Investors
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Open house
European CRE lending continues to diversify
A combination of growth in specialist lenders and the tightening of commercial real estate lending standards triggered by the Covid-19 pandemic represents an opportunity for European securitisation investors. In particular, CRE ABS deals offer a significant premium and momentum over more traditional CMBS transactions from well-established sponsors.
“Against a backdrop of record CMBS issuance, I feel that a .......
News Analysis 8 June 2022
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Landmark Hong Kong cat bond closed
Sector developments and company hires
Peak Re has closed a US$150m 144a catastrophe bond via Black Kite Re, marking the first-ever such deal issued by a Hong Kong special purpose insurer. The cat bond is also expected to be the first to utilise the Pilot Insurance-linked Securities Grant Scheme introduced by the Hong Kong government last year (SCI 4 May 2021).
As part of .......
Market Moves 7 June 2022
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Goodbye convention?
Demand for inclusive credit scoring intensifies
Institutional investors have joined the charge of securitisation professionals demanding more inclusive credit scoring methodologies, following the SFA’s call for the use of alternative credit scores amid enduring concerns over the wealth inequality gap in the US (SCI 6 April). A new study, commissioned by VantageScore Solutions and conducted by FTI Consulting, finds that institutional investors also desire more .......
News 6 June 2022
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MidOcean bags PE bigwig
Sector developments and company hires
Erik Oken has joined MidOcean Partners as chairman of its private equity business, based in New York. He will work directly with the firm’s private equity investment team, with the aim of adding valuable senior insights and oversight to its thematic investment approach. Prior to joining MidOcean, Oken spent over 30 years at JPMorgan, most recently serving as global .......
Market Moves 1 June 2022
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Franklin Templeton to acquire Alcentra from BNY Mellon
Sector developments and company hires
Franklin Templeton is set to acquire the European credit and private debt manager, Alcentra, from BNY Mellon. The acquisition of Alcentra and its US$38bn in assets under management will see the expansion of Franklin Templeton’s US alternative credit specialist investment manager, Benefit Street Partners, and ramping up of its presence and capabilities in Europe. The transaction will increase the size of .......
Market Moves 31 May 2022
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Fit for purpose?
ESAs urged to revive securitisation market
AFME and Paris Europlace have jointly called for the European Commission and co-legislators to step up efforts to finalise the European securitisation framework and make it “fit for purpose”. The move follows a High-Level Forum, which took place today (31 May), organised by the two associations to discuss the role that securitisation can play in helping to meet Europe’s .......
News 31 May 2022
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El Clásico?
Groundbreaking AV bond closes
CVC Capital Partners has closed an innovative hybrid transaction backed primarily by revenues from audio-visual (AV) rights commercialised by La Liga, the organisation that runs the top two divisions of professional football in Spain. Dubbed Loarre Investments, the deal represents the first-ever European bond used to finance a leading sports league.
Late last year, Spanish football clubs voted .......
News 26 May 2022
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Portfolio progress
Business model rethink continues apace
The trend of banks rationalising their business models continues apace across Europe. This Premium Content article explores the role of securitisation in their portfolio optimisation efforts.
The need for banks to fundamentally rethink their business models emerged post-financial crisis and continues still across Europe. Beyond disposals of non-performing assets, this entails focusing on core strategies and markets, .......
News Analysis 25 May 2022
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Retail woes
Euro CMBS divergence continues
A new Scope Ratings report shows that European commercial real estate valuations have generally increased across the board. However, challenges remain in the retail and hospitality sectors, with valuers continuing to take a bearish outlook on the sector.
The analysis of 69 publicly-rated securitised CRE loans issued since 2017 reveals that - with the exception of retail properties .......
News Analysis 25 May 2022
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Office sector concerns
The return to work has brought arguably more uncertainty than the initial transition to working from home, explains Steve Jellinek, head of CMBS research at DBRS Morningstar.
Uncertainty remains a key theme as corporate occupiers look to assess their current portfolios against their future office requirements. They must accommodate everyone who could be present in the building at any given time and .......
Talking Point 25 May 2022
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Arnold & Porter hires new partner
Sector developments and company hires
Arnold & Porter welcomes a new partner to its corporate and finance practice in New York in a move to bolster its offering to lenders and borrowers. Scott Berson joins the firm from Norton Rose Fulbright, with more than 25 years of experience across both secured and unsecured financings. Berson holds expertise on receivables-based transactions across different industries and products .......
