RMBS
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Reissue, renew, reprint
Big banks focus on retention in German RMBS
The reissuing, renewing and reprinting of retained structures seems to be the name of the game in German RMBS, as covered bonds remain the preferred secured wholesale funding tool of German banks as TLTROs disappear. However, with higher all-in coupons and widening covered bond spreads, the relative pricing differential is narrowing and the funding diversification argument may become stronger.
News Analysis 17 November 2023
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Job swaps weekly: BNP bulks up in Americas
People moves and key promotions in securitisation
This week’s roundup of securitisation job swaps sees BNP Paribas building out its Americas-focused advisory and solutions teams, with two senior securitisation-focused appointments among a number of hires. Elsewhere, American Century Investments has appointed two industry veterans to its securitised markets team, while Academy Securities has snapped up a senior Citi exec as md and head of RMBS capital .......
Market Moves 17 November 2023
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Value covered
LibreMax Capital cio Greg Lippmann and ABS head Kevin Tyler...
Q: How has the evolution of the banking system and regulatory environment over time shaped private credit markets?
The Structured Credit Interview 16 November 2023
GL: Before the global financial crisis (GFC), there were certain aggressive financial products which enabled consumers to become overleveraged, as well as light bank capital charges for investment bank holdings of structured products, which ultimately brought Lehman Brothers to default and spurred .......
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Waiting game?
Islamic securitisation gaining traction
Saudi Real Estate Refinance Company (SRC) is widely anticipated to become the first to issue a Shari’ah-compliant RMBS transaction in the Kingdom. However, the drivers for a broader lift-off in Islamic limited recourse securitisation are yet to materialise.
The Islamic finance market is not dissimilar to the conventional securitisation market. In the conventional market, consumer retail banks seek .......
News Analysis 13 November 2023
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Job swaps weekly: ESG debt-swap pioneer transitions to UBS
People moves and key promotions in securitisation
This week’s roundup of securitisation job swaps sees a Credit Suisse veteran take on a senior ESG- and structured-credit role at UBS Group following the latter’s acquisition of the former. Elsewhere, Colliers has lured two ex-George Smith Partners (GSP) executives as vice presidents, while a senior Federal Housing Finance Agency (FHFA) exec has joined Guy Carpenter.
Credit Suisse .......
Market Moves 10 November 2023
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Scope sees ratings drift reverse in Q3
Market updates and sector developments
Ratings drift in structured finance instruments improved in the third quarter of 2023 for the first time in more than a year, Scope Ratings has revealed. The metric measures the ratio between upgrades minus downgrades and the total number of monitored ratings over the past year.
While the agency oversaw just 12% of 294 instruments upgraded against 17% .......
Market Moves 7 November 2023
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CLO ESG scores compared
Market updates and sector developments
Sustainable Fitch reports that European CLOs – with an average ESG Score of 50.4 - have noticeably higher ESG scores, environmental scores and social scores than North American CLOs, which demonstrate an average ESG Score of 47.9. Governance scores are broadly similar across the two regions, however.
These insights are based on an assessment of 317 European CLOs .......
Market Moves 2 November 2023
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Depletion analysis
CRT loan mods stress-tested
Excessive loan modifications could result in credit support depletion for US agency credit risk transfer transactions, according to S&P. A scenario analysis undertaken by the rating agency on typical CRT structures suggests that the presence of an associated coupon on the most subordinate B3H class, along with an elevated SOFR mitigates modification losses - particularly under higher interest rate .......
News 2 November 2023
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PRA consults on CRR rules
Market updates and sector developments
The UK PRA has launched a consultation on draft rules to replace firm-facing requirements regarding securitisation under the CRR in 2H24. As such, it has published a discussion paper (DP) that raises certain key issues for feedback, in order to inform its approach - including the use of unfunded credit risk mitigation (CRM) in SRT transactions.
In particular, the .......
Market Moves 1 November 2023
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Job swaps weekly: Antares beefs up team after strategy launch
People moves and key promotions in securitisation
This week’s roundup of securitisation job swaps sees Antares Capital hiring multiple senior executives, as it closes its debut broadly syndicated loan CLO. Elsewhere, Prosperise Capital has appointed PC2 Capital’s founder as partner and head of CRE following its acquisition of the firm, while S&P Global has promoted three securitisation execs to md in the Americas.
Antares Capital .......
Market Moves 27 October 2023
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Legacy adjustments
Call for enhanced transparency for restructured mortgages
A number of recent RMBS have securitised legacy Irish and Spanish restructured residential mortgages (see SCI’s International ABS Deal Tracker). Fitch says it anticipates an increase in both loan restructurings and non-performing loan formation in both of these jurisdictions amid affordability constraints, as borrowers face higher interest rates and greater cost of living pressures.
