ABS
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Risk transfer round-up - 7 September
CRT sector developments and deal news
Caixabank is rumoured to be prepping an SME significant risk transfer transaction for 4Q18. This would follow a bilateral SME trade that the issuer is believed to have completed in July.
The Spanish bank’s last confirmed transaction was Gaudi Synthetic 2015-1. The deal - inked in February 2016 - was a €121.5m CLN referencing a €2bn Spanish SME ......
News 7 September 2018Premium Content
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Chain reaction
ABS issuers exploring distributed ledger technology
Numerous ABS issuers are exploring how to leverage blockchain technology to execute traditional securitisation structures. Indeed, its adoption could yield immediate benefits for esoteric and new asset classes, which have an illiquidity premium associated with them.
For traditional assets that are not natively digital, distributed ledger (i.e. blockchain) technology can enable a digital representation – or ‘token’ – .......
News Analysis 7 September 2018
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Increased obligations weighed
ESMA outlines expanded reporting requirements
ESMA last month published final draft technical standards on the new reporting requirements to be implemented under the Securitisation Regulation (SCI 24 August). The standards - released ahead of the 1 January deadline - are set to usher in new levels of due diligence required on the part of the seller, meaning investors will expect more information to .......
News Analysis 6 September 2018
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Finding the efficient frontier
Dominik Hagedorn, co-founder at Tangency Capital, answers SCI's questions
Q: How and when did Tangency Capital become involved in the ILS market?
The Structured Credit Interview 6 September 2018
A: Tangency Capital was launched in the autumn of 2017 by Michael Jedraszak, Kai Morgenstern and me, with the aim of offering institutional investors access to natural catastrophe risk akin to how reinsurers access the market and beyond what traditional ILS funds offer. Following an initial set-up .......
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GACS extended
European Commission approves guarantee extension
The European Commission has approved a second extension of the GACS guarantee scheme for the senior tranches of Italian non-performing loan securitisations. The guarantee is issued at a market price to comply with EU state aid rules, although the European Commission will continue to review the scheme’s compatibility with market conditions. Consequently, further extensions of the scheme remain the .......
News Analysis 5 September 2018
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SME SRT completed
Intesa taps Italian government guarantee fund
Intesa Sanpaolo has completed a guarantee agreement with Fondo Centrale di Garanzia, the Italian government guarantee fund, to spur economic growth via lending to Italian SMEs. This is the fund’s first synthetic securitisation that includes mid-cap firms (with up to 499 employees), which were previously excluded from its portfolio policies.
Under the agreement, Intesa Sanpaolo will ramp up .......
News 3 September 2018
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Chinese online ABS develops
Regulation, data inconsistencies hamper industry
Fitch recently rated its first ever ABS backed by Chinese online consumer loans, in the form of the CNY1bn JD ABN 2018-1 transaction. While a positive signal for the sector, it still faces a number of hurdles, such as a lack of credit history data across the Chinese population and an inconsistent regulatory framework.
While the term marketplace lending .......
News Analysis 3 September 2018
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Market moves - 31 August
The latest hires and company developments in the structured finance market
Acquisition
Moody’s Corp is set to acquire all outstanding shares of Reis in an all-cash transaction valued at approximately US$278m. By combining Reis’s extensive data with Moody’s Analytics’ specialised capabilities, the firm aims to enhance analytical practices in the CRE market and contribute to the efficiency and liquidity of capital flows. Under the terms of the merger agreement, .......
Market Moves 31 August 2018
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Risk transfer round-up - 31 August
CRT sector developments and deal news
Lloyds is rumoured to be readying another commercial real estate risk transfer trade from its Wetherby programme for 4Q18. This would be the issuer’s second post-crisis synthetic CRE deal, following the issuance of Wetherby Securities 2017 last year.
Wetherby Securities 2017 was a £47.1m financial guarantee referencing a £672.9m portfolio of UK CRE. It printed alongside two other ......
News 31 August 2018Premium Content
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Market moves - 24 August
The week's structured finance hires and company developments, all in one place.
Consent solicitation
NN Bank has issued a consent solicitation seeking investor approval for the early redemption of the Hypenn 3 Dutch RMBS, of which the class A1 tranche has already been redeemed. The class A2 tranche has an outstanding balance of €467m and a FORD of 17 June 2020, according to Rabobank credit analysts. Together with Hypenn 3, NN Bank’s Arena 2014-2 .......
