ABS
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Wheels down
Aviation ABS wobbles after Covid/Russia war
The airline industry is thriving at the moment with high fares and impressive passenger numbers, yet the aviation ABS market is finding it very difficult to dig itself out of the hole dug by the events of the last few years, according to a new study by rating agency KBRA.
These include, pre-eminently, the collapse of airline traffic during successive global lockdowns .......
News Analysis 13 July 2023
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SRT boom
IACPM data shows record year for synthetic securitisations
The global volume of synthetic securitisation issuance reached its highest ever level in 2022, with both the number of trades and notional pool size far outstripping pre-pandemic levels, according to the latest IACPM survey. The results suggest that 90 significant risk transfer trades were executed last year with an aggregate underlying pool size at inception of €199bn, surpassing previous .......
News 11 July 2023
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Capital rising
Regulators announce new rules coming soon
As expected, US regulators are poised to increase capital requirements for domestic banks imminently, according to a speech yesterday (July 10) made by Michael Barr, vice chair of supervision at the Federal Reserve, at the Bipartisan Policy Center in Washington, DC.
Large banks, described as those with over US$100bn in assets, could be asked to hold an extra 2% of capital .......
News 11 July 2023
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Embracing 'enablement'
Begum Gursoy, global technical head, debt capital markets an...
Q: Sustainalytics supports investors develop and implement responsible investment strategies, including by providing second-party opinions (SPOs) on whether a green, social or sustainability bond framework is aligned to market expectations. Could you outline the steps involved in assigning an SPO to an ESG securitisation?
Provider Profile 10 July 2023
A: The overarching function of an SPO provider is to have a holistic view of the .......
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Generali inks Conning acquisition
Market updates and sector developments
Generali Investment Holdings (GIH) is set to acquire Conning and its affiliates, with the aim of enhancing the long-term growth plans of both companies. Conning will continue to execute its growth strategies with support from the company’s current owner, Cathay Life Insurance Co, and Generali.
Conning and its affiliates will continue to operate independently under their current management .......
Market Moves 10 July 2023
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Latest SRTx fixings released
Improved tone continues in July index values
The latest fixings for the SRTx (Significant Risk Transfer Index) have been released. The improved tone seen across the sub-indexes in June’s fixings (SCI 2 June) generally appears to have continued, as market conditions stabilise following March’s banking volatility.
Indeed, the overall improved values for the SRTx Liquidity Indexes and SRTx Volatility Indexes suggest that issues across .......
News 7 July 2023
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Job swaps weekly: Succession at Oaktree
People moves and key promotions in securitisation
This week’s securitisation job swaps have seen Oaktree Capital Management announce the retirement of ceo Jay Wintrob and a succession plan that sees three senior executives stepping onto its executive committee. Elsewhere, Deutsche Bank has appointed a new CLO implementation head, while Moody’s welcomes back a structured finance professional after a two-and-a-half-year stint with BFF Banking.
Oaktree ceo Wintrob will retire in .......
Market Moves 7 July 2023
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EIB, ICO support Spanish SMEs
Market updates and sector developments
The EIB Group and Instituto de Crédito Oficial (ICO) have invested in senior and mezzanine tranches of ABS issued by BBVA to support Spanish SMEs and mid-caps by addressing their working capital and liquidity requirements. Proceeds worth €60m will also be channelled into energy efficiency projects.
Under the transaction, the EIB makes an investment commitment of €430m, while €30m .......
Market Moves 5 July 2023
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Keeping traction in transition
Faster-than-forecast EV take-up could present auto ABS challenges
Electric vehicle (EV) auto sales are expected to soar in the coming years, driven by consumer demand and the introduction of emissions regulations. Yet the securitisation industry could be underestimating the residual value risk of internal combustion engine (ICE) cars in the face of this accelerating change.
“As we approach the 2030s, due to the automotive energy transition, .......
News Analysis 4 July 2023
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Job swaps weekly: US Modular Capital lures Transwestern veteran
People moves and key promotions in securitisation
Job swaps weekly: US Modular Capital lures Transwestern veteran
This week’s securitisation job swaps have seen an industry veteran leave her role as head of structured finance at Transwestern to take up a new C-suite position at US Modular Capital. Elsewhere, US Bank has named a successor to Stephen Philipson as head of commercial products, while Barclays, Winston & Strawn and .......
