Operations
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RTS pending
SRT regulatory uncertainty persists
The regulatory technical standards (RTS) pertaining to the EBA’s final report on significant risk transfer that were expected to be published in June have been postponed indefinitely. The RTS focus on the paper’s onerous excess spread provisions, although market participants have been equally concerned about the proposed SRT tests that could be incorporated into the CRR. Indeed, both the .......
News Analysis 22 October 2021
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Rare agricultural MBS prints
Sector developments and company hires
Rare agricultural MBS prints
Market Moves 20 October 2021
The Federal Agricultural Mortgage Corporation (Farmer Mac) – a federally chartered corporation that provides a secondary market for a variety of loans made to borrowers in rural America, with the aim of increasing the availability and affordability of credit - has completed a US$302.7m securitisation of agricultural mortgage loans. The FARM Series 2021-1 agricultural MBS is backed by .......
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Project Frontier securitisation inked
Sector developments and company hires
Project Frontier securitisation inked
Market Moves 19 October 2021
National Bank of Greece (NBG) has entered into a definitive agreement with a consortium consisting of affiliates of Bain Capital Credit, Fortress Investment Group and doValue Greece, for the sale of 95% of the mezzanine and junior notes issued via a securitisation backed by a portfolio of non-performing exposures (NPEs) with a total gross book value of .......
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Big bang?
Tokenisation touted as a replacement for securitisation
Tokenisation is being touted as a potential replacement for securitisation, given its many applications and benefits. However, a number of challenges remain before the technology can be fully adopted by the market.
News Analysis 14 October 2021
“Tokenisation could replace securitisation – but it won’t be a big bang. However, when you see the speed of digitisation in some areas, you see it has the .......
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Beyond Covid-19: What effect has the pandemic had on the European RMBS and mortgage markets?
Andrew South, md, structured finance and Alastair Bigley, se...
The Covid-19 pandemic has provided a novel test of European RMBS credit performance, which the sector looks set to pass with flying colors. As virus-related social restrictions led to an economic shutdown and mortgage lenders introduced unprecedented borrower forbearance schemes, RMBS investors seemed to be at risk of taking a hit.
Mortgage payment holidays posed a potential liquidity .......
Talking Point 14 October 2021
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Transitional financing
Adam Zausmer, chief credit officer at Ready Capital, answers SCI's questions
Q: Why do you feel the US CRE CLO sector is booming?
The Structured Credit Interview 14 October 2021
A: The bridge lending market is certainly red hot at the moment. We tend to focus on less volatile assets, like multifamily, and clear trends we see across the US are tired properties in need of capital expenditure as well as a shortage of quality affordable housing. Non-bank .......
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Challenging valuations
Covid-19 aftermath dogs NPL exposures
The aftermath of the coronavirus crisis is hindering the valuation of properties that back European non-performing loan transactions. Nevertheless, collections have picked up and more NPL ABS issuance is expected.
According to Moody’s, the deterioration in the quality of the valuation of properties underlying securitised exposures in new trades can be ‘’explained by the increased difficulty in carrying .......
News 14 October 2021
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US insurer CLO exposure 'relatively small'
Sector developments and company hires
US insurer CLO exposure ‘relatively small’
Market Moves 8 October 2021
The NAIC has released stress testing results on US insurers' exposure to CLOs, as of year-end 2020. The stress tests examined the resilience of CLOs under three different scenarios and mirrors findings from the year-end 2019 stress test, wherein normal CLO single-A rated tranches experienced losses under the worst-case scenario. In comparison, .......
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Landmark guarantee inked
ThinCats and BBB seal agreement
The British Business Bank and alternative lender ThinCats have finalised a guarantee agreement via the former’s ENABLE Guarantee programme. The guarantee will provide up to £300m of additional funding for UK SMEs and midcaps. The transaction features a warehouse facility provided by Citi and it is the first under the ENABLE programme to facilitate lending to smaller businesses from .......
News Analysis 8 October 2021
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Green light
Record second-hand car prices fuel RV opportunities
Rising used car prices are positive for auto ABS transactions with exposure to residual values (RVs). Indeed, opportunities could emerge for deals with RV risk to outperform rating agency assumptions, which could – in turn – lead to rating upgrades.
