Operations
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Mission possible
Securitisation critical to UKAR success
UK Asset Resolution (UKAR) last month completed its final asset sale (SCI 26 February), marking the end of over a decade of state ownership of Bradford & Bingley (B&B) and Northern Rock Asset Management (NRAM) that saw the vast majority of the two lenders’ legacy mortgage loans securitised across 13 transactions. Indeed, without a functioning securitisation market, these assets .......
News Analysis 30 March 2021
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Equity return boost touted
Sector developments and company hires
Equity return boost touted
US CLO equity is poised to deliver double-digit returns to investors this year, paring back the underperformance seen over the past four years, according to new research from Bank of America.Analysts at the bank base their expectations on the fact that CLO equity market prices continue to lag, despite CLO NAV and interest distributions .......
Market Moves 29 March 2021
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Flexible financing
Alternative auto ABS structures eyed
Due to the digitalisation of the auto finance industry, many buyers of vehicles are able to start and complete their purchases online, which is driving a switch from vehicle ownership to usage. Accelerated by the impact of the coronavirus pandemic, these changes could pave the way for alternative structural features in auto ABS.
New auto finance products have .......
News Analysis 26 March 2021
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CLO pricing service selected
Sector developments and company hires
CLO pricing service selected
SCI Valuations has been selected by Bloomberg’s Enterprise Data business to provide daily CLO debt pricing to integrate with Bloomberg’s Liquidity Assessment (LQA) tool. The integration of this data with LQA will enable Bloomberg customers to more effectively and easily view and manage their portfolios, the companies say.SCI Valuations provides automated valuations for US .......
Market Moves 25 March 2021
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Corporate failures
Default study sheds light on governance
Governance failures have been shown to be a contributing factor in a large percentage of corporate defaults, according to a new study. Nevertheless, economic downturns remain the driving factor for most defaults.
According to a new Fitch study, economic downturns are the driving factor for most corporate defaults. However, in the observed period, weaknesses in governance were also .......
News 25 March 2021
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Securitisation tax consultation underway
Sector developments and company hires
Securitisation tax consultation underway
The UK HMRC has launched a consultation seeking views on the taxation of securitisation companies. The UK government says it has identified - through ongoing dialogue with the industry - areas where it may be beneficial to make changes to such tax regulations and is therefore keen to explore the associated benefits and potential difficulties.Market Moves 24 March 2021
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Red Cross in humanitarian cat bond first
Sector developments and company hires
Red Cross in humanitarian cat bond first
Market Moves 23 March 2021
The first-ever humanitarian catastrophe bond covering pure volcanic eruption risk has been completed using a Guernsey ILS structure. Sponsored by the Danish Red Cross, the US$3m issuance was privately placed by Replexus and Howden Capital Markets via Dunant Re IC, an incorporated cell of Replexus ICC (Guernsey), which is managed in Guernsey by .......
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CLO fallback language reviewed
Sector developments and company hires
CLO fallback language reviewed
S&P has reviewed the indentures of the 870 CLOs it rates to assess Libor fallback language governing a transaction's liabilities. The majority (76%) of its rated CLO transactions closed between 2018 and 2020.ARRC-like fallback language can be found in 26% of the agency’s overall transactions, including 76% of the transactions that closed in 2020. .......
Market Moves 22 March 2021
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Landmark NPL ABS inked
Banca Ifis completes salary assignment securitisation
Banca Ifis has finalised a securitisation backed by a €1.3bn non-performing loan portfolio in gross book value terms. The transaction is the first Italian NPL ABS to be secured directly by salary and pension assignment loans.
Rated by Moody’s and Scope, the transaction consists of €158.7m A2/A- rated class Ax notes, €206.2m A2/A- rated class Ay notes, €74.4m B2/B+ rated class .......
News 22 March 2021
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Assessing arrears
Withdrawal of UK support measures eyed
Most UK residential mortgage borrowers who took coronavirus-related payment holidays in 2020 have restarted payments. Indeed, performance data for UK RMBS master trusts shows that prime mortgage arrears did not increase after payment holidays ended in 2H20.
During 4Q20, early-stage mortgage arrears for UK prime RMBS master trusts averaged 0.49%, which is lower than pre-pandemic arrears and unchanged .......
News 22 March 2021
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The Collins catalyst
Dodd-Frank amendment could provide tipping point for US CRTs
The take-off of the US capital relief trades market has been predicted for several years. This CRT Premium Content article explores whether the increasingly onerous impact of the Collins Amendment could provide the tipping point.
This amendment to the 2010 Dodd-Frank Act, named after Senator Susan Collins of Maine, requires US banks that are entitled to use their own ......
News Analysis 22 March 2021Premium Content
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MPL acquisition to accelerate auto financing
Sector developments and company hires
MPL acquisition to accelerate auto financing
Market Moves 19 March 2021
Upstart Holdings is set to acquire Prodigy Software, a provider of cloud-based automotive retail software. Upstart says it is seeking to reduce the cost of auto financing by creating a modern multi-channel purchase experience. Auto retail is among the largest buy-now-pay-later opportunities, according to the firm, and together with Prodigy it aims to help .......
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Record breakers?
Chart-topping CRT issuance volumes anticipated
The capital relief trades market is set to break issuance records in 2021 after a challenging 2020, as banks seek ways to improve their return on equity and following pent-up issuance from last year. In this CRT Premium Content article, we examine the conditions that the coronavirus crisis has laid out for a surge in risk transfer volumes this ......
News Analysis 19 March 2021Premium Content
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Chip shortages 'credit positive' for auto ABS
Sector developments and company hires
Chip shortages ‘credit positive’ for auto ABS
Market Moves 18 March 2021
Sizable auto production cuts due to semiconductor shortages in the US will provide support for used vehicle values, a credit positive for securitisations and captive auto finance companies, according to Moody’s. The rating agency notes that such shortages – which are expected to last at least into next quarter - could result in North .......
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Legislative hoops
Multiple layers of regulatory assent hinders US CRT development
Texas Capital Bank confirmed last week that it sought approval from three different US regulators before selling its debut capital relief trade (SCI 12 March). For many banks, this process represents a deterrent to issuance.
The OCC, the US Fed and the FDIC all had to give the thumbs up to TCDI before it felt able to .......
News Analysis 17 March 2021
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Performance indicators
Footfall data, CMBS spread correlation highlighted
Advan Research Corporation plans to create more sophisticated applications, such as bond calculators, for US CMBS market participants over the next three to six months. The move follows the release of the firm’s CMBS foot traffic counts data product last month (SCI 27 February).
“Our focus at present is on integrating the data with client modelling processes .......
News 16 March 2021
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'Unprecedented' Moroccan CRT closed
Sector developments and company hires
‘Unprecedented’ Moroccan CRT closed
Market Moves 16 March 2021
Moroccan fertiliser giant OCP Group has subscribed to the notes issued by the first synthetic securitisation in Morocco. The transaction involved the establishment of a collective securitisation vehicle dubbed Fonds Damane Tamayouz, which has been structured to facilitate access to credit for the suppliers that make up OCP's industrial ecosystem.
Clifford Chance, which advised on the deal, .......
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