Market Moves 30 June 2023
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Seventh heaven
Market updates and sector developments
Seventh heaven
Fannie Mae has executed its sixth and seventh reinsurance deals of the year, designated CIRT 2023-6 and CIRT 2023-7, for a total of US$786bn of mortgage risk. Both trades were brokered by Aon, and the risk was shared by 21 insurance and reinsurance companies.
The two loan pools referenced through this brace of .......
Market Moves 26 June 2023
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BNY turns to AccessFintech for digital innovation
Market updates and sector developments
BNY turns to AccessFintech for digital innovation
BNY Mellon has become the first trustee to join the data management platform, AccessFintech, as it continues in its commitments to improving loan data management, operations, and digitisation across the financial universe.
The collaboration intends to significantly improve BNY Mellon’s loan data management capabilities by addressing historical issues, .......
Market Moves 22 June 2023
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UBP launches new fixed income fund
Sector developments and company hires
Union Bancaire Privée (UBP), the Geneva-headquartered private bank, has launched a new fixed-income strategy spanning high-yield bonds, subordinated debt and securitised credit. The fund, named UBAM Strategic Income, will seek a double-B rating risk profile and target an average return of 7% per annum across its lifespan.
UBAM Strategic Income, which will invest in CLOs in addition to .......
Market Moves 20 June 2023
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FCA urged to address 'regulatory redundancies'
Sector developments and company hires
FCA urged to address ‘regulatory redundancies’
Market Moves 15 June 2023
The Managed Funds Association (MFA) has submitted a letter to the UK FCA, proposing improvements to the country’s regulatory framework for securitisations that would expand capital investment in the UK and optimise risk management on behalf of UK investors. The letter encourages the FCA to “address regulatory redundancies” and enhance compatibility with the rules .......
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Walker steps up to global credit head
Sector developments and company hires
Walker steps up to global credit head
Aon has established a new global credit team structure within its Reinsurance Solutions unit, appointing Ben Walker as head of global credit. The global credit team now combines Reinsurance Solutions’ existing mortgage, trade credit, structured credit and political risk and surety businesses to form one global function.The aim is to facilitate .......
Market Moves 14 June 2023
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Compliance issues
'Compelling case' for reform of Article 5
A new AFME report finds that investors are likely to interpret ambiguous provisions under Article 5 of the Securitisation Regulation in the EU and UK conservatively - and, in doing so, will assume disproportionately high costs to the business. The report identifies key challenges relating to compliance with investor due-diligence requirements and suggests potential strategies to overcome them.
News 14 June 2023
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Preventative intervention
UTP management gaining traction
The Italian non-performing loan ABS market remains subdued, with publicly-placed issuance drying up after the expiration of the GACS scheme in June 2022 and performance so far this year generally below expectations. While securitisation has played a central role in de-risking Italian banks’ exposure to NPLs, they now appear to be refocusing on avoiding the classification of borrowers as .......
News Analysis 14 June 2023
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Entrepreneurial spirit
Colin Reddy, md, head of financial institutions and advisory at Howden CAP, answers SCI's questions
Q: You joined Howden CAP in April from Mizuho, where you executed a number of strategic capital and balance sheet transactions for the firm’s clients (SCI 12 April). What attracted you to move to the insurance side of the risk transfer market?
The Structured Credit Interview 9 June 2023
A: I began my career in insurance, but I have spent the last 20 years in banking .......
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Strategic partnerships 'positive' for CLO managers
Sector developments and company hires
Strategic partnerships ‘positive’ for CLO managers
Market Moves 8 June 2023
The number of US broadly syndicated loan CLOs for which managers retained their majority equity stake continues to exceed the number of CLOs where equity was sold to third parties, according to data published in Fitch’s latest CLO Asset Manager Handbook. The percentage of US managers that retained a majority in their CLOs’ equity .......
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Latest SRTx fixings released
Improved tone implied in June index values
The latest fixings for the SRTx (Significant Risk Transfer Index) have been released. The index values imply a generally improved tone across all four sub-indexes since May’s fixings (SCI 3 May).
Indeed, this month’s survey responses suggest that spread estimates have tightened considerably for US large corporate and EU SME SRT transactions - by 48bp (representing .......
News 2 June 2023
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Stonepeak eyes structured solutions
Sector developments and company hires
Stonepeak eyes structured solutions
Market Moves 2 June 2023
Michael Leitner has joined Stonepeak as a senior md. Based in the firm’s New York office, he will help lead the continued buildout of Stonepeak’s credit investing capabilities. The firm believes there is a clear opportunity to leverage its broader platform and institutional knowledge to support the growth of the infrastructure marketplace through investments in credit .......