RMBS

Residential mortgage-backed securities, or RMBS, are bonds or notes created by securitisation that are backed by residential mortgages or residential real estate loans.
RMBS originators are typically financial institutions that originate residential real estate or residential mortgage loans, including banks, building societies/savings & loans and mortgage finance companies. However, issuers could also include government-guaranteed securities issued following bank bailouts, such as TARP or TALF, and the Government Sponsored Enterprises Fannie Mae and Freddie Mac. To create residential mortgage-backed securities, or RMBS, institutions sell pools of their loans to a special-purpose vehicle, or SPV, which then sells the loans to a trust. The trust then repackages the loans as interest-bearing securities and issues them. This true sale of the loans to the SPV ensures that the RMBS is treated as bankruptcy-remote from the originator. Many different types of assets back RMBS, including prime, non-conforming, sub-prime, Alt-A (or Alternative-A), buy-to-let and single-family rental (SFR) mortgages. The financial crisis caused residential mortgage valuations to plummet, leading to severe losses/defaults in many RMBS transactions (and ABS CDOs), as well as efforts to begin modifying loan documentation and indeed the creation of many credit/dislocation/distressed opportunity/recovery funds to take advantage of opportunities in the RMBS sector. Post-crisis, the Government Sponsored Enterprises Fannie Mae and Freddie Mac have developed a credit risk transfer market, comprising synthetic RMBS structures (whereby the risk is transferred via CDS tranches).

  • Job swaps weekly: BBB elevates two to co-chief banking officer

    People moves and key promotions in securitisation

    This week’s roundup of securitisation job swaps sees The British Business Bank appointing two co-chief banking officers. Meanwhile, Latham & Watkins has poached an experienced White & Case structured credit executive as partner, while Centralis Group has hired a new Ireland Country head.

    The British Business Bank has appointed Richard Bearman and Reinald de Monchy as co-chief banking .......

    Market Moves 22 November 2024

  • Variety rules in European ABS

    October saw strong momentum in the European and UK ABS and MBS markets, fuelled by diverse issuance

    European and UK ABS and MBS markets maintained momentum in October, building on the robust issuance pace set in September, according to monthly European and UK factsheets monitored by SCI.

    TwentyFour AM Momentum Bond Fund’s managers state that October witnessed over €17.5bn in ABS and €9.5bn in CLO issuance, pushing the YTD total to over €130bn. Both TwentyFour .......

    News 20 November 2024

  • Job swaps weekly: Senior Pemberton CLO exec launches Auctus Strategies

    People moves and key promotions in securitisation

    This week’s roundup of securitisation job swaps sees a former Pemberton Asset Management director launching her own sustainability consulting business. Meanwhile, Atlas SP has given its interim ceo the role on a permanent basis, while Climate First Bank has appointed a former 12five Capital veteran as president of its newly-created structured finance division.

    Ex-Pemberton Asset Management director Naomi .......

    Market Moves 15 November 2024

  • Job swaps weekly: Ogier snaps up Dublin-based partner

    People moves and key promotions in securitisation

    This week’s roundup of securitisation job swaps sees Ogier hiring a structured finance veteran from Matheson as partner in its Dublin office and promoting a real estate managing associate to partner in its Jersey practice. Meanwhile, Sidley has hired two long standing senior capital markets partners from Latham & Watkins, while Latham & Watkins has made a number of .......

    Market Moves 8 November 2024

  • M&G unveils €200m ABS fund

    Firm launches vehicle aimed at unlocking daily liquidity in high-grade securitised assets

    M&G’s structured credit team has launched the M&G Investment Grade ABS Fund, a new daily liquidity fund with an initial €200m investment from pension schemes and family offices. The fund seeks to capture value in the global securitisation market, focusing on high-quality, investment-grade assets backed by residential mortgages, consumer, corporate, and automotive loans.

    The fund’s strategy aligns with .......

    News 5 November 2024

  • Pre-judgment day ABS rush in Europe

    October sees strong European and UK ABS issuance ahead of US presidential election

    October ended with a surge in European and UK ABS and MBS issuance, with €3.5bn placed from seven deals in the final week of the month. This included €2bn of publicly marketed deals, bringing the total level of issuance for the month to €12bn.

    JPMorgan strategists note: "October’s primary activity underscores the strong demand for securitised products across .......

    News 4 November 2024

  • Job swaps weekly: Linklaters lures four A&O Shearman partners

    People moves and key promotions in securitisation

    This week’s roundup of securitisation job swaps sees Linklaters hiring four partners from A&O Shearman for its New York office. Elsewhere, the Prytania Solutions team has joined Houlihan Lokey’s structured products valuation advisory team as part of the latter’s acquisition of the former, while Danske Bank has snapped up a former senior Nordea executive as investment director.

    Linklaters .......

    Market Moves 1 November 2024

  • Job swaps weekly: Kirkland names two new partners

    People moves and key promotions in securitisation

    This week’s roundup of securitisation job swaps sees Kirkland & Ellis hiring two partners for its structured finance and structured private credit practice. Elsewhere, NPL Markets has made two senior appointments to its team, while Piper Sandler has named a new head of structured products trading.

    Kirkland & Ellis has hired Jared Axelrod and Suril Patel as partners .......

    Market Moves 25 October 2024

  • Teutonic tenacity

    German consumer ABS sees strong investor demand despite rising challenges

    Despite rising interest rates and escalating costs of living across Europe, the consumer ABS market shows little sign of distress. Issuance levels remain robust, with investors continuing to demonstrate confidence in this sector, even as economic conditions tighten. According to Sam Lee, portfolio manager at TwentyFour Asset Management, "there is no sign as yet of any impact on issuance .......

