CMBS
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Climate risk analytics firms acquired
Sector developments and company hires
Climate risk analytics firms acquired
Intercontinental Exchange has acquired risQ and Level 11 Analytics, which deploy data-driven technologies for managing climate change risk. RisQ and Level 11 Analytics leverage a variety of advanced geospatial mapping systems and provide extensive expertise in analysing and joining vast amounts of disparate public, corporate and third-party data sources.This data is integrated and .......
Market Moves 9 December 2021
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Starz gazing
Euro CRE CLOs tipped for take-off
Starz Realty Capital’s Starz Mortgage Securities 2021-1 transaction was notable for being a first-of-its-kind European dual-currency CRE CLO (SCI 1 October). A handful of further such deals are expected next year, given the need for a funding tool for funds active in the CRE lending space.
“I expect a handful of transactions next year – at least .......
News Analysis 9 December 2021
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Growth constraints
Disconnect between Euro ABS ambitions and reality?
European securitisation issuance for the first 11 months of the year stood at a decade high of over €112bn, up by more than 65% compared with the same period in 2020, according to S&P figures. However, despite such record growth, a disconnect appears to remain between the industry’s ambitions and what is being seen on the ground - which .......
News Analysis 9 December 2021
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Flowers among weeds
CMBS yields value to canny buyers despite distress
In the first of a series of interviews with SCI, investment managers discuss where they have seen most value recently and where they expect to see it in 2022.
Despite - or because of - the continued uncertainties that beset many areas of the CMBS market, this is the sector of the structured finance marker that currently offers the best returns to .......
Talking Point 8 December 2021
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Extendable CRE loans scrutinised
Sector developments and company hires
Extendable CRE loans scrutinised
Market Moves 8 December 2021
Fitch has published an unsolicited comment on highly extendable commercial mortgage loans that offer borrowers up to 20 years of successive annual extension options, as featured in the recent Sage AR Funding 2021 and HAUS (ELOC 39) CMBS. The agency notes that it does not treat this loan feature as credit enhancing because interest rate risk .......
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Positive prospects?
CRE tops Stage Two allocations
Commercial real estate loans were allocated the largest share of Stage Two classifications, according to the latest EBA data. This coincides with an overall growth in Stage Two allocations following the coronavirus crisis, as well as a boost in significant risk transfer transactions backed by Stage Two exposures and commercial real estate.
According to the EBA’s latest risk .......
News 8 December 2021
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ESG data coverage scrutinised
Sector developments and company hires
The European Leveraged Finance Association (ELFA) has analysed coverage by three ESG data vendors for three debt indices - the CS Western European Leveraged Loan Index, the ICE BofAML Developed Markets High Yield Constrained Index and the BBG Global Aggregate Corporate Index – and found what it describes as “major discrepancies” in data coverage across asset classes. The research shows .......
Market Moves 7 December 2021
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Covid-19: Lessons for the CMBS market
Iona Misheva, partner at Allen & Overy, explores the lessons that the pandemic provided for the European CMBS market
Issuance has been at consistently high levels this year. This has shown that the asset class recovered quickly from the temporary forces of the pandemic, which resulted in very few deals coming to market in 2020. In contrast, 2021 has seen near record levels of .......
Talking Point 6 December 2021
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Winding down
European ABS/MBS market update
The European ABS/MBS primary market appears to have begun winding down for year-end this week. With softening prices, macroeconomic concerns and the upcoming festive season, it seems that participants are already looking ahead to 2022.
“For me the year is already over,” says one ABS/MBS trader. “Most issuers have already come to market and the ABS market is .......
News 3 December 2021
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ESG countdown
ECB climate stress tests pending
The ECB’s pending climate stress tests are expected to offer some answers around the data and modelling challenges pertaining to the analysis of climate risks. Indeed, the stress tests could also prove definitive for ESG significant risk transfer issuance, given the presence of the same data challenges.
The two main challenges pertaining to the analysis of climate risks are data .......
News Analysis 3 December 2021
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Bosphorus CLOs transferred
Sector developments and company hires
Bosphorus CLOs transferred
Cross Ocean Adviser, an affiliate of Cross Ocean Partners Management, has assumed collateral management of the Bosphorus CLO IV, Bosphorus CLO V and Bosphorus CLO VI transactions from Commerzbank. Moody's has confirmed that the move will not impact its current ratings assigned to the affected notes. Under the terms of the associated novation, termination and amendment and .......
