CMBS
-
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?
Provider Profile 10 August 2020
A: Given the proliferation of private debt funds, one area where we add .......
-
CMBS perturbation
Fitch report shows July US delinquency surge, especially in hotels and retail
Despite the stronger than expected non-farm payroll released today, certain sectors of the US ABS market continue to give grave cause for concern, and top of that list is the CMBS sector, as figures reported by Fitch today (August 7) underline.
The loan delinquency rate hit 4.98% at the end of July, a 1.39% increase over the month, and the .......
News 7 August 2020
-
Alternative CLO ETF announced
Sector developments and company hires
Alternative CLO ETF announced
Market Moves 7 August 2020
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 .......
-
CMBS DQ rate declined
Sector developments and company hires
CMBS DQ rate declined
Market Moves 6 August 2020
The overall US CMBS delinquency rate dropped to 8.53% last month, while 25.78% of balances previously in grace became delinquent, according to S&P’s monthly tracker. All five sectors – industrial, office, multifamily, retail and lodging – saw declines month-on-month in their overall DQ rates. There were 290 newly delinquent loans (totaling US$6.4bn) in July, including 139 .......
-
MM CLO test failures rise
Sector developments and company hires
MM CLO test failures rise
Market Moves 4 August 2020
The continued deterioration in credit quality of issuers due to the coronavirus pandemic resulted in a large number of US middle market CLOs failing a variety of tests for the first time in 2Q20, according to Fitch’s latest report on the sector. Of the 58 MM CLOs covered in the report, 23 failed at least one .......
-
Euro CLO equity edges ahead
Sector developments and company hires
Euro CLO equity edges ahead
Market Moves 3 August 2020
European CLO equity cashflow returns average 9.3% year-to-date and - as all CLOs in reinvestment are currently paying - the full-year 2020 cashflow return is likely to be low-teens, according to a new report from JPMorgan CLO research analysts. As such, European equity pieces have edged ahead of their US counterparts, currently returning 8% year-to-date .......
-
Nuanced approach
Call for clarity in defining ESG
A nuanced approach to ESG considerations is emerging within the securitisation market. Nevertheless, the Covid-19 pandemic has put social and governance factors in the spotlight.
Anuj Babber, head of ABS research at M&G Investments, says: “The securitisation industry is at the infancy of incorporating ESG considerations into its credit and investment decisions. What we are seeing is that .......
News 3 August 2020
-
The perils of Covid CRE
While CRE market has proved robust so far, help is still needed.
The US commercial real estate market, and by extension the CMBS sector, has performed better recently than was thought likely a few months ago, but this does not mean all is well.
The expiry of enhanced unemployment benefits today (July 31) plus ongoing economic dislocation due to a far from tamed pandemic suggests that things will get worse in the near term.
One .......
News Analysis 31 July 2020
-
CMBS concerns
Tailored Brands exposure eyed
Tailored Brands has revealed that coronavirus-related financial disruption means it is considering undergoing bankruptcy reorganisation, which could be pursued as soon as 2 August. KBRA reports that 217 properties collateralising 208 loans (US$14.44bn by allocated loan amount) across 226 US CMBS have exposure to a Tailored Brands location.
Around 26% of this cohort was delinquent, as of last .......
News 31 July 2020
-
AGs fight Madden rule
Sector developments and company hires
AGs fight Madden rule
Market Moves 30 July 2020
The attorneys general of California, Illinois and New York have filed a suit against the OCC’s ‘valid when made’ rule (SCI 1 June), which they claim would allow the federal government to pre-empt state usury laws and allow third-party entities “to prey on vulnerable” borrowers. The AGs note that the ability to pre-empt state usury .......
-
Blockchain boost
DLT opportunity for ABS market
Coronavirus-related concerns are boosting the use of technology within the securitisation market. Blockchain is one area that is benefiting from this trend.
John Evans, Vanguard’s head of blockchain strategy, says: “One area we feel that there is a good opportunity to modernise the plumbing of the markets is in the securitisation market, and ABS is a good example .......
