ABS
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Greek GACS?
Greek government considering asset protection scheme
The Greek government is considering the creation of an asset protection scheme as part of the state’s non-performing loan reduction strategy. The scheme will involve state guarantees on bonds issued by SPVs, rendering it similar to the Italian GACS guarantee.
Market sources note that the proposed Greek scheme can only work if the guarantee covers both the senior .......
News Analysis 12 October 2018
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Risk transfer round-up - 12 October
CRT sector developments and deal news
Deutsche Bank is believed to be prepping a trade finance transaction from its TRAFIN risk transfer programme for 4Q18. The rumoured deal would be the German lender’s first TRAFIN deal in three years and follows two issuances in June from the GATE and CRAFT programme (see SCI’s capital relief trades database).
...... News 12 October 2018Premium Content
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Secondary ticking up
European securitisation market update
A handful of BWICs are out for the bid today as activity in the European ABS secondary market picks up. Of note, the SILVA 2017-1UK A auto bond – with an original size of £80.8m - is set to be auctioned at 2pm London time today.
“Auto ABS is holding up quite firm and the sector is .......
Market Reports 12 October 2018
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Disparity highlighted
Flood ILS impact gauged
The damage from Hurricane Florence was estimated by Moody’s to be between US$38bn-US$50bn, with 474,000 mortgaged properties affected. However, the only catastrophe bond that was impacted as the hurricane dissipated was the US$500m FloodSmart Re Series 2018-1, a national flood insurance bond issued in July by FEMA via a Hannover Re facility.
Morton Lane, president of Lane Financial, .......
News Analysis 11 October 2018
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Primary surge
European ABS primary market update
European primary ABS activity is finally picking up. The PBD Germany Auto ABS transaction is expected to price either tomorrow or Wednesday, while the latest RMAC RMBS has grabbed the spotlight.
“The market is much busier this week than it was last week,” one trader confirms. “The secondary market is still quiet, but primary has picked up a .......
Market Reports 8 October 2018
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Market moves - 5 October
New hires and company developments in the structured finance sector
Europe
Apollo Global Management has named Brigitte Posch md, head of emerging markets in London. She was previously global head of emerging markets corporate credit at Barings Asset Management.
Reed Smith has hired Kevin-Paul Deveau as a partner to its financial industry group in London. Deveau joins from Dechert and will focus on advising lenders, general partners, ......
Market Moves 5 October 2018Premium Content
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Risk transfer round-up - 5 October
CRT sector developments and deal news
BNP Paribas is rumoured to be readying a replacement trade for a risk transfer transaction that it completed in 2016. Dubbed Resonance II, it references a €5bn portfolio of corporate loans (see SCI’s capital relief trades database).
Dutch pension fund PGGM made a second loss investment in the 2016 deal. The new transaction is expected to close in ......
News 5 October 2018Premium Content
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Heavy supply?
European primary ABS market update
A new RMAC UK non-conforming RMBS has been announced, while the BPCE Home Loans 2018 deal is expected to be sized at almost €1bn. Ford’s latest German Globaldrive auto deal is also attracting some attention in the European primary ABS market.
“The RMAC 2 deal will set the tone for the European ABS market going forward,” says one .......
Market Reports 5 October 2018
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Regulatory boost
Positive prospects for project finance CRTs
Santander has completed Fitzroy 2018-1 CLO, a financial guarantee and significant risk transfer transaction that references a £1.12bn portfolio of UK project finance loans. Regulatory clarity over acceptable structures could pave the way for further project finance CRT issuance in the future.
Fitzroy is Santander’s second project finance transaction in two years, following Renew Project Finance CLO 2017-1 .......
News Analysis 3 October 2018
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ABS lull
European ABS primary market update
The European ABS primary market is seeing a lull in activity, which is leaving some traders uncertain as to what the final quarter of the year will bring.
“I’m seeing a little bit of primary market activity, mostly dealer to dealer or seller to dealer,” says one trader. “It’s pretty quiet; I’m not really sure why.”
The .......
Market Reports 3 October 2018
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Market moves - 28 September
The latest hires and company developments in the structured finance market
Canadian pension partnership
Canada Pension Plan Investment Board (CPPIB) announced today that its wholly-owned subsidiary, CPPIB Credit Investments, is broadening its portfolio through new investments in equity tranches of CLOs alongside experienced CLO asset managers. CPPIB Credit’s initial partnership in CLO equity investing will be with Sound Point Capital Management based in New York. CPPIB Credit will invest US$285mn in a .......
