Investors
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'Transformational' merger agreed
Market updates and sector developments
Rithm Capital is set to acquire Sculptor Capital Management in a transaction valued at approximately US$639m, which includes US$11.15 per Class A share of Sculptor. This transaction will leverage Sculptor’s US$34bn of AUM with Rithm’s US$7bn of permanent equity capital and US$30bn-plus balance sheet to create what the firm describes as a “world-class” asset management business.
Sculptor’s investment .......
Market Moves 26 July 2023
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Less punitive
Halving of p-factor sparks SRT optimism
The European Council’s finalisation of the Basel 3 reforms last month has sparked renewed optimism across the European capital relief trades market, with news of an agreement to halve the punitive p-factor (SCI 28 June). The impending need to address the adverse effects of the output floor had been at the core of the regulatory debate for synthetic .......
News 25 July 2023
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Obra adds CLO issuance capabilities
Market updates and sector developments
Obra Capital has acquired the assets of asset management and investment research firm KDP and its affiliated companies. The transaction supports Obra’s expansion of its existing liquid markets capabilities in structured credit into the fundamental credit space. By combining KDP’s established research with Obra’s diversified asset management capabilities, the firm expects to augment its product suite to include the .......
Market Moves 21 July 2023
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Barings and Lakemore partner up
Market updates and sector developments
Charlotte-headquartered global asset manager Barings has entered into a partnership with CLO-focused private credit investor Lakemore Partners. Lakemore, which primarily takes super-majority control equity positions in new US CLOs, says the partnership will expand its global reach, deepen its institutional client base and boost its Aquatine CLO equity platform.
Barings has around US$351bn in assets under management, spanning public equities and fixed .......
Market Moves 20 July 2023
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SRT boom
IACPM data shows record year for synthetic securitisations
The global volume of synthetic securitisation issuance reached its highest ever level in 2022, with both the number of trades and notional pool size far outstripping pre-pandemic levels, according to the latest IACPM survey. The results suggest that 90 significant risk transfer trades were executed last year with an aggregate underlying pool size at inception of €199bn, surpassing previous .......
News 11 July 2023
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Embracing 'enablement'
Begum Gursoy, global technical head, debt capital markets an...
Q: Sustainalytics supports investors develop and implement responsible investment strategies, including by providing second-party opinions (SPOs) on whether a green, social or sustainability bond framework is aligned to market expectations. Could you outline the steps involved in assigning an SPO to an ESG securitisation?
Provider Profile 10 July 2023
A: The overarching function of an SPO provider is to have a holistic view of the .......
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Generali inks Conning acquisition
Market updates and sector developments
Generali Investment Holdings (GIH) is set to acquire Conning and its affiliates, with the aim of enhancing the long-term growth plans of both companies. Conning will continue to execute its growth strategies with support from the company’s current owner, Cathay Life Insurance Co, and Generali.
Conning and its affiliates will continue to operate independently under their current management .......
Market Moves 10 July 2023
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Out of office
European, US CMBS headwinds diverging?
The office CMBS market is grappling with headwinds brought about by declining occupancy rates and rising costs of borrowing. However, as this Premium Content article finds, the European CRE market may not be as badly affected as its US counterpart.
Rising delinquency rates and falling office occupancies are a cause for concern among CMBS market participants. However, there ......
News Analysis 6 July 2023
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EIB, ICO support Spanish SMEs
Market updates and sector developments
The EIB Group and Instituto de Crédito Oficial (ICO) have invested in senior and mezzanine tranches of ABS issued by BBVA to support Spanish SMEs and mid-caps by addressing their working capital and liquidity requirements. Proceeds worth €60m will also be channelled into energy efficiency projects.
Under the transaction, the EIB makes an investment commitment of €430m, while €30m .......
Market Moves 5 July 2023
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Changing agenda
UK RMBS evolving alongside borrowers' needs
The return of 100% mortgages and the rise of later-life lenders herald an evolving UK RMBS landscape. This Premium Content article investigates how mortgage borrowers’ changing needs are being addressed.
The UK RMBS landscape is set to evolve in the coming years as new mortgage products emerge. Indeed, the return of 100% LTV mortgages and the rise ......
News Analysis 5 July 2023
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Popularity contest
Life insurers clash over CLO capital charges
US life insurer investment in CLOs has grown by about 20% each year over the last decade, with CLOs now accounting for between 3% and 4% of general account investments in the sector and more than 10% for a handful of the top-30 US life insurers. Indeed, the US Fed estimates that life insurers own 20% of the US .......