News Analysis 30 July 2020
-
CLO ETF prepped
Sector developments and company hires
CLO ETF prepped
Market Moves 29 July 2020
Janus Henderson Investors has filed a preliminary registration statement with the US SEC in connection with the Janus Henderson AAA CLO ETF (JAAA), which is expected to launch on 22 October and will be offered to US investors. The fund will be managed by portfolio managers John Kerschner and Nick Childs, while Jessica Shill will serve as .......
-
CLO equity defies predictions
Sector developments and company hires
CLO equity defies predictions
Market Moves 27 July 2020
US CLO equity cashflow performance is defying pessimistic predictions, according to a new report from JPMorgan CLO research analysts. As of 23 July reporting, US CLO equity on average paid 8% cashflow year to date (based on 842 tranches or circa 70% of the universe) and the report estimates 89% of equity is paying, compared to .......
-
'Switch' success
Aussie non-bank issuance on the rise
The Australian securitisation market has seen a rise in non-bank issuance post-coronavirus. Such activity has benefited from an adjustment to the AOFM’s Structured Finance Support Fund (SFSF) that funnelled secondary sellers into new primary deals.
Martin Jacques, director, head of securitisation and covered bond strategy at Westpac Institutional Bank, says: “Since the onset of the pandemic, all of .......
News Analysis 27 July 2020
-
ReoCo restructuring in the works
Sector developments and company hires
ReoCo restructuring in the works
Market Moves 23 July 2020
The Leviticus SPV issuer is set to implement a ReoCo structure, having appointed Credito Fondiario as the servicer to carry out all core ReoCo activities. The main purpose of the ReoCo is to encourage third-party acquisitions at auctions above auction base prices or to repossess real estate assets at otherwise empty auctions and re-sell them .......
-
Canadian CMBS forbearance highlighted
Sector developments and company hires
Canadian CMBS forbearance highlighted
As of the June 2020 remittance reports for the Canadian conduit CMBS sector, 48 loans totalling C$559.9m were on the servicer's watchlist for coronavirus-related relief, according to DBRS Morningstar. In most of these instances, the servicer’s commentary confirmed that borrowers were granted loan modifications and/or forbearances.The majority of these loans are secured by retail .......
Market Moves 22 July 2020
-
Second CLN references WaMu loans
Sector developments and company hires
Second CLN references WaMu loans
Market Moves 21 July 2020
JPMorgan is in the market with its second public synthetic RMBS, Chase Mortgage Reference Notes 2020-CL1. Principal payments on the notes are based on the actual payments received and performance of a US$2bn reference pool consisting of 8,683 prime-quality residential mortgage loans. According to Fitch, the majority of the loans were originally negative amortisation loans originated .......
-
Positive pick-up
European ABS market update
The positive tone across the European securitisation market appears to be continuing this week, following one that saw rare Dutch consumer (Aurorus 2020) and Portuguese auto (Silk Finance No. 5) paper placed. Indeed, two more relatively rare mandates were announced yesterday (20 July) – a new UK prime RMBS master trust and the first post-coronavirus UK CMBS.
One .......
Market Reports 21 July 2020
-
UK Mortgages offer disclosed
Sector developments and company hires
UK Mortgages offer disclosed
Market Moves 20 July 2020
M&G Investment Management (MAGIM), on behalf of one of its managed funds - M&G Specialty Finance Fund (£) SCSp – has disclosed that it has made several approaches to the board of UK Mortgages Limited (UKML) with a view to making a recommended cash offer for UKML, all of which have been rejected. The most recent approach .......
-
Euro CLO par burn rises
Sector developments and company hires
Euro CLO par burn rises
Market Moves 16 July 2020
After a relatively stable Q1, European CLO managers burnt an average -19bp of par in Q2 (compared to -3bp in Q1), according to JPMorgan’s latest report on the sector. Among 44 European managers, 14 managers built par in 2020 YTD by an average +19bp, while the remaining 30 managers burnt par by an average -41bp. .......