CLOs

  • Rules of engagement

    Dialogue helps take edge off regulatory requirements

    Regulatory decisions and indecision have set the tone for structured finance around the world since the financial crisis. The European market in particular has been choked by tight guidelines, but there are signs of a softening regulatory stance as the industry continues to engage with regulators and policymakers.

    "The structured finance market is not dead. It has restarted in the .......

    News Analysis 24 December 2013

  • Risk tension

    Risk retention pivotal for Euro CLO market

    European CLOs continue to perform well, despite regulatory actions serving to constrain the market. Steady issuance is expected even in the face of a number of hurdles, with changes such as risk retention requirements forcing investors to reconsider manager selection and issuance expectations.

    "From a manager's perspective, CLOs are an attractive way to raise AUM. For some investors, the product .......

    News Analysis 23 December 2013

  • Fixed rate bucket employed

    Pramerica Investment Management has closed Dryden 29 Euro CLO 2013, its second European CLO issued this year. Upsized from €300m, the €415m transaction is noteworthy because it allows for about 30% of the assets to pay a fixed rate coupon, compared to a traditional industry average of about 5%.

    "Allowing fixed coupon assets sets us apart as a manager and .......

    News Round-up 20 December 2013

  • Volcker Rule spurs CLO sale

    BankUnited has disclosed that it sold its CLO holdings, as well as some Re-Remic positions on the open market. The sales were prompted by the release of the Volcker Rule and its potential impact on the bank's investment activities, it says.

    The amortised cost basis of the CLOs sold was approximately US$431m, comprising the firm's entire CLO portfolio, and the .......

    News Round-up 20 December 2013

  • Caution urged on CLO risk retention

    The Loan Syndications and Trading Association (LSTA) has commissioned a study conducted by Oliver Wyman, which finds that the recently re-proposed regulations to implement risk retention requirements for ABS under Dodd-Frank will likely severely limit the availability of CLOs in the future. The study recommends that regulators proceed cautiously to implement risk retention in a way that does not disrupt .......

    News Round-up 19 December 2013

  • First-half weighting for CDO supply

    JPMorgan has surveyed CDO BWIC volume from 1 January to 29 November, based on original notional balances. They find that US CDO BWIC volume dropped by 42% year-over-year to US$36.9bn, driven by a reduction in ABS CDO bid-lists, with the liquidation of the Maiden Lane portfolios boosting activity in 2012.

    However, US CLO BWIC volume of US$22.48bn is around 5% .......

    News Round-up 18 December 2013

  • Euro VFNs re-emerge

    PineBridge Investments has closed its €335m Euro-Galaxy III CLO, which features a variable funding note (VFN) that provides enhanced flexibility and efficient cash management during the ramp-up phase. It is the first European CLO to include a VFN since the financial crisis.

    Arranged by Barclays Bank, Euro-Galaxy III marks the nineteenth CLO that PineBridge has completed. As of 17 December, .......

    News Round-up 18 December 2013

  • Italian lease ABS, SME CLO outlooks differ

    Weaker structural features in Italian lease ABS compared with Italian SME CLOs mean that Fitch's 2014 rating outlook for the two sectors is different, despite both being exposed to Italian SME asset performance. Most outstanding Italian ABS leasing transactions were structured so the portfolio could be replenished during the initial revolving period and that the mezzanine tranches could be repaid .......

    News Round-up 17 December 2013

  • Diversification boost

    Euro periphery to mitigate negative net issuance?

    The European securitisation market is set to end 2013 on a positive footing, boosted by a growing diversity of new issuance. However, while the re-marketing of retained transactions is expected to further augment the peripheral paper on offer next year, negative net issuance remains a concern.

    Placed European ABS issuance volume is expected to reach about €64bn this year, 16% .......

    News Analysis 17 December 2013

  • CRA debuts SF approach

    Scope has published its first methodology guidelines for rating and monitoring structured finance products. The guidelines lay down the key principals that the rating agency intends to apply to all types of structured finance instruments and present how key criteria are integrated in the rating process.

    Scope believes that the analysis of qualitative factors, based on objective components, plays a .......

    News Round-up 16 December 2013

  • Pricing change

    CLO pricing methodologies and differences discussed

    Representatives from Bloomberg, CIFC and Kanerai discussed CLO pricing methodologies, as well as differences between legacy and 2.0 deals during a live webinar hosted by SCI in October (view the webinar here). Topics included changes in the underlying loan market and where to find relative value. This Q&A article highlights some of the main talking points from the .......