“Loan restructuring arrangements .......
News 25 October 2023
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'Endgame' comment period extended
Market updates and sector developments
US federal bank regulatory agencies have extended the comment period for both the Basel Endgame risk-based regulatory capital proposal and the G-SIB surcharge proposal until 16 January 2024 (SCI 28 July). Comments on both proposals were originally due by 30 November, but the comment period has been extended to allow interested parties more time to analyse the issues .......
Market Moves 23 October 2023
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Job swaps weekly: Octagon elevates Lam to ceo
People moves and key promotions in securitisation
This week’s round-up of securitisation-related job swaps sees Octagon Credit Investors appointing senior portfolio manager Gretchen Lam as its new ceo. Elsewhere, structured finance lawyers Martin Bartlam and Elana Hahn have joined Xfinite Global and Fasken respectively.
The appointment of Lam as Octagon’s new ceo comes as the firm’s cofounder Andrew Gordon transitions into a new role as executive .......
Market Moves 20 October 2023
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Taking charge
NBFCs boost Indian securitisation issuance
The Indian securitisation market appears to have beaten the odds, with robust issuance volumes seen so far in 2023. This is despite concerns regarding the impact of the HDFC merger earlier this year (SCI 24 April).
“The market has been mostly unfazed by the merger,” states Nathan Menon, partner at Reed Smith. “It has noted it, but .......
News Analysis 20 October 2023
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New normal?
German house prices see surprise decline
Growth is not yet on the cards for German RMBS, as surprise house price declines hold little room for market expansion. Additionally, German banks continue to prefer covered bonds as a source of secured wholesale funding.
Against the backdrop of a resilient labour market throughout the mild recessionary environment in the primarily-exporting nation, the decline in house prices .......
News 18 October 2023
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US CLN market could reach US$220bn
Market updates and sector developments
JPMorgan securitised products research analysts estimate that the potential size of the US CLN market could amount to US$220bn, as banks become more comfortable with issuing the notes for capital relief purposes, following the Federal Reserve’s clarification of what defines a synthetic securitisation (SCI 29 September). Indeed, they suggest that the move may mark the beginning of a .......
Market Moves 16 October 2023
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Job swaps weekly: Fearon steps up at Arch
People moves and key promotions in securitisation
This week’s roundup of securitisation job swaps sees Arch Capital Group appoint a new ceo in its global mortgage group. Elsewhere, Gallagher Re has hired a new head of global credit and political risk, while Cushman & Wakefield has snapped up a Patterson Real Estate Advisory exec as md.
Arch Capital Group has promoted Seamus Fearon to ceo, international mortgage for the .......
Market Moves 13 October 2023
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Saying hi to HEI
Cara Newman, head of structured finance at Hometap, answers SCI's questions
Q: Hometap, the home equity investment (HEI) fintech, is expanding into the structured finance market (SCI 7 July). What are Hometap’s motivations behind entering the securitisation market, and why now?
The Structured Credit Interview 9 October 2023
A: For Hometap, it's always about supporting homeowners and fulfilling our mission on their behalf. We view a strong structured finance capability as an important avenue to the capital .......
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Rithm strengthens MSR capabilities
Market updates and sector developments
Rithm Capital has entered into a definitive agreement with Computershare to acquire Computershare Mortgage Services and certain affiliated companies, including Specialized Loan Servicing (SLS), for a purchase price of approximately US$720m. The acquisition includes approximately US$136bn in unpaid principal balance of mortgage servicing rights, of which US$85bn is third-party servicing, along with SLS’s origination services business. Following the close .......
Market Moves 6 October 2023
Job swaps weekly: HSBC snaps up former Deutsche Bank CLO head
People moves and key promotions in securitisation
This week’s roundup of securitisation job swaps sees a former head of CLOs at Deutsche Bank taking up a director role at HSBC. Elsewhere, CBRE has promoted a London-based executive md to president and coo in its Tokyo office, while SLC Management has appointed two new co-heads for its private fixed income team.
Deutsche Bank’s former head of CLOs, .......
Market Moves 6 October 2023
'Sluggish' September?
Quarterly SCI CRT data review
CRT issuance so far this year appears to have consistently tracked below that of last year’s volumes. In terms of deal count, SCI data shows that 39 transactions have closed in the year to end-September 2023, versus 52 for the corresponding period in 2022.
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News 4 October 2023