Capital Relief Trades
-
ICE merger challenged on 'competitive harm'
Sector developments and company hires
ICE merger challenged on ‘competitive harm’
The US FTC is seeking to block the proposed merger between Intercontinental Exchange (ICE) and its top competitor, Black Knight (SCI 5 May 2022). The regulator claims that the merger would drive up costs, reduce innovation and reduce lenders’ choices for tools necessary to generate and service mortgages.ICE owns the dominant .......
Market Moves 10 March 2023
-
-
-
No good news
Powell's testimony suggests higher cap requirements not ruled out
There was little good news for financial markets during the first of Chairman Powell’s two day testimony before the Senate Finance Committee (March 6 and 7), but US banks will have been particularly perturbed to learn that additional capital requirements may be forthcoming.
Powell did not distance himself from the comments made last December by Vice Chair for Supervision Michael Barr to .......
News 7 March 2023
-
'Conflict of interest' undermines CRT
Lawyers ring alarm bells about possible impact of SEC ruling on CRT market
The US regulatory capital relief trade market appears in grave danger from the controversial “conflict of interest” re-proposal and release made by the Securities and Exchange Commission (SEC) at the end of January, say lawyers.
The language in the proposing release “raises significant concerns” about whether SPE CRT deals are classified as “conflicted transactions” under the rules, says Mayer Brown in .......
News 6 March 2023
-
Banks seek CRT clarity
"Reservation of authority" at heart of regulator distaste for CRT, say sources
A top tier US bank has requested a non-objection letter from the Federal Reserve Bank of New York to clarify its attitude to regulatory capital relief trades and the 60-day period allowed for a reply is due to expire in the next few weeks, say well-placed industry sources.
The identity of the bank is not known but it is thought to be .......
News 4 March 2023
-
SRTx inaugural fixings released
Index values project worsening conditions for CRTs
The inaugural fixings for the SRTx (Significant Risk Transfer Index) have been released. The index values suggest that pricing volatility is rising and credit risk is worsening for US capital relief trades at a higher level than for European CRTs.
Overall, both pricing volatility and SRT execution conditions are shown to be skewing higher for SME transactions in .......
News 3 March 2023
-
Back to STACR
Freddie targets 70/30 bonds versus reinsurance split as supply drops
Freddie Mac expects to issue between $4.5bn and $6.5bn in the CRT space in 2023, and it targets a 70/30 split between the capital markets and the reinsurance market, says a spokesman for the GSE at the SFA conference in Las Vegas today (February 28).
This is around a third of the supply seen in 2022, which was a record year.
A 70/30 .......
News 1 March 2023
-
-
Balance sheet optimization continues
Piraeus Bank discloses synthetic securitisation
News 27 February 2023
-
-
-
-
-
Social housing RMBS debuts
Sector developments and company hires
Social housing RMBS debuts
Caisse des Dépôts et Consignations (CDC) has completed a rare securitisation collateralised by social housing loans originated by its savings fund division. Dubbed FCT FE Durable 2023, the €1bn transaction is backed a portfolio of 1,890 performing loans extended to 206 French social and affordable housing providers (SAHPs).The largest, the top five and top .......
Market Moves 17 February 2023
-
-
-
Regulatory resentment
Delegates at SCI's New York seminar implore transparency
A near-unanimous call for greater clarity from US regulators was made by investors and practitioners at SCI’s annual risk transfer and synthetics seminar last week in New York.
Some delegates went further, with one noting that US regulators have been “much less constructive than the FHFA” to the CRT mechanism and pleading with them to “align with their European counterparts.”
The US bank .......
News 14 February 2023
-
Homogeneity RTS released for STS synthetics
Sector developments and company hires
Homogeneity RTS released for STS synthetics
Market Moves 14 February 2023
The EBA has published its final draft regulatory technical standards (RTS) setting out the conditions for the assessment of the homogeneity of underlying exposures in STS on-balance sheet securitisation pools. At the same time, the authority has extended the existing work on the RTS on homogeneity for both ABCP and non-ABCP securitisations to ensure .......
-
-
MK&C acquisition prompts CS carveout
Sector developments and company hires
MK&C acquisition prompts CS carveout
Market Moves 10 February 2023
Credit Suisse has progressed the carveout of CS First Boston as a distinct capital markets and advisory-led business (SCI 28 October 2022) through the acquisition of The Klein Group (MK&C), for a purchase price of US$175m. The seller will receive equity in CS First Boston in the form of a convertible note, while Michael .......