    Talking Point 16 December 2013

  • Stable outlook for German commercial ABS

    The fall in German corporate insolvencies in 2013 to a 14-year low will lead to decreasing default rates in German commercial ABS transactions, according to Fitch, supporting its stable ratings outlook for the sector in 2014. The decrease in corporate insolvencies is consistent with the agency's expectation of a benign economic environment in Germany, which is incorporated into its deal-by-deal .......

    News Round-up 12 December 2013

  • CLO supply expectations polled

    With a head-count of 180, last week's SCI 7th Annual Seminar saw a 38% increase in attendance on the previous year's conference. Sponsored by Banca IMI and Reed Smith, the seminar focused on credit market dislocation and alternative ways of optimising CLO and ABS returns. Presentations from the event can be downloaded here.

    In a poll conducted after .......

    News Round-up 12 December 2013

  • Volcker Rule concerns linger

    The US Fed, the FDIC, the OCC, the CFTC and the SEC have issued final rules to implement section 619 of the Dodd-Frank Act, known as the Volcker Rule. While changes from the original proposal have broadly been welcomed by the securitisation industry, some lingering concerns remain.

    The final rules prohibit insured depository institutions and companies affiliated with insured depository .......

    News 11 December 2013

  • Top trades touted

    Morgan Stanley suggests in its global securitised products outlook for 2014 that the market is on the verge of a major transition from being liquidity-driven to being growth-dependent. While the returns are more modest in this scenario than they have been in the past, strategists at the bank believe that alpha opportunities within the sector remain more significant, scalable and .......

    News 11 December 2013

  • Euro bank boosts CLO supply

    A plethora of 2005-, 2006- and 2007-vintage bonds circulated in the US CLO secondary market yesterday. Supply was boosted by a bid-list with over 80 cash CLO/CDO items totalling over US$800m in original face value, which is understood to have come from a European bank looking to free up balance sheet.

    Prices observed by SCI's PriceABS data were .......

    Market Reports 10 December 2013

  • Mezz SME CLO credit risk highlighted

    German mezzanine CLOs face greater credit risk than refinancing risk, Fitch suggests. Defaults during the lifetime of the underlying loans appear to be exceeding defaults at scheduled loan maturity.

    Of the10 Fitch-rated German mezzanine CLOs issued between 2004 and 2007, seven have reached scheduled maturity, making an initial assessment of the relative impact of credit and refinancing risk possible. In .......

    News Round-up 9 December 2013

  • Strong credit quality forecast for global CLOs

    Moody's expects the credit quality of new CLOs in the US, Europe and Asia-Pacific to be strong in 2014. The agency says that the CLO 2.0 template will underpin strong performance in US balance sheet and SME transactions in particular.

    Increased subordination across the two segments is anticipated to offset the negative effects of newly issued loans of lower average .......

    News Round-up 9 December 2013

  • Minimal Euro default rate underlined

    Only 1.5% by original issuance volume of European structured finance notes outstanding in mid-2007 had defaulted by end-3Q13, according to S&P's latest quarterly transition study. The quarterly transition study analyses cumulative rating transitions and defaults from the beginning of the financial downturn - which is assumed to be mid-2007 - until end 3Q13, aggregating by issuance volume.

    "The 12-month rolling .......

    News Round-up 6 December 2013

  • Stable performance forecast for CLOs

    US CLO issuance surpassed US$66bn through October 2013 and loan fund inflows were above US$56bn, increasing the visible demand for leveraged loans by US$122bn, according to Fitch. The agency notes that issuers of more than 81% of loans held in Fitch-rated CLOs maintain stable rating outlooks, indicating an expectation of stable rating performance over the next one to two years.

    News Round-up 6 December 2013

  • Pricing data access for CLO platform

    Vichara Technologies has integrated its V* CLO solution with Markit's pricing services. Mutual clients will be able to access Markit's pricing service within Vichara's platform and Markit will provide daily pricing feeds for leveraged loans, corporate bonds, CLOs and loan mapping services within the V* CLO framework.

    The V* platform allows for forecasting, valuation and analysis of CLOs, CBOs, CDOs .......

    Job Swaps 5 December 2013
×