CMBS
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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
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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
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Less liquidity
US CMBS secondary market update
Risk aversion continues in the US CMBS market, with flows described as “anaemic” due to the volatility seen over the past few weeks.
“I’m hearing that The Street went into this heavy on paper and they are feeling that quite a bit,” says a trader. “It seems most buyers are aware of it too – anything behind triple-B .......
Market Reports 16 November 2018
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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
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Trading countdown
US CMBS primary market update
The US CMBS market is facing a heavy primary calendar this week, which is overshadowing secondary market activity and causing risk aversion.
“We have seen healthy issuance volumes over the past few weeks,” says one trader. “As far as the markets are concerned, it does not feel as though there is an appetite for added risk.”
He .......
Market Reports 14 November 2018
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NPL transaction markets
Sector developments and company hires in structured finance
NPL deal markets
Banco Santander Totta is in the market with Hefesto STC (Guincho), a €98m securitisation backed by a €481m portfolio, by gross book value (GBV), of Portuguese non-performing residential, commercial and unsecured loans originated by Banco Santander Totta. DBRS and Scope have assigned provisional ratings, respectively, of triple-B (low)/triple-B minus to the €84m class A notes and triple-C/single-B minus to the €14m ......
Market Moves 13 November 2018Premium Content
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Unpredictable factors
Macro and micro challenges highlighted
European market participants are facing three unpredictable factors in 2019, all of which will drive ABS activity and supply in the new year. ECB monetary policy evolution, Brexit execution and securitisation legislation implementation represent challenges from both macro and micro perspectives.
Among these challenges is the Basel 4 output floor. Alexander Batchvarov, md at BofA Merrill Lynch Global .......
News Analysis 9 November 2018
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CLO investor poached
Company hires and sector developments in structured finance
Acquisitions
LibreMax Capital has entered into an agreement to acquire Trimaran Advisors and certain affiliated companies (Trimaran) from KCAP Financial. Following the close of the transaction, Trimaran’s cio and head of its CLO platform, Dominick Mazzitelli, will continue to lead the business, supported by the existing management team. Trimaran currently manages six CLOs with approximately US$3bn AUM and .......
Market Moves 9 November 2018
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CRE platform acquired
Sector developments and company hires in structured finance
Acquisitions
AXA Investment Managers has expanded its global debt platform through the acquisition of Quadrant Real Estate Advisors. This includes an acquisition of Quadrant’s investment team and management of US$9.4bn of US commercial real estate loan mandates. As part of the transaction, 24 members of Quadrant, including five of the founding members, will join AXA IM - Real Assets. .......
Market Moves 8 November 2018
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Mezzanine muddling
European CLO and CMBS markets update
European traders are focusing on secondary US CLO paper today, with 21 lines on BWICs compared with seven out for the bid in the European market (see SCI’s BWIC calendar). European CLO volumes have been low, yet triple-B bonds have performed steadily, contrary to expectations that they would perform badly this week.
“Clients have been quiet. There is no ......
Market Reports 7 November 2018Premium Content
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Global head hired
Company hires and sector developments in structured finance
Dechert has hired Cameron Mitcham as a partner in London at the firm’s global finance practice, joining from Allen & Overy. Mitcham will work with the CLO team and securitisation practice, acting for managers, arrangers, originators, investors and other deal parties in CLO transactions.
ING has hired Stefan Rolf as global head of securitisation for wholesale bank lending. Based in .......
Market Moves 6 November 2018
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Housing practice pinched
Company hires and sector developments in structured finance
Fund launch
Trium Capital is partnering with Ellington Global Asset Management to launch the Ellington Trium Alternative Credit UCITS, a long/short credit UCITS fund. The fund is set to be launched 4Q18 and will leverage Ellington’s expertise in RMBS, CMBS, CLOs and corporate credit relative value strategies.
ILS
Nephila Climate has hired Ariane West as director .......
