Investors
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Risk mitigation
Euro CLO wraps gaining traction
Assured Guaranty (Europe) SA this week closed a financial guarantee for a further European CLO, following the wraps it recently provided for the North Westerly V CLO and Tymon Park CLO deals (SCI 6 September). Financial guarantees are proving attractive to investors seeking to reduce regulatory capital consumption, both on existing exposures and new investments.
The latest .......
News Analysis 12 November 2021
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Sri Lanka eyes remittance securitisation
Sector developments and company hires
Sri Lanka eyes remittance securitisation
The government of Sri Lanka (GOSL) is requesting competitive proposals from banks and investors for consideration to be appointed as counterparts or arrangers for its proposed securitised financing arrangement (SFA). The arrangement would be backed by foreign currency receipts of the Central Bank of Sri Lanka (CBSL) under the mandatory sale of 10% of workers' .......
Market Moves 12 November 2021
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Hedges eyed
CPMs target post-pandemic concentration risks
The International Association of Credit Portfolio Managers (IACPM) has completed its 2021 Principles and Practices in CPM Survey. Conducted every other year, the survey focuses on five key areas of concern to its members, including the evolution of risk and credit portfolio management. The latest survey shows that CPM functions are increasingly concerned about concentration risks, following last year’s .......
News 12 November 2021
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Indian securitisation market presents challenges
The Indian structured finance market has been around for ove...
The market revolves around Indian banks' targets for lending to priority sectors. Banks have traditionally been the largest investors in securitised debt, as they need to fulfil the Indian central bank’s requirements to lend a target percentage of their loan books to priority sectors, which are defined by the central bank and include minorities, agriculture, SMEs and export industries. The .......
Talking Point 11 November 2021
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First LBR PCC investor signed
Sector developments and company hires
First LBR PCC investor signed
Lloyds has announced that Ontario Teachers’ Pension Plan Board will be the first investor to support underwriting through its multi-insurance SPV, London Bridge Risk (LBR) PCC. LBR was established in January of this year with sponsorship from Lloyds, with ambitions to create a market that invites new forms of capital and allow for easier access .......
Market Moves 10 November 2021
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Multi-currency CLO closed
Sector developments and company hires
Multi-currency CLO closed
Barclays has closed a multi-currency managed cashflow balance sheet CLO. Dubbed Duke Global Funding, the £4bn-equivalent transaction is backed by 519 senior secured and senior unsecured loans extended predominantly to large corporate obligors in Western Europe and the US. The underlying loans are denominated in US dollars, sterling and euro.In terms of geographical diversification, the initial portfolio .......
Market Moves 9 November 2021
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Hurdles ahead?
Dutch RMBS market continues to face challenges
The Dutch prime RMBS market received a boost last week with the announcement of Lloyds Bank’s STS-compliant Candide Financing 2021-1, after the issuer’s almost 10-year absence from the market (SCI 3 November). However, while the prime sector remains in the doldrums, the buy-to-let sector is also facing new regulatory challenges.
“Banks have been historically the main users of securitisation, .......
News Analysis 9 November 2021
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Evolving landscape
Consolidation, fintech driving banking evolution in Ireland and the UK
Consolidation among lenders and the proliferation of fintechs is driving change in the Irish and UK banking sectors. This Premium Content article investigates the impact on the jurisdictions’ RMBS markets.
The banking landscape in Ireland and the UK continues to evolve. Along with consolidation among lenders, the growing market share of fintech platforms is supporting dramatic changes in financial ......
News Analysis 9 November 2021
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Irish rebound
Second NPL securitisation marketing
Another Irish non-performing loan securitisation has hit the market less than a month after the Rathlin Residential 2021-1 RMBS priced (see SCI’s Euro ABS/MBS Deal Tracker). The move is in line with the expected growth and post-Covid recovery of the market in the second half of 2021 (SCI 23 July).
Dubbed Portman Square 2021-NPL1, the latest .......
News 8 November 2021
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US CLO equity outperforms
Sector developments and company hires
US CLO equity outperforms
US CLO Equity cashflows average 15.2% across 1,038 BSL transactions that have had four payment dates in 2021, according to a report from JPMorgan CLO research analysts. This is the highest since 2016, which averaged 19.6%.CLOs that were reset in 2021 fared best with a 22% average return driven in part by a small minority that .......
