Operations
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Opportunity knocks
Debut RPL ABS could be first of many
The first publicly rated European unsecured reperforming loan ABS hit the market in April. With Covid-induced moratoriums limiting the supply of non-performing loans, further such transactions could emerge, as debt purchasers with excess liquidity seek to deploy capital.
Dubbed Wolf Receivables Financing, the transaction represents Lowell Financial’s debut public securitisation and is also the first UK RPL ABS .......
News Analysis 8 June 2022
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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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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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Slow and steady
Dutch auto ABS to remain stable as car ownership declines
Adoption of Mobility as a Service (MaaS) in the Netherlands could lead to the end of individual car ownership for the country’s residents. At present, Dutch auto ABS only represents 1% of the total European auto ABS market, so the impact of this shift is likely to be marginal overall. Nevertheless, concentration risk and residual value risk remain important .......
News Analysis 27 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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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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Stonehill announces leadership additions
Sector developments and company hires
Stonehill is set to expand its commercial lending business with four new senior executive hires to its leadership team. Daniel Siegel, Greg Koenig, Nisu Mehta, and Taylor Pike each join Stonehill from Ardent with several decades of real estate business shared between them. The firm hopes the new hires will assist in widening its product offering across all real estate .......
Market Moves 19 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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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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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
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ICE to acquire Black Knight
Sector developments and company hires
Intercontinental Exchange (ICE) is set to acquire the software, data, and analytics company, Black Knight. Unanimously agreed by the boards of both companies, the definitive agreement to acquire Black Knight would help boost Intercontinental Exchange’s rapidly expanding mortgage technology business. Black Knight is valued by the cash and stock transaction to hold a market value of US$13.1bn, which translates to US$85 per .......
Market Moves 5 May 2022
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Warehouse woes?
Turnkey solution offered amid labour shortages
US mortgage warehouse lenders face an increasing competitive landscape, with labour shortages posing an additional challenge. Against this backdrop, turnkey solutions could help lenders scale their businesses.
“The mortgage warehouse financing competitive landscape is increasing. The workplace environment is also evolving; many employees are looking for remote or hybrid working arrangements. Our clients have noted that it is .......
News 5 May 2022
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More multifamily
Workforce housing in focus amid affordability crisis
Increased focus by Fannie Mae and Freddie Mac on targeted affordable housing appears to be yielding powerful results among both borrowers and lenders. Addressing supply issues requires the development of new properties, as well as renovating the existing stock, however.
A significant issue in the US affordable housing crisis is supply, especially at the lowest income levels. For .......
News Analysis 4 May 2022
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Consolidation considerations
CLO manager acquisition activity set to continue
CLO manager consolidation is expected to continue, following a marked rise in acquisition activity in Q1 this year. However, the trend could be challenging for new entrants going forward and potentially increase exposure to obligor overlap risk.
“I think a lot of it is pent-up demand from the pandemic,” explains Russ Thomas, a director in US structured finance at Fitch. .......
News Analysis 3 May 2022
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A buyer's market
European ABS/MBS market update
Following a flurry of deal announcements (SCI 22 April 2022), the primary European and UK ABS/MBS markets were extensively testing investor demand during the week. With so many deals to absorb, deal performance has been disparate.
In a context of large volumes of paper, UK RMBS transactions were playing a central role with four transactions hitting the market. On .......
News Analysis 29 April 2022
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The Importance of ESG in credit ratings
Matthew Mitchell, senior director at S&P Global Ratings, explains why ESG is becoming an increasingly important factor when it comes to credit ratings of all types
That is why S&P Global Ratings recently announced it will publish ESG credit indicators for structured finance transactions to increase the transparency of how these factors influence its credit rating analysis. The ESG credit indicators .......
Talking Point 26 April 2022