Whole business securitisations
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Brand value
WBS issuer differentiation highlighted
In an unsolicited comment, Fitch last week suggested that the overall benefits of US whole business securitisation are often overstated, especially considering the increase in market activity and sectoral breadth seen this year (SCI 9 December). However, with the understanding that not every issuer is created equal, good relative value opportunities can still be found across the sector.
While .......
News Analysis 16 December 2019
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Core qualities
Caroline Chen, svp and research analyst at Income Research &...
Q: How and when did Income Research & Management become involved in the securitisation market?
The Structured Credit Interview 9 December 2019
A: Income Research & Management is a privately-owned fixed income investment manager that serves institutional and private clients. The firm is headquartered in Boston and was founded in 1987 by managing principals John Sommers and Jack Sommers. Originally a credit-oriented manager, IR+M has been involved in .......
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Alternative appetite
Euro CMBS specialist property exposure to rise
Appetite for European CMBS secured by specialist or alternative assets is expected to grow in 2020, as the sector becomes less niche. Such properties are characterised by their operating nature, with the availability of alternative operators being a key driver in their assessment.
Stephen Hughes, avp - analyst at Moody’s, notes that there are two main factors driving increased appetite .......
News 6 December 2019
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Counterintuitive results
EBA consultation incentivises unfunded SRT format
The EBA’s consultation on the determination of the weighted average maturity of a securitisation tranche (SCI 2 August) is seen as a positive step for synthetic securitisations, since it takes into account the conditional payments of the underlying assets. However, by not recognising the effect of prepayments and pool amortisations, the proposal creates counterintuitive results that incentivise banks .......
News Analysis 23 August 2019
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Whole biz debut double
Early learning, pet supply franchises securitised
Two US whole business securitisations are marketing, representing debut transactions from both firms. The deals comprise the US$250m Primrose Funding 2019-1, from an early childcare education company and the second is a US$355m ABS dubbed PSP Funding 2019-1, from a company that provides pet supplies.
Primrose Funding 2019-1 comprises US$10m class A1 notes and US$265m class Bs, both provisionally rated .......
News 6 August 2019
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New deals surge
Quarterly SCI data update
2Q19 saw a surge in new issuance volume across securitisation markets either side of the Atlantic. The second quarter typically sees an uptick over the previous quarter (SCI 11 April 2019), but this year's boost in European volumes was a reflection of greater regulatory certainty as the new STS rules bedded in and pent-up supply met pent-up demand.
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News Analysis 10 July 2019
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BWIC boom
Quarterly SCI data update
The first quarter of a year is usually quieter than the previous quarter and, for the most part, 1Q19 saw reduced activity over 4Q18 (SCI 24 January 2019). The notable exception was CLO secondary markets, where BWIC volumes boomed for the second quarter in a row, according to SCI data.
....... News Analysis 11 April 2019
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New fund for CDS recruit
Company hires and sector developments
ABL acquisition
Market Moves 28 February 2019
Benefit Street Partners affiliate Business Development Corporation of America has acquired a controlling interest in asset-based lender Siena Capital Finance from Solaia Capital Advisors. Siena was founded in 2012 by an ABL team backed by Solaia consisting of professionals from Bank of Ireland subsidiary Burdale Capital Finance. Siena will operate independently as a portfolio company of BDCA, with .......
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Long goodbye
First non-Libor linked ABS anticipated
Lloyds became the first bank to issue a benchmark covered bond tied to the sterling overnight index average (SONIA) in September. The move has sparked predictions that the first securitisations tied to alternative reference rates will emerge next year.
Libor is set to be phased out from 2021 and it remains unclear what will replace it as a .......
News Analysis 20 November 2018
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CLOs in demand
Quarterly SCI data update
Analysis of SCI's databases underlines the significant demand for CLO paper seen in 3Q18, in both primary and secondary markets. Meanwhile, a bias towards Northern European jurisdictions is evident in capital relief trade volumes.
.......
News Analysis 23 October 2018
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Fight for control eyed
Rapid amortisation event 'unlikely' to occur
Allegations of embezzlement and a fight for control of Harley Marine Services (HMS) have emerged less than two months after the firm closed its first whole business securitisation, Harley Marine Financing Series 2018-1 (see SCI’s primary issuance database). The legal battle has sparked concern that should a manager termination event occur, the US$455m transaction will enter rapid amortisation.