Market Moves 24 August 2018
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Firms favour floating rate
Investors find value in range of SF asset classes
US investors are seeing relative value in a number of pre- and post-crisis securitised asset classes, including non-agency legacy RMBS, TruPS CDOs and US BSL CLOs. While firms’ allocations to different sectors may vary, the overriding theme is a move away from fixed rate products, with further interest rate rises expected.
As a result, floating rate products are of growing .......
News Analysis 22 August 2018
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Market moves - 17 August
Company developments and new hires in the structured finance sector
Acquisitions
Vistra has completed the acquisition of the corporate services business of Deutsche Bank’s global transaction banking division. The corporate services business will now be rebranded under the Vistra umbrella. The acquisition broadens the company’s presence in seven of the existing locations across Europe, the Cayman Islands and Mauritius, providing further scale and expertise in these jurisdictions and involves management .......
Market Moves 17 August 2018
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Moral hazard addressed
EIF completes SRT with BP Bari
The EIF has completed a guarantee agreement with Banca Popolare di Bari under the SME Initiative for Italy. The transaction consists of a number of structural features designed to reduce moral hazard.
According to Sebastian Dietzsch, associate director at Scope: “The loss claims under the guarantee are based on an expected loss calculation, which minimises cashflows between BP .......
News 17 August 2018
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Risk transfer round-up - 17 August
CRT sector developments and deal news
UBI Banca is believed to be marketing its second-ever capital relief trade. The Italian bank’s inaugural risk transfer transaction, dubbed UBI 2017 RegCap1 and inked last year, was a €100m deal referencing a €1.9bn Italian corporate portfolio (see SCI’s capital relief trades database).
...... News 17 August 2018Premium Content
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SMEs supported
Supranationals driving new credit ecosystem
A new ecosystem is gaining traction in the securitisation market, with supranational institutions stimulating organic origination by non-bank lenders. By facilitating the flow of credit and acting as a bridge to the capital markets, the prevalence of their activity – especially in the SME sector – is creating a new sub-category of transactions.
Supranational institutions are a key .......
News Analysis 16 August 2018
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Integrated fund structure developed
Innovative, single structure could benefit ILS investors
A new fund structure has been devised, which combines the fund and insurance elements of ILS structuring and investment. Dubbed the “fund of one”, it aims to simplify the ILS investment process by aggregating the disparate jurisdictional and regulatory requirements that currently hamper the ILS sector.
Mark Helyar, of counsel at Bedell Cristin, says the structure has been developed due .......
News Analysis 15 August 2018
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Market moves - 10 August
Company developments and new hires in the structured finance sector
CDOs transferred
Dock Street Capital Management has replaced Deerfield Capital Management as collateral manager of the Knollwood CDO and Mid Ocean CBO 2001-1 transactions. Moody’s has confirmed that the move will not impact its ratings on any of the notes issued by the issuers. For more CDO manager transfers, see SCI’s database.Effective 2 August, Highland Capital Management .......
News 10 August 2018
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Risk transfer round-up - 10 August
CRT sector developments and deal news
Banco Comercial Portugues is believed to be prepping a significant risk transfer deal for 4Q18. According to SCI’s capital relief trades database, the Portuguese lender’s last deals were Caravela SME No. 4 and Caravela SME No. 3 in May 2014 and June 2013 respectively.
Barclays is also rumoured to be working on another Colonnade deal for 4Q18, referencing UK ......
News 10 August 2018Premium Content
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Retention questioned
Call for NPL regulatory differentiation
Questions are emerging over the relevance of risk retention in the context of European non-performing loan securitisations. Given its utility in transferring risk on capital-intensive portfolios, securitisation could play a greater role in resolving Europe’s troubled loan burden if there was regulatory differentiation for such assets.
Vertical risk retention may make sense in terms of originating banks being .......
News Analysis 7 August 2018
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CRT resilience highlighted
Investors undeterred by turn in credit cycle
Widening credit spreads and an expected turn in the credit cycle have not induced significant changes in the structuring of capital relief trades, thanks to the positive performance of the asset class. Indeed, investors continue to allocate more capital to the sector.
“QE ends soon and tightening will start next year. However, Euribor is quite low. It will take a .......
News Analysis 6 August 2018
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Market moves - 3 August
Company developments and new hires in the structured finance sector
Acquisitions
News 3 August 2018
Savills Investment Management is set to acquire a 25% interest in DRC Capital. In addition, the partners of DRC have granted Savills Investment Management a call option to acquire the remaining 75% interest in DRC on the third anniversary of the completion of the initial transaction. Dale Lattanzio, ceo and managing partner of DRC, will join the board of Savills .......