Market Moves 2 December 2021
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RFC issued on ABS tax policies
Sector developments and company hires
RFC issued on ABS tax policies
Market Moves 1 December 2021
HMRC is seeking feedback on two draft statutory instruments: the Taxation of Securitisation Companies (Amendment) Regulations 2022 and the Securitisation Companies and Qualifying Transformer Vehicles (Exemption from Stamp Duties) Regulations 2022. The UK government consulted on making changes to clarify or reform certain aspects of the taxation of securitisation companies and the stamp duty .......
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BWIC workgroup formed
Sector developments and company hires
Mortgage Industry Standards Maintenance Organization (MISMO) has formed a BWIC data development workgroup, with the aim of standardising the BWIC format to facilitate accuracy, liquidity and rapid pricing for MBS transactions. The initiative focuses on creating a standard format for MBS sellers to present BWIC data to security dealer desks. The workgroup intends to address the growing number of MBS .......
Market Moves 30 November 2021
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Meeting opportunity
New trading platform to capitalise on multifamily growth
Sabal’s new US CMBS trading business - SCH Trading (SCI 9 November) - aims to capitalise on a shift in the market relative to incumbent market-makers. The move comes amid rising investor appetite for multifamily product and an increased focus by the Biden administration on affordable housing.
“We saw a lot of opportunities around how we could .......
News Analysis 30 November 2021
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Slowly widening
European ABS/MBS market update
With investors already looking ahead to 2022, the European ABS/MBS primary market is slowly thinning out. However, transactions were still well received this week, though macro concerns have started to make an impact.
“The market has generally been pretty steady,” notes one European ABS/MBS trader. “Naturally it is a little wider at the moment as we are quickly .......
News 26 November 2021
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SCI forum: What are the benefits of forward flow structures for the securitisation market?
Our panel of market practitioners respond to readers' questions
Conor Houlihan, partner at DLA Piper, Ireland
Current dynamics in the banking sector are such that the opportunity for growth in non-bank lending in Europe is significant. In certain segments of the market, fintech lending platforms can be more agile and better-placed to deliver what the market wants.
Platforms with strong origination and underwriting capability can be an attractive partner through .......
Talking Point 26 November 2021
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Syon upgraded on stable performance
Sector developments and company hires
KBRA has completed a surveillance review of Lloyds’ synthetic RMBS Syon Securities 2020-2. The agency subsequently upgraded the class A and B notes by a notch to single-A minus and double-B plus respectively, in light of the fully ramped-up portfolio’s characteristics and the generally stable collateral performance. Syon 2020-2 is the third SRT transaction issued by Bank of Scotland referencing .......
Market Moves 25 November 2021
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Upgrades anticipated after CMBS updates
Sector developments and company hires
Moody’s has updated three commercial real estate sector methodologies, following requests for comments on the proposals in July. The rating agency has placed a number of US CMBS tranches on review for upgrade as a result.
One of the updates is in connection with Moody's methodology for rating US and Canadian conduit/fusion CMBS, which replaces the version from September 2020. .......
Market Moves 22 November 2021
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School's out?
Future of PBSA CMBS sector scrutinised
Conflicting factors such as depressed occupancy levels and excellent collateral properties, or a high dependence of international students and propitious domestic demographics, suggest that purpose-built student accommodation (PBSA) CMBS is a complex asset class. Whether the sector will ever recover from its Covid-induced collapse is a moot question.
A recent TwentyFour Asset Management blog questioned whether there is .......
News Analysis 18 November 2021
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GSE scorecard released
Sector developments and company hires
GSE scorecard released
The FHFA has released the 2022 Scorecard for Fannie Mae, Freddie Mac and Common Securitization Solutions (CSS). The purpose of the 2022 Scorecard is to hold the GSEs and CSS accountable for fulfilling their core mission requirements by promoting sustainable and equitable access to affordable housing and operating in a safe and sound manner.
The 2022 Scorecard focuses .......
Market Moves 18 November 2021