Market Moves 28 September 2018
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Primary focus
European ABS and RMBS market update
Few BWICs were out for the bid in the European secondary ABS market this week, with light trading activity due to the high volume of selling seen during the summer.
“The Tower Bridge RMBS print moved the market a bit wider, but now spreads are tightening again,” says one trader. “The Tower Bridge senior notes priced at 120bp .......
Market Reports 28 September 2018
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Risk transfer round-up - 28 September
CRT sector developments and deal news
Santander is believed to be the third capital relief trade issuer readying a commercial real estate transaction in 4Q18, along with Lloyds and RBS.
The lender’s last CRE risk transfer deal was issued in December 2017. Dubbed Red 1 Finance CLO 2017-1, the £87.1m financial guarantee referenced a £916.8m UK CRE portfolio.
The transaction printed alongside two other debut ......
News 28 September 2018Premium Content
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Risk transfer return
Standard Chartered completes trade finance CRT
Standard Chartered has printed its first capital relief trade in three years, dubbed Trade Finance Transaction 2018-1. The bank’s last public trade was a US$135m corporate CLN called Baruntse, which was completed in 2015 (see SCI’s capital relief trades database). It also rolled the Shangren III (Trade Finance) into a new deal in June.
Rated by Moody’s, .......
News 27 September 2018
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UCITS constrained
Regulatory impact on mutual fund demand gauged
The impact of the new EU securitisation regulation on mutual funds domiciled in Europe has sparked concern among some US market participants in recent weeks. An estimated 15% of US ABS issued since the beginning of 2017 is believed to satisfy European risk retention requirements and the inclusion of UCITS funds, in particular, under the legislation could constrain demand .......
News Analysis 27 September 2018
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US CMBS 'not fixed'
Wave of CMBS litigation may arise from systemic sector problems
US CMBS litigation is currently in the spotlight, with one of the largest ever US fraud investigations looking at a potential conspiracy by employees of Morgan Management (SCI 8 June) to fraudulently obtain US$167.5m of loans, some of which back a number of CMBS transactions. Unfortunately, cases such as these may only become more frequent, with a range of .......
News Analysis 26 September 2018
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CRT line-up finalised
SCI seminar to assess regulatory threats and opportunities
The line-up for SCI’s 4th Annual Capital Relief Trades Seminar – taking place on 16 October at One Bishops Square, London – has been finalised. With Basel 4 impacting all approaches to the calculation of risk-weighted assets, credit institutions are being forced to optimise their portfolios once again. A major theme of the event is therefore how market participants .......
News 25 September 2018
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Market moves - 21 September
All the latest company developments and new hires in the structured finance sector
Acquisitions
HPS Investment Partners has acquired Tålamod Asset Management. HPS will retain Tålamod's investment team and other employees based in Dallas, while Andersen Fisher, founder and managing member of Tålamod, will join HPS as md. Kyle Mapes and Jay Steen will join HPS as executive directors, after joining Tålamod in 2008. All employees of Tålamod will become HPS employees .......
Market Moves 21 September 2018
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GACS expansion?
UTP extension questioned
The recent extension of the GACS guarantee scheme is expected to further fuel Italian non-performing loan securitisation issuance (SCI 5 September). However, the programme is unlikely to be expanded to cover unlikely-to-pay (UTP) loans, due to political constraints.
Following the European Commission’s approval of the GACS extension, Scope reaffirmed its forecast of a total disposal of Italian .......
News Analysis 21 September 2018
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Irish RMBS focus
European ABS market update
A rare Irish non-conforming RMBS has caught the attention of European ABS market participants, following the deal’s roadshow last week.
“The Dublin Bay Securities senior notes are being talked at around 65bp, with the deal expected to price soon,” says a trader. “In comparison, proper prime senior RMBS paper would typically price at around 12bp or 13bp.”
Market Reports 18 September 2018
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Revised NPL templates published
Insolvency data rendered more dynamic
The EBA last week published a revised version of its standardised non-performing loan data templates - first published in December (SCI 15 December 2017) - that aim to facilitate NPL sale transactions across the EU. The crux of the changes is a more dynamic and granular recording of insolvency proceedings in an attempt to capture their complex and .......
News Analysis 17 September 2018