs examined
Green CLOs are expected to play an increasing role in the private sector’s involvement in the sustainable finance market. As such, S&P has created a hypothetical rating scenario to compare the credit quality of green CLOs with a typical European CLO 2.0 deal.
“There is a need for more funding in this space,” says Jekaterina Muhametova, associate at S&P. “Green .......
News 4 December 2018
Proportional approach
ESAs tackle delay in transparency requirements
The joint European Supervisory Authorities (ESAs) - which consist of the EBA, ESMA and the European Insurance and Occupational Pensions Authority - have published a letter reiterating market concerns over ESMA’s disclosure requirements (SCI 5 October) and Article 14 (SCI 9 July) of the CRR. The authorities have also called on EU national regulators to apply a ......
News 4 December 2018Premium Content
ESAs suggest 'proportion'
Sector developments and company hires
Aussie securitisation fund
The Australian government has introduced a A$2bn Australian Business Securitisation Fund, which will provide significant additional funding to smaller banks and non-bank lenders to on-lend to small businesses on more competitive terms. The fund will be administered by the Australian Office of Financial Management (AOFM), consistent with its prior involvement in the RMBS market in .......
Market Moves 3 December 2018
Multi-jurisdiction exposure
Cashflow trade finance CLO prepped
Standard Chartered is in the market with its first global cashflow CLO backed by US$1bn of trade finance exposures (TFEs), with collateral from across multiple jurisdictions. The senior tranche of the deal – dubbed Prunelli Issuer I (compartment 2018-1) – represents 75% of the assets, with overcollateralisation accounting for the remainder.
The pool, which has a revolving period .......
News 3 December 2018
Funding boost for online lender
Sector developments and company hires
Alesco CDOs transferred
The collateral management agreements for the Alesco Preferred Funding X to XVII Trups CDOs have been assigned to Hildene Collateral Management Company (HCMC), an affiliate of Hildene Capital Management. Under the terms of the assignments, HCMC agrees to assume all the responsibilities, duties and obligations of the current collateral manager (ATP Management) under the agreements and under .......
Market Moves 29 November 2018
Term leveraging
European ABS market update
The European primary ABS market is still drifting wider, due to concentration of supply.
“Investors are using their leverage to dictate terms and push deals as wide as possible. That’s one of the reasons why the pipeline has been brought forward,” says one trader.
He adds: “If a deal is struggling, an investor can offer to push .......
Market Reports 29 November 2018
Canadian asset expansion
Sector developments and company hires
ILS
TigerRisk Partners has hired Stephen Fromm as vice chairman of TigerRisk capital markets and advisory. In his new role, Fromm will act as a senior investment banker focusing on insurance industry M&A, capital raising and strategic advice. Fromm was previously md and vice chairman of financial institutions investment banking at Deutsche Bank.
MBS purchase plans
The Bank of Canada .......
Market Moves 27 November 2018
Start the week - 26 November
A review of securitisation activity over the past seven days
Market commentary
US CLO equity and double-B bonds were casualties of last week’s drop in the S&P 500 index, with bids softening across the secondary market (SCI 21 November).
“A handful of CLO equity and double-B bonds were out for the bid and did not trade,” said a trader. “There was some clear hesitation in the market compared with a week ago. .......
News 26 November 2018
Two-sided market
European secondary market update
There are a few CLO BWICs out for the bid today with another RMBS scheduled for this evening. The European market has not followed an identifiable trend since the US thanksgiving holiday and activity remains subdued.
“A number of accounts are waiting on the sidelines and only going for highly discounted paper,” says one trader. “It could be the calm before ......
Market Reports 26 November 2018Premium Content
UK SLABS slated
Sector developments and company hires
EMEA
Eurocastle Investment has appointed Hammad Khan to its board as a non-executive director, increasing its number of directors to six. Khan is a representative of Eurocastle’s largest shareholder, an affiliate of EJF Capital, where he is a senior md and a senior member of the EJF Investments Manager investment team. He joined EJF in March 2013 and is responsible .......
Market Moves 23 November 2018
Softening activity
European CLO market update
The European CLO market is relatively quiet due to the Thanksgiving holiday in the US, but the pipeline is seeing plenty of supply.
“The market is responding to the amount of supply,” says a trader. “Everything is wider; new issues are also coming in wide. I guess to a small extent the seize-up in equities has affected the market and .......
Market Reports 22 November 2018
Classification clarity
Spanish SME ABS 'first' marketing
Be-Spoke Capital is marketing an unusual, inaugural securitisation, backed by a portfolio of loans to Spanish SMEs and expected to total around €300m, with pricing targeted for early December. Dubbed Alhambra SME Funding 2018-1, Natwest Markets is sole arranger on the transaction while the European Investment Bank is looking to invest €80m in the mezzanine tranche.
Miles Hunt, head of securitised .......
News Analysis 21 November 2018
CRT tranche downgraded
Sector developments and company hires
Acquisitions
Spruce Finance has been acquired by HPS Investment Partners. Spruce will be headquartered in Houston and maintain its executive and M&A offices in San Francisco. Christian Fong has joined the company as president and ceo after holding a position as co-chairman of the board of directors since early 2017. The transaction took place through Spruce Holdings, a .......
Market Moves 21 November 2018
Hesitant appetite
US CLO market update
US CLO equity and double-B bonds were casualties of the drop in the S&P 500 index yesterday, with bids softening across the secondary market.
“A handful of CLO equity and double-B bonds were out for the bid yesterday and did not trade,” says a trader. “There was some clear hesitation in the market compared with a week ago. .......
Market Reports 21 November 2018
Bloodbath blues
European ABS market update
The European ABS market has repriced, after taking a hit yesterday when the S&P 500 index plunged by 1.8%. The tone has improved this morning, as traders cautiously return to the market.
“We’re seeing the market repricing after the bloodbath that happened yesterday,” says one trader. “A lot of paper hit the shelf and nobody wanted to trade it; mezz ......
Market Reports 21 November 2018Premium Content
Buyer fatigue
US CLO secondary market update
The US stock market is 400 points down today (20 November) and is being described as an “ugly open”, with the sell-off beginning to unnerve traders. The effects are impacting the US CLO secondary market, as the fatigue of the past year catches up with investors.
“A lot of CLO managers are trying to get deals done, but investors are .......
Market Reports 20 November 2018
Long goodbye
First non-Libor linked ABS anticipated
Lloyds became the first bank to issue a benchmark covered bond tied to the sterling overnight index average (SONIA) in September. The move has sparked predictions that the first securitisations tied to alternative reference rates will emerge next year.
Libor is set to be phased out from 2021 and it remains unclear what will replace it as a .......
News Analysis 20 November 2018
Credit clutch
European ABS market update
The European ABS slow-down continues, with prices drifting wider and subdued credit growth across the board. In particular, an aversion to duration risk has emerged this week.
“Credit is headed for the worst year since 2008,” one trader explains. “ABS traders are not used to showing negative figures to their clients. People are reassessing the market.”
In .......
Market Reports 20 November 2018
CMBS desk launched
Sector developments and company hires in structured finance
Europe
Simmons & Simmons has hired James Grand to lead its CLO offering. Grand was previously a structured products partner at Freshfields where he spent over 20 years, specialising in advising both the sell-side and the buy-side on CLOs, as well as contentious and non-contentious derivatives work, structured credit, tax structured products, regulatory capital and prime brokerage.
Partnerships
Alexandria Capital .......
Market Moves 15 November 2018