Market Moves 5 November 2018
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Strong technicals
European RMBS and CMBS primary market update
Technicals remain strong in the European CMBS and RMBS primary markets.
The Dilosk No. 2 deal is in focus in the primary RMBS market. Initial price thoughts of 90-95 have been released for the transaction’s senior notes – which are expected to pay a coupon of three-month Euribor plus 75bp – and it is likely to price on Wednesday (7 .......
Market Reports 5 November 2018
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Market moves update
Company hires and sector developments
ACIS resets due
The Chapter 11 trustee has filed a third amended joint plan for Acis Capital Management and a notice confirming a court order that: conditionally approves its disclosure statement; schedules a combined hearing regarding final approval of the disclosure statement and confirmation of the plan; and sets related deadlines. The plan contains an injunction barring Highland Capital Management .......
Market Moves 2 November 2018
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Market moves update
Company hires and sector developments in structured finance
Acquisitions
Lennar Corporation has agreed to sell its Rialto Investment and Asset Management business to investment funds managed by Stone Point Capital for US$340m. The transaction is scheduled to close on 30 November, subject to consent by the funds managed by Rialto and customary closing conditions. Lennar will retain its Rialto Mortgage Finance business, which it expects to move into .......
Market Moves 31 October 2018
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Retail rifts
UK CMBS impact limited despite store closures
Debenhams is the most recent UK retailer to announce a raft of store closures, further signalling the decline of the traditional retail sector in the country, although online retailers continue to perform well. Despite this, there is not likely to be an impact on UK CMBS backed by retail, with most transactions tied to large destination malls that are more immune to .......
News Analysis 30 October 2018
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Health check
Sears bankruptcy exposure gauged
Morningstar Credit Ratings has identified 28 CMBS loans, representing an allocated property balance of US$2.17bn, with exposure to stores that will close as part of Sears Holding Corp’s Chapter 11 bankruptcy filing. Sears’ departure is expected to be more detrimental to malls in secondary or tertiary locations where performance has already deteriorated, as these locations will be less desirable .......
News 30 October 2018
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Market moves update
Sector developments and company hires in structured finance
Moody's has downgraded the ratings of 123 tranches, placed on review for upgrade two tranches and affirmed 34 tranches in 84 Italian RMBS auto ABS, consumer loan ABS and consumer CDQ ABS deals . The rating actions were prompted by the rating agency's lowering of Italy's local-currency bond ceiling to Aa3 from Aa2. This which follows the downgrade of the ......
Market Moves 26 October 2018Premium Content
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Heightened holding
European ABS market update
Invesco is preparing a new €410m European CLO deal, along with GSO Capital Partners, which is planning a CLO reset. Elsewhere, Och-Ziff’s latest OZLME deal is reported to be sized at €412m (see SCI’s deal pipeline).
Overall European CLO spreads remain unchanged to slightly wider, as only a handful of bonds are out for the bid today. .......
Market Reports 26 October 2018
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Market moves update
Sector developments and company hires in structured finance
China
Fitch Ratings has launched Fitch Bohua Credit Ratings to serve China's onshore bond market and has appointed Danny Chen as Fitch Bohua's ceo. Initially, the company will cover banks, non-bank financial institutions and insurers, as well as the structured finance sector. Chen was previously ceo of Qingdao Conson Financial Holdings. A team of analysts, business development and support staff .......
Market Moves 25 October 2018
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Bridge-loan lifeline
Greystone closes CRE CLO milestone
Greystone Bridge Lending Fund last month completed its second CRE CLO (see SCI’s primary issuance database). Dubbed Greystone CRE 2018-HC1, the US$300m transaction is unique in that it is 100% secured by healthcare properties.
“The Greystone CRE CLO is the first-ever CRE CLO to be backed entirely by CRE loans secured by healthcare properties,” says Clifford Chance capital markets partner .......
News Analysis 24 October 2018