CLOs
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US expansion
John Fraser, the new chairman of Tikehau's global structured...
Q: Tikehau Capital launched its first US CLO in August. Could you explain the motivations for doing so?
The Structured Credit Interview 22 November 2021
A: Establishing a presence in the US CLO market is a key part of Tikehau Capital’s growth plans for its credit platform. The firm is already active in Europe with five CLOs outstanding and, with significant plans for future growth, it’s a natural extension .......
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GSE scorecard released
Sector developments and company hires
GSE scorecard released
The FHFA has released the 2022 Scorecard for Fannie Mae, Freddie Mac and Common Securitization Solutions (CSS). The purpose of the 2022 Scorecard is to hold the GSEs and CSS accountable for fulfilling their core mission requirements by promoting sustainable and equitable access to affordable housing and operating in a safe and sound manner.
The 2022 Scorecard focuses .......
Market Moves 18 November 2021
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Dutch mortgage alliance expanded
Sector developments and company hires
Dutch mortgage alliance expanded
Market Moves 16 November 2021
Achmea Bank is set to acquire a €500m mortgage portfolio from Dutch insurer a.s.r., which will continue to manage the mortgages for Achmea Bank. The two organisations have expressed the intention to conduct additional transactions of €500m in both 2022 and 2023. In addition, Achmea Bank will acquire roughly €190m of newly originated mortgages from a.s.r. .......
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Risk mitigation
Euro CLO wraps gaining traction
Assured Guaranty (Europe) SA this week closed a financial guarantee for a further European CLO, following the wraps it recently provided for the North Westerly V CLO and Tymon Park CLO deals (SCI 6 September). Financial guarantees are proving attractive to investors seeking to reduce regulatory capital consumption, both on existing exposures and new investments.
The latest .......
News Analysis 12 November 2021
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Sri Lanka eyes remittance securitisation
Sector developments and company hires
Sri Lanka eyes remittance securitisation
The government of Sri Lanka (GOSL) is requesting competitive proposals from banks and investors for consideration to be appointed as counterparts or arrangers for its proposed securitised financing arrangement (SFA). The arrangement would be backed by foreign currency receipts of the Central Bank of Sri Lanka (CBSL) under the mandatory sale of 10% of workers' .......
Market Moves 12 November 2021
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Indian securitisation market presents challenges
The Indian structured finance market has been around for ove...
The market revolves around Indian banks' targets for lending to priority sectors. Banks have traditionally been the largest investors in securitised debt, as they need to fulfil the Indian central bank’s requirements to lend a target percentage of their loan books to priority sectors, which are defined by the central bank and include minorities, agriculture, SMEs and export industries. The .......
Talking Point 11 November 2021
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First LBR PCC investor signed
Sector developments and company hires
First LBR PCC investor signed
Lloyds has announced that Ontario Teachers’ Pension Plan Board will be the first investor to support underwriting through its multi-insurance SPV, London Bridge Risk (LBR) PCC. LBR was established in January of this year with sponsorship from Lloyds, with ambitions to create a market that invites new forms of capital and allow for easier access .......
Market Moves 10 November 2021
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Multi-currency CLO closed
Sector developments and company hires
Multi-currency CLO closed
Barclays has closed a multi-currency managed cashflow balance sheet CLO. Dubbed Duke Global Funding, the £4bn-equivalent transaction is backed by 519 senior secured and senior unsecured loans extended predominantly to large corporate obligors in Western Europe and the US. The underlying loans are denominated in US dollars, sterling and euro.In terms of geographical diversification, the initial portfolio .......
Market Moves 9 November 2021
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US CLO equity outperforms
Sector developments and company hires
US CLO equity outperforms
US CLO Equity cashflows average 15.2% across 1,038 BSL transactions that have had four payment dates in 2021, according to a report from JPMorgan CLO research analysts. This is the highest since 2016, which averaged 19.6%.CLOs that were reset in 2021 fared best with a 22% average return driven in part by a small minority that .......
Market Moves 8 November 2021
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Fed set to reduce asset purchases
Sector developments and company hires
Fed set to reduce asset purchases
The New York Fed’s FOMC has increased the System Open Market Account (SOMA) holdings of Treasury securities by at least US$70bn per month and of agency MBS by at least US$35bn per month during the monthly purchase period beginning in mid-November. Additionally, SOMA holdings of Treasury securities will increase by at least US$60bn per .......
