NPLs

  • Provisioning impact muted

    The ECB and European Commission have both put forward new rules for minimum loss coverage, which are a step towards improving provisioning practices across Europe and avoiding future unreserved non-performing loan build up. Although having two different sets of rules may create regulatory uncertainty across the banking sector, the impact for NPL securitisation seems muted.

    “The rules deal .......

    News Analysis 11 April 2018

  • Market moves - 29 March

    Europe

    Man Group has hired Simon Finch as cio of credit at Man GLG, its discretionary investment management engine. In this newly created role, Finch will be responsible for Man GLG’s credit business and will have oversight of the credit portfolio management teams. He will report to Teun Johnston, ceo of Man GLG, and work closely with Man GLG’s cio, .......

    Market Moves 29 March 2018

  • Synthetic NPLs gain traction

    The ECB’s latest non-performing loan provisioning guidelines are expected to trigger increased synthetic NPL securitisation issuance. Nevertheless, defining a credit event for a portfolio of loans that are already non-performing remains a significant challenge.

    The ECB guidelines prescribe full provisioning for unsecured NPLs after two years and seven years for secured NPLs. “This could potentially incentivise banks to .......

    News Analysis 29 March 2018

  • Indian NPL investment increasing

    India’s bankruptcy framework is facilitating more investment activity in the nation’s non-performing loan market. Clearwater Capital is one of the latest investors to allocate more capital into Indian NPLs.  

    According to Subhashree Dutta, md at Clearwater Capital: “The new Insolvency and Bankruptcy Code brings US-style Chapter 7-11 bankruptcies to India, enabling the resolution of insolvencies in a time-bound manner, .......

    News Analysis 29 March 2018

  • Issuers urge goodwill on STS

    European securitisation issuers are modelling new transactions and updating legacy deals, across a range of asset classes, to be STS compliant. However, there is agreement that an overly punitive regulatory environment could harm the chances of the framework’s success, with some issuers backing the implementation of a transition period.

    Steve Gandy, md at Santander Global Corporate Banking, commented at a .......

    News Analysis 15 March 2018

  • Split-mortgage RMBS eyed

    Securitisations of split mortgages could emerge in Ireland, according to DBRS, given improving fundamentals and the clear servicing regime for non-performing and re-performing loan portfolios in the country. However, the unusual features associated with such assets may prove challenging.

    Split-mortgage restructuring is one method of resolving mortgage arrears provided for under the Irish Mortgage Arrears Resolution Process (MARP) .......

    News 14 March 2018

  • Market moves - 2 March

    North America

    Cowen and Company has named Philip Cushman as head of global institutional sales which includes managing both the institutional equity and credit sales teams and Burton Welly has been named head of special situations and distressed credit trading, Cowen and Company, increasing his responsibilities to include all distressed credit trading initiatives. Prior to joining Cowen, Cushman served as md and .......

    Market Moves 2 March 2018

  • Bank acquisition trend continues

    HSH Nordbank has been sold for €1bn to JC Flowers and Cerberus. The agreement is accompanied by a sale of predominantly shipping non-performing loans to an acquisition vehicle of Cerberus and JC Flowers, as well as minority owners GoldenTree Asset Management and Centaurus Capital. The sale reflects an investment trend, whereby private equity investors acquire distressed financial institutions rather NPL .......

    News Analysis 1 March 2018

  • NPL platform incentives weighed

    As part of efforts to facilitate a non-performing loan secondary market, the European Commission is considering a private sector-led platform to handle data warehousing and potentially trade execution. Such an initiative could eliminate information asymmetry and lower barriers to entry, but its success hinges on incentivising both buyers and sellers to use it.

    The major driver behind the proposed NPL .......

    News Analysis 26 February 2018

  • Indian investment boost expected

    India's latest guidelines aimed at speeding up non-performing loan resolution is likely to increase banks' credit costs and undermine earnings in the near term. The new regime, however, is also expected to boost NPL investment in the country.

    "The new regime forces speedier resolution and provides certainty of timelines for large account resolution. I would expect a deepening of credit .......

    News Analysis 23 February 2018

  • Market moves - 16 February

    EMEA

    Fulcrum Asset Management has recruited Mark Horne as a director within the newly created Fulcrum Alternative Strategies team, reporting to partner Matthew Roberts. Horne previously worked as an independent asset management consultant in London and Paris. Prior to that, he was a senior credit manager researcher at Willis Towers Watson and was director of client services at Natixis Global .......