Market Moves 8 November 2021
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Fed set to reduce asset purchases
Sector developments and company hires
Fed set to reduce asset purchases
The New York Fed’s FOMC has increased the System Open Market Account (SOMA) holdings of Treasury securities by at least US$70bn per month and of agency MBS by at least US$35bn per month during the monthly purchase period beginning in mid-November. Additionally, SOMA holdings of Treasury securities will increase by at least US$60bn per .......
Market Moves 5 November 2021
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Servicers facing 'unprecedented' turnover
Sector developments and company hires
Servicers facing ‘unprecedented’ turnover
US commercial mortgage servicers are facing unprecedented turnover levels and filling open positions in the tight labour market may ultimately increase the cost of servicing loans, Fitch suggests. However, the agency notes that to date, there have not been any noted declines in servicing proficiency among Fitch-rated primary, master and special servicers.
Fitch reports lower-than-average employee .......
Market Moves 4 November 2021
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Restricted issuance
STS synthetic volumes to remain constrained
STS synthetic securitisation issuance has been growing since the final framework came into effect earlier in the year (SCI 4 August), as the new regime slashes risk weights on retained tranches, while new structures boost insurer interest by allowing them to execute STS-eligible funded deals. Nevertheless, STS synthetic origination will remain constrained, given the homogeneity and collateral requirements.
News Analysis 4 November 2021
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SLM EODs eyed
Sector developments and company hires
Fitch has downgraded from single-B to double-C the outstanding class A4 and B notes of SLM Student Loan Trust 2007-7, 2008-1 and 2008-4, due to the legal final maturity date of the class A4 notes being approximately three months away in January 2022 for SLM 2007-7 and 2008-1 and less than 10 months .......
Market Moves 2 November 2021
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Matryoshka doll?
Use of proceeds proving contentious for ESG securitisations
The EU taxonomy regulation and Sustainable Finance Disclosure Regulation (SFDR) are posing challenges for securitisation issuers and investors. For now, use of proceeds remains the most contentious issue.
Announced in late 2019, the European Green Deal reflects the EU’s ambitious bid to lead the world on climate action. The deal’s commitments became legally binding by the entry into .......
News Analysis 1 November 2021
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Positive prospects?
Legal changes open up Turkish NPL opportunities
Recent amendments to Turkish law potentially open doors to international investors seeking opportunities in the Turkish non-performing loan market. However, although activity could pick up in the unsecured space, questions remain about secured and lumpy pools.
Under the legislative changes, asset management companies (AMCs) may establish funds to issue ABS. Indeed, by doing so, AMCs have now been .......
News Analysis 29 October 2021
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Securitisation stamp duty eyed
Sector developments and company hires
Securitisation stamp duty eyed
Market Moves 29 October 2021
The UK government is introducing legislation within Finance Bill 2021-22 that provides a power to make stamp duty and stamp duty reserve tax (SDRT) changes relating to securitisations and ILS by secondary legislation. The power will be a freestanding provision and will allow HM Treasury to make regulations to provide that stamp duty or SDRT is .......
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Risk-sharing remit
CRT definitions discussed
Most practitioners agree that ‘risk-sharing transactions’ is the most appropriate moniker for capital relief trades, but there remains some divergence around the term. This CRT Premium Content article explores what it means for investors and issuers alike.
The term ‘risk-sharing transactions’ is becoming more common and more widely understood to denote capital relief trades, but divergences remain around what ......
News Analysis 29 October 2021Premium Content
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Still strong
European ABS/MBS market update
In a quieter week than of late, two full capital stack deals have been competing for investor attention in the European ABS/MBS primary market. Strong demand for both Pixel 2021 and SC Germany Consumer 2021-1 suggests that the market is still strong.
“I think both deals have been executed very well,” notes one ABS/MBS trader. “For SC Germany Consumer .......
News 28 October 2021
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New banking rules
Sector developments and company hires
The European Commission has adopted new EU banking rules under CRR 3 and CRD 4, with the aim of ensuring that EU banks become more resilient to potential future economic shocks, while contributing to Europe's recovery from the Covid-19 pandemic and the transition to climate neutrality. The Commission notes that while the overall level of capital .......
Market Moves 28 October 2021
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