News 3 July 2023
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Job swaps weekly: US Modular Capital lures Transwestern veteran
People moves and key promotions in securitisation
Job swaps weekly: US Modular Capital lures Transwestern veteran
This week’s securitisation job swaps have seen an industry veteran leave her role as head of structured finance at Transwestern to take up a new C-suite position at US Modular Capital. Elsewhere, US Bank has named a successor to Stephen Philipson as head of commercial products, while Barclays, Winston & Strawn and .......
Market Moves 30 June 2023
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Mezz opportunities
Pretium structured credit and CLO liabilities MD Ian Wolkoff...
US CLO mezzanine debt offers high expected return rates, with yields maintained under a default scenario more extreme than the GFC credit cycle and with upside potential in a market recovery scenario.
CLO debt offers strong long-run expected returns with bounded downside
Talking Point 28 June 2023
In the current market context, macro uncertainty and the potential for a growth downturn loom large while .......
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SCI In Conversation: Terry Lanson, Seer Capital
We discuss the hottest topics in securitisation today
In this latest episode of our SCI In Conversation podcast, Terry Lanson, a managing director at Seer Capital and an established luminary in the regulatory capital relief trade market, discusses the prospects for further growth and development of the SRT market in the US. Although this is well-trod ground, Terry believes that, in the wake of the failure of several .......
News 27 June 2023
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Inflexion point
SRT market takes off despite regulatory turbulence
The SRT market is experiencing strong growth with both issuers and investors increasing their focus on the space, according to panellists at the 27th Annual Global ABS conference in Barcelona. However, despite strong European activity there remains a significant amount of uncertainty as the market grapples with regulatory changes surrounding Basel 4.
Credit Agricole CIB has noted significant .......
News Analysis 26 June 2023
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UBP launches new fixed income fund
Sector developments and company hires
Union Bancaire Privée (UBP), the Geneva-headquartered private bank, has launched a new fixed-income strategy spanning high-yield bonds, subordinated debt and securitised credit. The fund, named UBAM Strategic Income, will seek a double-B rating risk profile and target an average return of 7% per annum across its lifespan.
UBAM Strategic Income, which will invest in CLOs in addition to .......
Market Moves 20 June 2023
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FCA urged to address 'regulatory redundancies'
Sector developments and company hires
FCA urged to address ‘regulatory redundancies’
Market Moves 15 June 2023
The Managed Funds Association (MFA) has submitted a letter to the UK FCA, proposing improvements to the country’s regulatory framework for securitisations that would expand capital investment in the UK and optimise risk management on behalf of UK investors. The letter encourages the FCA to “address regulatory redundancies” and enhance compatibility with the rules .......
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Walker steps up to global credit head
Sector developments and company hires
Walker steps up to global credit head
Aon has established a new global credit team structure within its Reinsurance Solutions unit, appointing Ben Walker as head of global credit. The global credit team now combines Reinsurance Solutions’ existing mortgage, trade credit, structured credit and political risk and surety businesses to form one global function.The aim is to facilitate .......
Market Moves 14 June 2023
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Compliance issues
'Compelling case' for reform of Article 5
A new AFME report finds that investors are likely to interpret ambiguous provisions under Article 5 of the Securitisation Regulation in the EU and UK conservatively - and, in doing so, will assume disproportionately high costs to the business. The report identifies key challenges relating to compliance with investor due-diligence requirements and suggests potential strategies to overcome them.
News 14 June 2023
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Preventative intervention
UTP management gaining traction
The Italian non-performing loan ABS market remains subdued, with publicly-placed issuance drying up after the expiration of the GACS scheme in June 2022 and performance so far this year generally below expectations. While securitisation has played a central role in de-risking Italian banks’ exposure to NPLs, they now appear to be refocusing on avoiding the classification of borrowers as .......
News Analysis 14 June 2023
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Manager tiering
Japanese demand driving dispersion?
The US CLO market continues to be characterised by dispersion (SCI 24 May). In this context, secondary double-B paper appears to be competing well against new issue equity.
“The biggest headwind CLO managers face is dispersion right now, particularly in the triple-As, because that makes up such a large part of the capital stack. We are seeing .......
News 9 June 2023