Car values usually start depreciating as soon as they leave forecourts, but figures from Auto Trader - an automotive advertising .......
News Analysis 7 October 2021
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Chopra on the march
CFPB to expand its role and come down harder on securitisation
The securtisation market will see a more aggressive CFPB under the leadership of recently appointed director Rohit Chopra, with “more frequent enforcements and bigger fines,” according to Rachel Rodman, a partner with Cadwalader, Wickersham and Taft.
Rodman was speaking yesterday (5 October) at the annual SFA conference in Las Vegas on a panel addressing the future of housing .......
News 6 October 2021
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Untapped markets
French NPLs gaining attention
Southern European jurisdictions continue to witness strong activity in the non-performing loan space, especially in Greece and Cyprus. At the same time, investor interest in French NPLs is on the rise.
“Investors are looking further afield for opportunities in such markets where others aren’t necessarily looking. They are exploring opportunities everywhere that they can,” observes Amo Chahal, md .......
News 6 October 2021
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What is the future for US office space?
Steve Jellinek, head of CMBS research at DBRS Morningstar, e...
On a national level, the US office market is likely to see a rebound from the coronavirus pandemic-induced recession, even as net absorption has underperformed and construction remains elevated. The amount of sub-leasable space continues to shrink, declines in vacancy were seen in some major metropolitan areas in 2Q21, and office-using employment continues to grow amid the reopening economy.
Talking Point 5 October 2021
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CRT crush
Mayer Brown working with 'many' imminent issuers
Mayer Brown is currently working on “many” US private label capital relief trades which will “come to fruition” in the near future, according to partner Carol Hitselberger. She was speaking yesterday (4 October) at the Structured Finance Association (SFA) annual conference in Las Vegas.
Two US regionals – Texas Capital Bank and Western Alliance Bancorporation – have issued .......
News Analysis 5 October 2021
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CIFC, TRS launch leveraged loan partnership
Sector developments and company hires
CIFC, TRS launch leveraged loan partnership
Market Moves 4 October 2021
Teacher Retirement System of Texas (TRS) and CIFC Asset Management have established a new leveraged loan investment fund platform known as Texas Debt Capital (TDC). A CIFC affiliate is the general partner and investment manager of TDC, while TRS is the anchor investor limited partner and has committed significant equity to the fund. The .......
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Capitalising Mobility-as-a-Service
SDG Investments partner Stefan Bund and senior structurer To...
The trade-off between urbanisation, individualisation and sustainability has led to the emergence of new business models around individual and micro-mobility. New mobility providers enter the market and shape the urban landscape with their cars, mopeds, bicycles and scooters.
To cover the associated capital requirements, they need financing solutions that are as sustainable as the business models themselves. This offers the .......
Talking Point 4 October 2021
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Dual-currency debut
Rare European CRE CLO prepped
Starz Realty Capital has mandated leads for a rare European dual-currency static CRE CLO named Starz Mortgage Securities 2021-1 (see SCI’s Euro ABS/MBS Deal Tracker). The transaction has no reinvestment ability but allows the issuer to modify performing loans, as well as sell credit risk and defaulted assets, and it also features note protection tests.
The transaction .......
News 1 October 2021
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Lack of clarity
Positive signs for Indian ABS, but challenges remain
The Indian ABS market has demonstrated resilience during the Covid-19 pandemic. However, going forward, the lack of a central data depository and secondary market poses challenges to the growth of securitisation in this jurisdiction.
“The Indian securitisation market has crossed 30 years of existence – since then we have come a long way. The Indian market has grown .......
News 1 October 2021
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Synthetic Libor settings confirmed
Sector developments and company hires
Synthetic Libor settings confirmed
Market Moves 29 September 2021
The UK FCA has confirmed that to avoid disruption to legacy contracts that reference the one-, three- and six-month sterling and Japanese yen Libor settings, it will require ICE Benchmark Administration to publish these settings under a 'synthetic' methodology, based on term risk-free rates, for the duration of 2022. However, these six Libor settings will be .......