Capital Relief Trades
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New partnership
Market moves and sector developments
GP stakes firm Armen and Chorus Capital (Chorus) have announced a strategic partnership. As part of the partnership, Armen will acquire a 16% minority equity stake in Chorus Capital. The transaction – which is targeted to close by the end of the month – represents the third investment by Armen GP Stakes Fund I and its first in the .......
Market Moves 10 September 2024
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Secret Revolution
How will the US regional bank market develop?
The US CRT market is slowly absorbing volumes and experiencing increased growth from unexpected players. Regional bank deals may herald how the jurisdiction will develop.
Pinnacle Financial Partners and Valley National Bank entered the market last month with deals referencing mortgage and auto loan assets, respectively (SCI 29 July and 29 July). Both banks have below .......
News Analysis 10 September 2024
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Lofty heights
SRT market update
LOFT 2024-1, the latest issuance from Deutsche Bank’s established leveraged loans SRT programme, is set to close this month.
While SCI understands that the deal has a similar structure to its predecessor, distinctions include a different tranching and a tighter spreads (in line with recent market developments).
The deal references 0-18% of a portfolio, split between a .......
SRT Market Update 6 September 2024
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Oh Canada
SRT market update
Toronto Dominion is reportedly back in market with a repeat issuance of its inaugural trade and programme, which closed in February last year.
Like 2023’s deal (TD CRT), the underlying portfolio is backed Canadian and US high yield corporate loans, described as “below IG”. The spread is expected to land at plus 1050bp - 100bp tighter than the previous iteration. The .......
SRT Market Update 6 September 2024
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Job swaps weekly: The 'Art' of launching
People moves and key promotions in securitisation
This week’s roundup of securitisation job swaps sees two industry veterans join forces to launch Art Capital, a structured finance advisory business. Elsewhere, Citi has boosted its Oceania operation with a new head of asset-backed securitisation, while Cushman & Wakefield has hired a head of capital markets for the Americas from Five Horizons Partners.
Stuart Blieschke and Tim .......
Market Moves 6 September 2024
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Region' new heights
Key themes from SCI's recent regional banks webinar
Activity in the US CRT market is picking up, though it is yet to reach the levels that many market participants expected at the start of the year. With a number of regional US banks turning to the space, SCI’s Kenny Wastell hosted prominent industry professionals for a webinar on the challenges and opportunities presented.
The impermanence of .......
News Analysis 5 September 2024
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New programme
SCI catches up with Mike Strevens, head of structured guaran...
Central to the British Business Bank’s debt financing activities is the ENABLE Guarantee programme, which aims to increase SME lending capacity among specialist UK banks. The guarantee is structured as an unfunded SRT with the most senior part of the SME reference portfolio protected and the first loss/junior portions and a vertical slice of the remaining portfolio retained by the originator. .......
News Analysis 28 August 2024
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Gearing up
SRT Market Update
Heading into the autumn months, the SRT market is gearing up for a bustling end to the year, in spite of the volatility seen earlier this month. While the timelines for a couple of European transactions have been extended, Canadian and US bank activity is picking up pace.
Following a dramatic start to August, with a significant volatility .......
SRT Market Update 23 August 2024
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Diverging markets?
SRT investor-issuer relationships evolving
A common gripe among SRT practitioners is that the flood of new investors to the sector has suppressed spreads. However, some believe it has impacted investor-issuer relationship dynamics too.
According to one market participant, this difference in relationships is particularly pronounced between European deals and the deals which have recently been issued in the US. “While the main .......
News Analysis 23 August 2024
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Shot across the bows
US Senator Jack Reed urges the Fed to place additional guardrails around CRTs
Senator Jack Reed (D-RI) has called on the Federal Reserve to create stricter regulations on credit risk transfer (CRT) transactions. The US senator made the calls in a letter to the Federal Reserve, in a development that comes nine months after he wrote to the regulator warning that the risks of CRT trades “may not be fully understood”.
News Analysis 22 August 2024
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A buyer's market
Chorus Capital concludes fundraising
Chorus Capital (Chorus) has successfully concluded fundraising for Chorus Capital Credit Fund V (the fund), its latest dedicated risk-sharing fund.
Through this fundraising, the firm has raised c. US$2.5bn of capital commitments across parallel vehicles, meeting its target size. Comparatively, Chorus had amassed US$1.5bn of capital commitments for its previous fund (Chorus Capital Credit Fund IV) back in .......
News Analysis 19 August 2024
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Mini Morgan
SRT market update
JP Morgan’s latest new mortgage-referencing CRT has a unique structure which has raised some eyebrows.
The bank referred to the transaction as a “deconsolidated portfolio risk transfer” which transfers the mortgages to an off-balance sheet vehicle. The vehicle will in turn enter a credit agreement with a JP Morgan entity to borrow against the value of the retained .......
SRT Market Update 16 August 2024
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Funded access
Rated repacks on the rise
(Re)insurer participation in SRT deals has historically been limited to unfunded and non-STS transactions, but they are increasingly finding innovative ways to participate in funded deals. One such recent innovation is the EMX Partners platform, which combines (re)insurer risk appetite with third-party funding.
Since its launch in June 2023, EMX has effectively closed a debut transaction in Q3 2023 .......
News Analysis 16 August 2024
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Job swaps weekly: New Cayman structured finance chief for Maples
People moves and key promotions in securitisation
This week’s roundup of securitisation job swaps sees Maples and Calder naming a new head of its Cayman Islands structured finance practice. Elsewhere, Scotiabank has staffed up for the launch of its new Houston-based mortgage capital markets business, while an ex-Stout md and co-lead of structured credit has taken up a C-suite role at Unifi Asset Management.
Maples .......
Market Moves 16 August 2024
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Latest SRTx fixings released
SRT market sentiment highlights global market volatility.
The latest fixings for the SRTx (Significant Risk Transfer Index) have been released. If last month’s data points generally expressed a marginal widening across the indices, this month’s figures show that volatility has returned to the markets. Despite being the peak of the summer holidays, the beginning of the month of August has triggered a surge in volatility .......
News 14 August 2024
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The Great White Deep Freeze
SRT market update
After a bumper 2023 for Canadian CRT, issuers seem to be focused on other forms of capital allocation optimisation.
While, last year saw at least four of the big five Canadian banks issuing CRT deals with Canadian assets, issuance this year doesn’t seem quite as considerable.
One source expects CRT issuance to come back with force in .......
SRT Market Update 13 August 2024
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Focus on Ally
SRT market update
Ally Bank has released further details on its debut CRT transaction, ABCLN 2024-A, in its Q2 earnings report.
Ally retains the senior and first loss tranches, while protection has been bought on a 1.5-12.5 attach/detach mezzanine tranche. The average coupon is 7.18%, however SCI hears there is a range across the tranche with the most junior slice .......
SRT Market Update 9 August 2024
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Echo in
SRT market update
BNP Paribas is rumoured to be in market with a fresh SRT transaction entitled “Project Echo”.
The deal, which references leveraged loans, will have a tranche thickness of around 3-11%, and a targeted spread in the region of 8%. The notional portfolio size is US$2-3bn and the WAL is between two and three years.
The bank has .......
SRT Market Update 9 August 2024
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In its prime
Debutants boost auto CLN volumes
US$1.36bn across four prime auto loan CLN issuances has been placed so far this year, according to JPMorgan figures. The transactions have included debut deals, as well as repeat issuance from Santander.
Indeed, Santander’s latest auto CLN – June’s US$239m SBCLN 2024-A - represents its seventh from the series. The bank is already considered the market benchmark, primarily .......
News 7 August 2024