CLOs

  • 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.

    “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 .......

    News Analysis 14 October 2021

  • Transitional financing

    Adam Zausmer, chief credit officer at Ready Capital, answers SCI's questions

    Q: Why do you feel the US CRE CLO sector is booming?
    A: The bridge lending market is certainly red hot at the moment. We tend to focus on less volatile assets, like multifamily, and clear trends we see across the US are tired properties in need of capital expenditure as well as a shortage of quality affordable housing. Non-bank .......

    The Structured Credit Interview 14 October 2021

  • Transition trauma

    A bumpy road ahead for shift to post-Libor world

    The structured finance market still has a great deal to do before the beginning of next year when contracts can no longer be quoted in Libor, agrees Amy Williams, partner and structured finance expert at Hunton Andrews Kurth.

    Very few securitizations or the assets which comprise the reference portfolios have moved over to quote contracts in term SOFR.  CLOs, RMBS and warehouse .......

    News Analysis 13 October 2021

  • US insurer CLO exposure 'relatively small'

    Sector developments and company hires

    US insurer CLO exposure ‘relatively small’
    The NAIC has released stress testing results on US insurers' exposure to CLOs, as of year-end 2020. The stress tests examined the resilience of CLOs under three different scenarios and mirrors findings from the year-end 2019 stress test, wherein normal CLO single-A rated tranches experienced losses under the worst-case scenario. In comparison, .......

    Market Moves 8 October 2021

  • Chopra on the march

    CFPB to expand its role and come down harder on securitisation

    The securtisation market will see a more aggressive CFPB under the leadership of recently appointed director Rohit Chopra, with “more frequent enforcements and bigger fines,” according to Rachel Rodman, a partner with Cadwalader, Wickersham and Taft.

    Rodman was speaking yesterday (5 October) at the annual SFA conference in Las Vegas on a panel addressing the future of housing .......

    News 6 October 2021

  • CIFC, TRS launch leveraged loan partnership

    Sector developments and company hires

    CIFC, TRS launch leveraged loan partnership
    Teacher Retirement System of Texas (TRS) and CIFC Asset Management have established a new leveraged loan investment fund platform known as Texas Debt Capital (TDC). A CIFC affiliate is the general partner and investment manager of TDC, while TRS is the anchor investor limited partner and has committed significant equity to the fund. The .......

    Market Moves 4 October 2021

  • Dual-currency debut

    Rare European CRE CLO prepped

    Starz Realty Capital has mandated leads for a rare European dual-currency static CRE CLO named Starz Mortgage Securities 2021-1 (see SCI’s Euro ABS/MBS Deal Tracker). The transaction has no reinvestment ability but allows the issuer to modify performing loans, as well as sell credit risk and defaulted assets, and it also features note protection tests.

    The transaction .......

    News 1 October 2021

  • New heights

    European CLO Market remains bullish with a strong pipeline

    European CLO issuance volumes are accelerating to new levels and are already some way past last year’s €22.1bn new issue total. However, the market is showing no signs of slowing down and predictions are for new issuance to hit around €30bn. 

    “2021 has been a very strong year for CLOs both in terms of new issuance and refinancings. .......

    News 30 September 2021

  • Synthetic Libor settings confirmed

    Sector developments and company hires

    Synthetic Libor settings confirmed
    The UK FCA has confirmed that to avoid disruption to legacy contracts that reference the one-, three- and six-month sterling and Japanese yen Libor settings, it will require ICE Benchmark Administration to publish these settings under a 'synthetic' methodology, based on term risk-free rates, for the duration of 2022. However, these six Libor settings will be .......

    Market Moves 29 September 2021

  • Fraud charges for Honor Finance pair

    Sector developments and company hires

    Fraud charges for Honor Finance pair
    The US SEC has announced fraud charges against James Collins and Robert DiMeo, the former principals of Honor Finance, for misleading investors about the subprime automobile loans that backed its US$100m offering. The SEC's complaint, filed in US District Court for the Northern District of Illinois, alleges that the pair were responsible for false .......

    Market Moves 24 September 2021

  • US CLOs, Trups CDOs under observation

    Sector developments and company hires

    US CLOs, Trups CDOs under observation
    Fitch has placed 102 tranches issued by 43 US CLOs and 13 tranches issued by seven Trups CDOs under criteria observation (UCO), following the publication of its CLO and corporate CDO rating criteria last week (SCI 17 September). The agency intends to resolve the UCO status by applying the updated criteria to each .......

