Operations

  • BREP default an 'inflection point'?

    Sector developments and company hires

    BREP default an ‘inflection point’?
    A senior loan EOD has occurred in connection with Finnish single-loan CMBS FROSN-2018, after Blackstone Real Estate Partners failed to repay the loan on 1 March (SCI ABS Markets Daily - 2 March). The episode marks one of the first high-profile securitisation defaults of the current cycle.

    The FROSN-2018 loan had been granted .......

    Market Moves 6 March 2023

  • SRTx inaugural fixings released

    Index values project worsening conditions for CRTs

    The inaugural fixings for the SRTx (Significant Risk Transfer Index) have been released. The index values suggest that pricing volatility is rising and credit risk is worsening for US capital relief trades at a higher level than for European CRTs.

    Overall, both pricing volatility and SRT execution conditions are shown to be skewing higher for SME transactions in .......

    News 3 March 2023

  • Supreme Court grants CFPB petition

    Sector developments and company hires

    Supreme Court grants CFPB petition
    The US Supreme Court has granted the CFPB’s Petition for a Writ of Certiorari in the case of ‘CFPB v. Community Financial Services Association of America’ and denied the cross-petition filed by Community Financial Services Association of America (CFSAA). The CFPB’s petition asked the court to overturn the 19 October 2022 ruling by the US .......

    Market Moves 3 March 2023

  • Confidence and convenience

    Brian Bejile, founder and ceo of Octaura Holdings, answers SCI's questions

    Q: After launching the platform last year, Octaura reported the completion of its first fully electronic syndicated loan trade last month (SCI 2 February). What has Octaura been working on since then?
    A: Since we launched last June, we have covered a lot of ground. We have spent a lot of time recruiting and bringing people into the ranks, .......

    Provider Profile 1 March 2023

  • Direct lending platform unveiled

    Sector developments and company hires

    Direct lending platform unveiled
    Oaktree Capital Management has launched private credit-focused Oaktree Lending Partners (OLP) and its related vehicles. OLP is targeting US$10bn in equity commitments from institutional investors and will seek to originate senior secured loans of US$500m or more to private equity-owned US companies, typically with over US$100m in EBITDA.

    Oaktree believes this market is especially attractive .......

    Market Moves 28 February 2023

  • Lightning rod?

    Dealer incentives eyed in CAC complaint

    The CFPB and the New York State Office of the Attorney General (NYOAG) recently brought a lawsuit against subprime auto ABS issuer Credit Acceptance Corp (CAC) for “misrepresenting the cost of credit” and “hiding” costs in loan agreements. Unusually, the allegations centre on the company’s business model, which is unique among auto lenders.

    “Credit Acceptance is somewhat of .......

    News 28 February 2023

  • Independent considerations

    Daniel Drummer, cfo of German digital lender auxmoney, answers SCI's questions

    Q: auxmoney re-opened the European securitisation market with its third social bond issuance, Fortuna Consumer Loan ABS 2023-1. How does this latest deal compare to auxmoney’s first two ABS transactions?
    A: This is our third and largest securitisation at €350m, which directly follows our first securitisation in September 2021 at €250m and our second in May 2022 at €225m. Overall, .......

    Provider Profile 28 February 2023

  • FEAC promotes four in direct lending

    Sector developments and company hires

    FEAC promotes four in direct lending
    First Eagle Alternative Credit (FEAC) has promoted four members of its tradable credit and direct lending investment teams. Within the tradable credit team, Robert Hickey has been named deputy cio, reporting to FEAC cio James Fellows.

    Hickey joined the firm in 2004 and was formerly senior portfolio manager in the tradable credit team. .......

    Market Moves 22 February 2023

  • Highs, lows and CLOs

    John Kim, Panagram ceo and portfolio manager of CLOZ, answers SCI's questions

    Q: What can you tell us about the launch of Panagram’s new actively managed CLO ETF (CLOZ) (SCI 25 January)?
    A: We’re very excited about our ETF (CLOZ) because it brings CLO opportunity to the retail market. Ultimately, we are trying to make it easy for retail investors to enjoy the benefits of CLOs that institutional investors have enjoyed .......

    The Structured Credit Interview 17 February 2023

  • CLO portfolio management tie-up inked

    Sector developments and company hires

    CLO portfolio management tie-up inked
    S&P has partnered with LevPro to offer enhanced transparency and efficiency for CLO credit portfolio management in the US and Canada. Under the agreement, S&P Global Market Intelligence will combine LevPro’s SaaS-based trade order management systems (OMSs) with existing WSO loan administration capabilities to support customers in the CLO market.

    The LevPro platform provides .......