    Market Moves 16 February 2018

  • 'Test case' mortgage deal disclosed

    Permanent TSB unveiled this week its Project Glas portfolio of distressed mortgages, as the Irish lender seeks to offload approximately €4bn of non-performing loans. The portfolio is understood to comprise a mix of buy-to-let and home loan assets and is being seen as a test case for further Irish NPL issuance.

    "This is the first jumbo mortgage NPL deal in .......

    News Analysis 16 February 2018

  • Call for consolidation

    Bank of Italy governor Ignazio Visco has called for Italian bank consolidation in order to tackle subdued profitability owing to, among other factors, higher provisions associated with non-performing loan disposals. Consolidation could improve the already buoyant issuance of NPL transactions.

    The central bank governor states that although profitability over the coming years should be sustained by a reduction in loan .......

    News 12 February 2018

  • Intesa leads asset management shift

    Intesa Sanpaolo announced this week a four-year plan to halve its non-performing loan exposures by 2021 by boosting fee income and selling its servicing platform. The lender has led the shift in fee-earning businesses among Italian banks, which coincides with low interest rate pressure on interest margins and ECB demands for a reduction in bank NPL volumes (SCI 4 October .......

    News 9 February 2018

  • Risk transfer round-up - 9 February

    Credit Suisse is rumoured to be re-tranching its existing risk transfer transactions, echoing recent market comments over the prospective use of this innovation in the capital relief trade space (SCI 26 January). The technique involves slicing in two the junior risk, in an attempt to cope with higher capital requirements for the retained tranches.

    Elsewhere, market sources observe that Greek lenders are .......

    News 9 February 2018

  • Market moves - 2 February

    North America

    CVC Credit Partners has named Gretchen Bergstresser as global head of performing credit - a new role within the firm - having led its US performing credit strategy. Phil Raciti, senior md in CVC's New York office, will become head of US performing credit. Additionally, from 1 February partner and London-based senior portfolio manager Jonathan Bowers will become .......

    Market Moves 2 February 2018

  • Distressed exchange queried

    China Huarong Asset Management, one of China's largest state-owned distressed debt managers, yesterday launched a Beijing-based bad debt exchange. The exchange is expected to provide an inventory of what's available in the Chinese non-performing loan market rather than a trading platform that can facilitate transactions.

    "NPLs are illiquid, so to appropriately price them can take months of due diligence and .......

    News Analysis 2 February 2018

  • Call for transparency underlined

    A push for transparency is a common thread among European initiatives to reinvigorate the securitisation markets. Communication and standardisation are expected to play significant roles in facilitating this effort.

    Christian Thun, ceo at European DataWarehouse, agrees, in principal, that better communication is required to improve transparency in the European securitisation market. "Reading through the STS regulation, communication is only mentioned .......

    News Analysis 2 February 2018

  • Interest shortfall risk spied for VOLT deals

    Many 2017 VOLT deals did not receive principal payments in the January 2018 remittance cycle, as the pace of liquidations has slowed dramatically. This appears to be connected to an increase in REO-to-rental activity, which is increasing upward pressure on the expected average lives of senior notes and is increasing risk of interest shortfalls.

    Reduced liquidation principal coupled with the absence .......

    News 31 January 2018

  • Market moves - 26 January

    North America

    Schulte Roth & Zabel has elected Stephen Schauder as a partner in the structured finance and derivatives group, working with co-heads Craig Stein and Boris Ziser. Schauder joined the firm as an associate in 2015 after having previously worked at Stroock & Stroock & Lavan in the structured finance department.

    CIFC has hired Jay Huang as md, senior .......

    Market Moves 26 January 2018

  • Non-QM tipped as 'next opportunity'

    Last year marked the beginning of a transition from a post-crisis distressed recovery trade to a more efficient market for the US securitisation sector, underpinned by robust performance and favourable economic conditions. Against this backdrop, mortgage credit and private credit financings are expected to remain a strong source of risk-adjusted returns.

    Greg Parsons, ceo of Semper Capital Management, characterises the .......

    News Analysis 19 January 2018
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