Market Moves 5 November 2021
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Servicers facing 'unprecedented' turnover
Sector developments and company hires
Servicers facing ‘unprecedented’ turnover
US commercial mortgage servicers are facing unprecedented turnover levels and filling open positions in the tight labour market may ultimately increase the cost of servicing loans, Fitch suggests. However, the agency notes that to date, there have not been any noted declines in servicing proficiency among Fitch-rated primary, master and special servicers.
Fitch reports lower-than-average employee .......
Market Moves 4 November 2021
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SLM EODs eyed
Sector developments and company hires
Fitch has downgraded from single-B to double-C the outstanding class A4 and B notes of SLM Student Loan Trust 2007-7, 2008-1 and 2008-4, due to the legal final maturity date of the class A4 notes being approximately three months away in January 2022 for SLM 2007-7 and 2008-1 and less than 10 months .......
Market Moves 2 November 2021
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Matryoshka doll?
Use of proceeds proving contentious for ESG securitisations
The EU taxonomy regulation and Sustainable Finance Disclosure Regulation (SFDR) are posing challenges for securitisation issuers and investors. For now, use of proceeds remains the most contentious issue.
Announced in late 2019, the European Green Deal reflects the EU’s ambitious bid to lead the world on climate action. The deal’s commitments became legally binding by the entry into .......
News Analysis 1 November 2021
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Securitisation stamp duty eyed
Sector developments and company hires
Securitisation stamp duty eyed
Market Moves 29 October 2021
The UK government is introducing legislation within Finance Bill 2021-22 that provides a power to make stamp duty and stamp duty reserve tax (SDRT) changes relating to securitisations and ILS by secondary legislation. The power will be a freestanding provision and will allow HM Treasury to make regulations to provide that stamp duty or SDRT is .......
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Still strong
European ABS/MBS market update
In a quieter week than of late, two full capital stack deals have been competing for investor attention in the European ABS/MBS primary market. Strong demand for both Pixel 2021 and SC Germany Consumer 2021-1 suggests that the market is still strong.
“I think both deals have been executed very well,” notes one ABS/MBS trader. “For SC Germany Consumer .......
News 28 October 2021
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New banking rules
Sector developments and company hires
The European Commission has adopted new EU banking rules under CRR 3 and CRD 4, with the aim of ensuring that EU banks become more resilient to potential future economic shocks, while contributing to Europe's recovery from the Covid-19 pandemic and the transition to climate neutrality. The Commission notes that while the overall level of capital .......
Market Moves 28 October 2021
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Covid dip
CRE CLO churn rates drop
Churn rates in US managed CRE CLOs continue to decline, according to new research from KBRA assessing collateral turnover in recent vintage transactions. The study analysed all CRE CLO transactions issued between 2017 and 2020, gathering data on US$23.3bn in issuance across a total of 27 transactions. Most of these transactions had reinvestment periods of 24 months (51.4%) or .......
News 28 October 2021
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Comprehensive metric?
Total alpha touted as CLO performance measure
The CLO market is seeing such growth that there are calls for a more complete performance measure to be introduced. Total alpha is being touted as one way to differentiate between CLO managers.
Now standing at over US$1trn in issuance, the CLO asset class is becoming more mainstream. “The market has grown so much – even the pension .......
News 25 October 2021
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Highland Capital lawsuit filed
Sector developments and company hires
Highland Capital lawsuit filed
Market Moves 25 October 2021
The latest lawsuit brought by Highland Capital Management (HCMLP) against former employees has been filed in the bankruptcy court of the northern district of Texas. The action seeks to “recover hundreds of millions of dollars in damages that HCMLP suffered at the hands of its founder, James Dondero, acting in concert with other entities that he owned .......
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Gallatin CLO platform acquired
Sector developments and company hires
Gallatin CLO platform acquired
Aquarian Holdings has launched Aquarian Credit Partners (ACP), a syndicated high-yield credit investment management platform. Aquarian has partnered with Justin Driscoll, Bo Williams and the rest of the Gallatin Loan Management team to form ACP, which has assumed management of Gallatin’s existing CLOs, with more than US$800m of assets under management.Gallatin has a track .......
Market Moves 22 October 2021
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Big bang?
Tokenisation touted as a replacement for securitisation
Tokenisation is being touted as a potential replacement for securitisation, given its many applications and benefits. However, a number of challenges remain before the technology can be fully adopted by the market.
News Analysis 14 October 2021
“Tokenisation could replace securitisation – but it won’t be a big bang. However, when you see the speed of digitisation in some areas, you see it has the .......