News 20 July 2018
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Esoterics shine in 2017
The US esoteric ABS market has gone from strength to strength in 2017, as investors gained comfort with less vanilla assets in a continued hunt for yield. Whole business and aviation ABS have been notable highlights, with both segments seeing record issuance levels this year.
Aviation ABS activity has seen steady growth for the last five years. Evan Wallach, president of Global .......
News Analysis 20 December 2017
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Trustee role rewritten by court?
A ruling by the UK High Court could have significant implications for trustees, potentially redefining their role in securitisation. The court's ruling confirms that a trustee cannot outsource decision making and must take responsibility for exercising the discretion that deal documents allow them, although questions do remain.
GLAS Trust Corporation was brought into the Fairhold Securitisation (FHSL 2006-1) as a .......
News Analysis 29 September 2017
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Whole business maturity wall eyed
US whole business securitisation issuance was robust in 1H17, with US$5.1bn priced across seven issuers (see SCI's primary issuance database), up by 84% year-over-year and on pace to break the record US$7.2bn issued in 2015. However, risks to the sector have increased marginally, given a looming maturity wall and declining growth across the restaurant industry.
Many well-known restaurant .......
News 28 July 2017
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Whole business ABS prepped
Jimmy John's is in the market with its debut whole business securitisation. The US$850m ABS is backed by royalties from 2,627 Jimmy John's franchises and 63 company-owned restaurants, representing 97.7% and 2.3% of system-wide locations respectively.
KBRA has assigned provisional ratings of triple-B to all of the notes, which comprise the US$50m class A1s, U$400m A2Is and US$400m A2IIs. An .......
News 20 June 2017
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Five Guys taps ABS appetite
Five Guys Enterprises has become the latest company to bring a whole business securitisation. The US$440m Five Guys Funding transaction is secured by most of its revenue-generating assets in the US and Canada.
The collateral includes existing and future domestic franchise agreements, existing and future company-operated restaurant royalties, US and Canadian intellectual property and related license agreements, collections from company-operated .......
News 11 May 2017
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Channel Tunnel refinancing underway
Groupe Eurotunnel is set to refinance its Channel Link Enterprises Finance (CLEF) whole business securitisation, as part of an ongoing strategy to optimise the structure of its debt and to reduce the cost of its debt service. The company proposes to issue up to €2bn-equivalent senior subordinated variable and fixed-rate notes, split across a number of tranches due in 2050.
News 10 May 2017
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Coinstar ABS debuts
Coinstar is marketing its inaugural US$900m whole business securitisation. Coinstar Funding Series 2017-1 is backed by revenue generated from a multi-national network of fully automated self-service coin counting machines.
KBRA has assigned provisional ratings of triple-B to the deal's US$60m class A1
News 20 April 2017
and US$840m class A2 notes. The anticipated repayment date is April 2022, while the legal final maturity date is .......
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Innovative franchise ABS marketing
Focus Brands is readying a US$800m whole business securitisation. Focus Brands Funding Series 2017-1 is backed by royalties from 5,055 restaurant franchises within the Focus restaurant system and 80 company-operated restaurants.
The 5,055 franchises represent 98.4% of the company's total system-wide locations, while the 80 company-operated restaurants account for the remainder. The majority of the locations (76%) are spread across .......
News 10 March 2017
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TGI Friday's taps market
TGI Friday's is in the market with a US$450m whole business securitisation. Dubbed TGIF Funding, the transaction is backed by royalties from 849 franchise locations and 54 company-operated restaurants.
The deal comprises US$50m class A1 notes and US$400m class A2 notes, both provisionally rated BBB/BBB- by KBRA and S&P. Barclays is sole structuring advisor and book-runner, while FTI Consulting is .......
News 9 February 2017
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Punch purchase proceeds
Patron Capital has purchased 63.31 million of ordinary shares in Punch Taverns at 180 pence per share through Vine Acquisitions, the bidco set up with Heineken UK to acquire Punch Securitisation A (SCI 22 December 2016). The shares became available after Emerald Investment Partners withdrew its rival offer for the pub operator last week.
The share purchase represents approximately 28.5% .......
News 8 February 2017