    Market Moves 16 February 2023

  • Backing blockchain

    Credit risk considered as DeFi eyed to fund real world assets

    Further efforts are underway to demystify the credit risk associated with DeFi securitisations as interest in its capability to finance real world assets (RWAs) grows (SCI 2 February). A new S&P report analysing the key credit and legal risk considerations associated with such transactions marks a further step by the rating agency to better understand the digital space, .......

    News 15 February 2023

  • Homogeneity RTS released for STS synthetics

    Sector developments and company hires

    Homogeneity RTS released for STS synthetics
    The EBA has published its final draft regulatory technical standards (RTS) setting out the conditions for the assessment of the homogeneity of underlying exposures in STS on-balance sheet securitisation pools. At the same time, the authority has extended the existing work on the RTS on homogeneity for both ABCP and non-ABCP securitisations to ensure .......

    Market Moves 14 February 2023

  • Incorporating climate risk

    Carbon accounting for CLOs examined

    Janus Henderson Investors has developed a bespoke methodology to estimate Scope 1 and 2 carbon emissions represented in secured loans and corporate credit exposures, which can then be applied to CLO portfolios. The benefits of understanding climate-related risks within portfolios include the ability to undertake carbon relative analysis, as well as guide corporate engagements regarding current and future decarbonisation .......

    News Analysis 13 February 2023

  • MK&C acquisition prompts CS carveout

    Sector developments and company hires

    MK&C acquisition prompts CS carveout
    Credit Suisse has progressed the carveout of CS First Boston as a distinct capital markets and advisory-led business (SCI 28 October 2022) through the acquisition of The Klein Group (MK&C), for a purchase price of US$175m. The seller will receive equity in CS First Boston in the form of a convertible note, while Michael .......

    Market Moves 10 February 2023

  • Status quo or status go?

    Law firm designation practices questioned

    Dissatisfaction is growing among private credit funds and direct lenders regarding the common practise of law firm designation, whereby sponsor counsel can choose which counsel advises the lenders. The concern is that such a scenario could force them into less favourable positions in negotiations over securitisation transactions.

    “The problem really is as simple as the private equity funds .......

    News Analysis 10 February 2023

  • SPG spin-out rebranded as ATLAS

    Sector developments and company hires

    SPG spin-out rebranded as ATLAS
    Apollo and Credit Suisse have completed a substantial first close of their previously announced transaction, under which affiliates of the former purchased a significant portion of the latter’s securitised products group (SCI 28 October 2022). A majority of the assets and professionals associated with the transaction are now part of or managed by the .......

    Market Moves 9 February 2023

  • Going green?

    ESG priorities shifting to meet macroeconomic pressures

    Inclusion of lower-income borrowers in US environmentally-linked ABS pools could increase this year, as lenders adapt to the changing needs of consumers amid rising macroeconomic stress. Nevertheless, rising solar and home improvement ABS volumes may not necessarily translate into a shift in focus between the ‘E’ and ‘S’ in ESG.

    The U$271.58m KBRA- and S&P-rated GoodLeap Sustainable Home .......

    News Analysis 9 February 2023

  • QT underway

    'Slight' tightening forecast for ECB-eligible ABS

    Rabobank credit strategists predict a drop of 45.8% in ECB reinvestments across all APP sub-programmes between March and June, equating to a potentially sizeable €1.5bn in redemptions not being reinvested, as the central bank embarks on its quantitative tightening programme. This figure is expected to rise to 80.7% in the second half of this year, given seasonality of redemptions .......

    News 8 February 2023

  • Alternatives combination agreed

    Sector developments and company hires

    Alternatives combination agreed
    FS Investments and Portfolio Advisors have entered into a definitive agreement to combine their firms. The move is set to see a joint growth in excess of their combined US$73bn in assets under management and a significant expansion to their resources - including a permanent capital base and a new distribution platform. As a combined company, the .......

    Market Moves 6 February 2023

  • Extension risk eyed

    Brookfield control would be 'positive' for ELoC 39

    High extension risk but low default risk is forecast for German multifamily CMBS Haus (European Loan Conduit No. 39). In its latest European Securitisation Weekly publication, BofA Global Research suggests that the transaction is behind its business plan and reliant on equity top-ups from the sponsors.

    “The assets and the loan have not deteriorated, in our view, but .......

    News 6 February 2023

  • Electronic loan trade completed

    Sector developments and company hires

    Electronic loan trade completed
    Octaura has completed its first entirely electronic syndicated loan trade. The news comes after the official launch of Octaura Holdings last year, which was founded with the intention to improve efficiency, liquidity and transparency in the CLO and syndicated loan trading processes (SCI 14 June 2022).

    At present, the US$1.5trn syndicated loan market functions .......

    Market Moves 2 February 2023
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