    Market Moves 22 September 2021

  • Not so new kids

    CLO manager readying for launch

    Not yet a year old, Sycamore Tree Capital Partners is aiming high. The firm intends to become a significant player in CLO management, with the belief that the experience and character of its team are more important than its age.

    “Mark Okada, Jack Yang and I launched Sycamore Tree officially in November 2020, as a boutique private and .......

    News Analysis 22 September 2021

  • Pandemic 'feedback loop' highlighted

    Sector developments and company hires

    Pandemic ‘feedback loop’ highlighted
    Secular changes affecting the recovery of in-person office occupancy in New York City is consequential not only for property-level cashflow, but may also have ripple effects on other sectors, Fitch suggests. The city is the largest US office market and the rating agency says it provides a good case study of the potential feedback loop of .......

    Market Moves 21 September 2021

  • Replacement issues

    SOFR challenges explored

    Term SOFR is expected to be the main replacement for US Libor. This premium content article explores the challenges the new benchmark presents to US CLO equity investors.

    The US Federal Reserve’s Alternative Reference Rates Committee (ARRC) has firmly backed Term SOFR to replace Libor (SCI 2 August). The new benchmark provides US CLO equity investors with some challenges ......

    News Analysis 21 September 2021

    Premium Content

  • CLOs and beyond

    Don Young, partner and co-founder of CBAM Partners, answers SCI's questions

    Q: How and when did you become involved in the CLO market?

    My partner Mike Damaso and I have been managing CLOs since 2001. I first became involved in the space when I joined Octagon Credit investors. After this, I went on to manage the Performing Credit business at Och-Ziff, which included US$7.5bn of CLOs. Mike has over 20 years of .......

    The Structured Credit Interview 20 September 2021

  • Securitisation execs promoted in PGIM reorg

    Sector developments and company hires

    Securitisation execs promoted in PGIM reorg
    PGIM Fixed Income has reorganised its senior management team, with the appointments effective from 1 January 2022. Under the reorganisation, md John Vibert has been promoted to the newly created role of president.

    Vibert joined PGIM Fixed Income in 2014 as the head of securitised products and serves in that role currently. Prior .......

    Market Moves 17 September 2021

  • NPR issued on GSE capital framework

    Sector developments and company hires

    NPR issued on GSE capital framework
    The FHFA is seeking comment on a notice of proposed rulemaking that would amend the Enterprise Regulatory Capital Framework (ERCF) for Fannie Mae and Freddie Mac. The proposed amendments would refine the prescribed leverage buffer amount (PLBA) and the capital treatment of credit risk transfers (CRT) to better reflect the risks inherent in the .......

    Market Moves 16 September 2021

  • Specialist lender stake acquired

    Sector developments and company hires

    Specialist lender stake acquired
    BNP Paribas Asset Management (BNPP AM) is set to acquire a majority stake in Dynamic Credit Group, the Amsterdam-based asset manager and specialist lender with €9bn of assets under management. The deal will allow BNPP AM’s private debt and real assets (PDRA) investment division - which currently managed €11bn of client commitments - to significantly grow .......

    Market Moves 15 September 2021

  • Structural innovation

    Evolution of Euro CLOs set to continue

    European CLOs issued during 2021 have started to resemble pre-pandemic deals, with par subordination returning to the 38%-40% range compared with 42%-44% for CLOs issued last year. At the same time, documentation and structural features continue to evolve in response to the challenging environment, adding further flexibility for effective management of CLO portfolios.

    “Last year, CLO documentation changed, .......

    News 10 September 2021

  • Chinese reserves

    Growth boosts domestic securitisation market

    China’s continued economic growth has boosted both securitisation performance and issuance volumes. However, bank asset quality remains at risk because of high economic uncertainties from the lingering pandemic threat and ongoing structural adjustment in the economy. Yet bank asset metrics benefit from continued disposal of bad debts using their substantial loan loss reserves.

    According to the latest Moody’s .......

    News 10 September 2021

  • Cyberattack scenarios weighed

    Sector developments and company hires

    Cyberattack scenarios weighed
    S&P reports that it has seen more credit-relevant cyber events in the last six months than in the previous six years, including the first structured finance transaction reporting an operational disruption following a ransomware attack on the originator and servicer (SCI 28 May). The rating agency says it has explored several hypothetical scenarios to identify areas .......

    Market Moves 8 September 2021
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