Market Moves 24 May 2022
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Climate countdown
Green SRT challenges highlighted
A green synthetic securitisation framework remains lacking, despite the current regulatory focus on ESG. This Premium Content article explores why.
Green lending targets in use-of-proceeds synthetic securitisations are expected to become more of an obligation going forward, but such a change should be accompanied by clear parameters and consequences for failing to satisfy that obligation. Nevertheless, a framework for ......
News Analysis 20 May 2022Premium Content
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Accelerating change
NPL ABS evolution gathers pace
Regulatory change in the European non-performing loan securitisation market has picked up speed over the last month, with the publication of the EBA’s final draft risk retention regulatory technical standards (RTS) (SCI 13 April) and the launch of an EBA consultation on draft implementing technical standards (ITS) in connection with NPL data templates (SCI 17 May). However, .......
News Analysis 19 May 2022
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Juicy CRT
Historical wides entice fast money
Spread levels in GSE CRT securities at the bottom end of the capital stack are now so cheap relative to comparable ABS assets that they are attracting attention from hedge fund and private equity money, say analysts.
Five-year B2 notes are currently priced close to 1100bp over SOFR, more than twice the levels at which high yield ABS .......
News Analysis 18 May 2022
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Principles-based cybersecurity approach urged
Sector developments and company hires
The SFA has responded to the US SEC’s proposed new rules to enhance and standardise disclosures made by public companies regarding cybersecurity risk management, strategy, governance and incident reporting. The association believes the proposed rule to be focused almost exclusively on corporate registrants, ignoring the extensive fundamental and technical differences between the potential impact of cybersecurity risks and incidents .......
Market Moves 17 May 2022
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Transportation investment platform founded
Sector developments and company hires
Onex has established a new platform focused on investing in transportation-related assets used for land, air, marine and industrial applications. The strategy will involve investments in hard assets with long lives, contractual cashflows and an element of inflation protection.
The firm has recruited Wes Dick to lead the strategy as md and head of Onex Transportation Partners, based in San .......
Market Moves 16 May 2022
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Accountability required
Further transparency needed for ESG CLOs
CLOs are said to be the perfect vehicle for ESG selection criteria, due to the nature of the asset class. However, calls for further transparency continue.
“We are seeing every manager committed to apply ESG to every transaction – which means they need to comply to strict reporting. Since last year, we have seen deals coming in with positive screening, as .......
News Analysis 16 May 2022
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New path
Mexican securitisation marks firsts for StepStone
Global private markets firm StepStone has structured a US$102.5m public offering of a securitised portfolio of direct loans via Certificados Bursátiles Fiduciarios on Mexico’s BIVA stock exchange earlier this year. Significantly, the transaction represents the first securitisation in Mexico of a portfolio of direct loans granted to North American companies, as well as the first time that StepStone acted .......
News 16 May 2022
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Better bid
REO online auctions gaining traction
The three most active US CMBS special servicers sold 125 commercial real estate assets via online auctions in 2020 and 2021, with sale proceeds on average achieving 103% of the most recent appraised value and 122% of the minimum reserve price, according to a new Fitch study. The findings show that assets sold in 2021 on average achieved 109% .......
News 12 May 2022
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'Investor-friendly' features introduced
Sector developments and company hires
Rising interest rates and widening spreads have spurred changes in US non-prime RMBS structures that introduce investor-friendly features for senior noteholders, Fitch reports. The move comes amid growing concern over coupon cap shortfalls and lower availability of excess spread.
As such, many issuers have reduced the aggregate servicing fee to 25bp (which historically has been 50bp), while some have introduced .......
Market Moves 11 May 2022
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Servicer strategies
BNPL affordability dynamic eyed
The rapid growth of the buy now, pay later (BNPL) sector (SCI 25 March), coupled with heightened costs of living, is altering the affordability dynamic within existing RMBS portfolios. Against this backdrop, investors are being encouraged to question servicers about their strategies for BNPL schemes.
“From a securitisation point of view, there aren’t huge issuances at the moment - and .......
News 10 May 2022