    News 24 October 2024

  • Optimisation optimism

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    Panellists at SCI’s 10th Annual Capital Relief Trades Seminar in London last week widely agreed that banks are set to ramp up their use of SRT transactions to optimise balance sheets and improve capital efficiency ahead of sweeping regulatory changes under Basel 4.

    "I expect further growth in SRTs as banks adjust to Basel 4, using these transactions .......

    Talking Point 24 October 2024

  • Summer in the city

    European ABS and CLO markets defy summer lull with €34bn Q3 issuance

    The European securitisation market saw significant activity through the third quarter of 2024, defying the typical summer slowdown, according to a market update issued by TwentyFour Asset Management.

    Aza Teeuwen, partner and portfolio manager at TwentyFour, attributes this to increased funding needs, tighter pricing and a rush to secure funding ahead of the upcoming US elections.

    "Volumes .......

    News Analysis 22 October 2024

  • Job swaps weekly: MidOcean boosts capital formation capabilities

    People moves and key promotions in securitisation

    This week’s roundup of securitisation job swaps sees MidOcean Partners strengthen its ranks with the appointment of Jon Fox as global head of capital formation. He brings several decades of leadership and alternative asset management experience that will help to expand the firm’s investor relationships globally.

    Fox was formerly president of Värde, having joined that firm nearly 11 .......

    Market Moves 18 October 2024

  • Job swaps weekly: KBRA rings the changes

    People moves and key promotions in securitisation

    This week’s roundup of securitisation job swaps sees KBRA making multiple senior structured finance appointments including a new global head of ABS and RMBS. Elsewhere, a c-suite executive at PACE Funding Group has left the firm and transitioned away from structured credit with a move to Greenday Finance, while specialty finance company Encina Lender Finance has made two senior .......

    Market Moves 11 October 2024

  • How does it end?

    Lawyers discuss how the US' Basel Endgame will be implemente...

    Despite the recent and potentially exponential growth of the US CRT market, regulatory clarity is still out of reach. So how will the Basel Endgame regulation be implemented and when can investors expect to see it?

    Recent re-proposals from the Federal Reserve (Fed) looking to reshape the regulation have already been rejected (SCI, 24 September) in a .......

    News Analysis 9 October 2024

  • Flexible financing

    Apollo warehouse loan facility rated

    Further details have emerged regarding the transaction at the core of the recent strategic financing collaboration between Apollo Global Management and BNP Paribas (SCI 27 September). The resultant borrower vehicle, AGF WHCO 2-A Trust, entered into a senior secured revolving loan facility collateralised by warehouse loan obligations originated by ATLAS SP.

    “This trade is very .......

    News 8 October 2024

  • Job swaps weekly: Blackstone lures two new partners

    People moves and key promotions in securitisation

    This week’s roundup of securitisation job swaps sees Blackstone adding two new partners to its infrastructure and asset-based credit platforms. Elsewhere, ING has hired an industry veteran as head of asset securitisation for wholesale banking in APAC, while Castlelake has strengthened its existing European leadership with the appointment of a new partner.

    Blackstone is expanding its infrastructure and .......

    Market Moves 4 October 2024

  • Different beats

    European ABS slows as Australian market surges, marking contrasting dynamics.

    ABS activity in Europe slowed during the final week of September, while Australia experienced a surge in issuance in the same period, according to figures issued by JP Morgan research strategists. While in Europe the slowdown offers a welcome breather after a hectic month, the acceleration in Australia highlights a sharp – although potentially temporary – contrast between the .......

    News 4 October 2024

  • Rating reverberations

    S&P's revised RMBS criteria and Fitch's growing infl...

    Recent updates to S&P's rating criteria in Australia are reshaping the landscape for RMBS, sparking discussions among Aussie investors about the evolving standards for credit ratings. As S&P aligns its regional methodology with its global framework, the implications for the structured finance market are becoming clearer.

    S&P's revised criteria, detailed in its report named Global Methodology and Assumptions: .......

    News Analysis 3 October 2024

  • Resilient tapestry

    Maddi Rowlatt at Challenger navigates the dynamic ABS and MB...

    The ABS and MBS landscape continues to be dynamic and resilient, supported by strong investor demand and favourable macroeconomic conditions. In this swiftly changing market, Maddi Rowlatt, portfolio manager overseeing UK, European, and US ABS at Challenger, closely monitors broader macroeconomic and geopolitical risks that could affect performance.

    With cautious optimism, she notes: “The market has benefited from .......

    News Analysis 27 September 2024

  • Job swaps weekly: Toorak and Merchants parent names new coo

    People moves and key promotions in securitisation

    This week’s roundup of securitisation job swaps sees Roemanu hire a former Finance of America Home Improvement president as its new coo. Elsewhere, Redding Ridge Asset Management has elevated a senior director to ceo in order to lead its CLO management businesses globally, while Cushman & Wakefield has appointed a co-head of EMEA equity, debt and structured finance.

    Market Moves 27 September 2024

  • Building on a niche

    Specialist lenders continue to drive growth in UK RMBS

    Specialist lenders in the UK are making good on their promises to serve the underserved while ramping up RMBS issuance – and are showing no signs of slowing down. Following the GFC, the speciality lending sector (SLS) redefined its approach to lending and – between the first transaction in 2016 and 2023 – the share of UK RMBS issuance .......

    News Analysis 26 September 2024
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