ABS

  • Varied supply in secondary ABS

    US ABS BWIC volume dropped yesterday to a little over US$100m. Much of the supply came from bonds backed by auto collateral, but container, credit card, servicer advance and student loan bonds were out for the bid as well.

    Offering levels across the market were generally unchanged from last week. Aside from the student loan paper, most of the bonds .......

    Market Reports 18 March 2014

  • Asset manager eyes Nordics

    ECM Asset Management has registered its range of credit funds in Sweden and Finland. The firm says it has identified the two countries as markets with significant investor demand for credit funds.

    "Investors in these markets have been investing in equity markets for some time, but have lacked the diversifier of high quality credit funds that ECM now can offer," .......

    Job Swaps 18 March 2014

  • ILS fund minted

    CATCo Investment Management has launched its first dedicated traditional reinsurance investment strategy. Dubbed Aquilo, the fund will be exposed to traditional global reinsurance risk, insurance-linked securities and other financial instruments.

    Managed by ceo Tony Belisle and co-managed by Charlie Vaughan and Rick Montgomerie, Aquilo will launch with initial capital of US$110m, with planned growth for 2015 to US$250m. The fund's .......

    News Round-up 18 March 2014

  • Rating activity becoming 'balanced'

    Global structured finance (SF) rating activity was far more balanced in 2013, according to Fitch, with downgrades declining to pre-crisis levels and upgrades becoming more visible. While downgrades continued to outnumber upgrades by a margin of 1.7 to one, the downgrade rate at 10% declined to its lowest level in six years. Conversely, the upgrade rate rose to 6%, breaking .......

    News Round-up 17 March 2014

  • SF technology to proliferate in EM

    S&P anticipates a proliferation of structured finance technology throughout emerging markets in 2014. The agency believes that expanding domestic markets will continue to dominate the emerging markets landscape within the largest investment grade countries, since cross-border issuances have offered little cost savings for issuers, especially for non-deliverable currencies. It also expects issuers in speculative grade countries to continue seeking cross-border .......

    News Round-up 14 March 2014

  • Portugal's TD plan 'sustainable'

    The government plan to reduce costs and increase revenue can make Portugal's electricity system sustainable and eliminate outstanding tariff deficits (TDs) in the next 10 years, Fitch suggests. Spain's ability to eliminate TDs remains considerably less certain, however.

    Portugal's plan includes revising special tariffs on new renewable contracts and phasing out end-user regulated electricity tariffs by end-2015. Fitch expects these .......

    News Round-up 13 March 2014

  • US ABS ratings stability underlined

    S&P reports that the creditworthiness of US ABS generally remained stable in 2013. Specifically, 99.8% of the transactions rated triple-A at the start of year had the same rating at the end of the year or were paid off in full, while none defaulted.

    From 1983 through 2013, 82.8% of US ABS originally rated triple-A kept that rating or were .......

    News Round-up 11 March 2014

  • Cards support US ABS secondary supply

    US ABS bid-list supply during yesterday's session was mainly accounted for by credit card names. BWIC volumes reached almost US$150m with auto, aircraft and student loans paper also circulating.

    SCI's PriceABS data captured a varied mix of credit card tranches out for the bid in yesterday's session. Among them was the BOIT 2004-C2 C2 tranche, which .......

    Market Reports 11 March 2014

  • Credit card maturities to decline

    US credit card ABS maturities will decline sharply in the next few years, says Fitch. The rating agency projects maturities to top US$41bn in 2014 before falling to just over US$21bn in 2016.

    Historically low rates during the credit crisis led to many credit card issuers pulling back on securitisation, but levels may soon rise again. Overall issuance this year .......

    News Round-up 11 March 2014

  • Tiering forecast for water WBS

    Fast-tracking of business plans among certain UK water companies is expected to drive tightening across their securitised bonds. The move follows the release of Ofwat's guidance on allowed weighted-average cost of capital (WACC) for the 2015-2020 regulatory period (PR14) (SCI 10 February).

    Allowed returns are likely to fall to 3.85% for PR14, versus 5.1% for the previous regulatory period (PR09). .......

    News 10 March 2014

  • PAYE expansion to boost FFELP prepays

    President Obama's proposed expansion of the existing Pay as You Earn (PAYE) plan for student loan borrowers could decrease default risk and increase prepayments in FFELP ABS portfolios, Fitch says.

    The PAYE plan only applies to borrowers from the direct loan programme, but FFELP borrowers could benefit by consolidating their FFELP loans into direct consolidation loans. Fitch believes that the .......

    News Round-up 10 March 2014

  • From strength-to-strength

    Peer-to-peer securitisation has room to grow

    The peer-to-peer securitisation market may be in its infancy, but a handful of deals have already been completed. While the deals so far have been small by securitisation standards, the sector could become a "multi-billion" dollar market.

    "We have only recently started to see deals coming to market, but there is a lot of optimism that there is room for .......

    News Analysis 7 March 2014

  • Lower losses seen on CDQ, DP loans

    Italian Cessione del Quinto (CDQ) and Delegazione di Pagamento (DP) consumer loan products pose risks because of their greater complexity, but provide enhanced security and generally imply lower losses than standard consumer loans, Moody's says. These products saw total issuance of €4.5bn in 2013, around 50% of which was concentrated with the top four players in the market.

    "CDQ and .......

    News Round-up 6 March 2014

  • ARS pricing service offered

    SIX Financial Information has teamed up with Pluris Valuation Advisors to help clients to value auction rate securities. Pluris has an extensive database covering thousands of recent transactions and a close relationship with SecondMarket, which is currently the only active auction rate trading venue.

    The Pluris auction rate pricing available through SIX covers municipal, student loan and preferred securities. It .......

    Job Swaps 5 March 2014

  • RFC issued on TD approach

    Fitch has published a criteria exposure draft for rating Portuguese and Spanish electricity tariff deficit (TD) securitisations. The agency believes that the ratings of TD securitisations cannot be more than three notches higher than the issuer default rating (IDR) of the relevant sovereign, mainly because its central expectation is that macroeconomic trends and regulatory policies have a direct impact on .......

    News Round-up 4 March 2014

  • From the sidelines?

    Sidecars, SACs and private cat bonds gaining ground

    The dominance of catastrophe bonds in the ILS sector could be challenged by the growth of sidecars. With segregated accounts companies (SACs) also rising in prominence and private deals becoming more common, the nature of the market is changing.

    Last year was the busiest since 2007 for the ILS market, with Willis Capital Markets & Advisory estimating that more than .......

    News Analysis 4 March 2014

  • Korean credit card quality to deteriorate

    The credit quality of receivables backing Korean credit card ABS is expected to deteriorate as a result of the recent data breach that affected millions of cardholders. The disappearance of affected cardholders from securitisation pools will weaken the overall credit quality of receivables and the principal payment rate (PPR) in credit card ABS, Moody's says.

    Three credit card companies were .......

    News Round-up 28 February 2014

  • Lifting of Aussie import tariffs 'credit negative'

    Australia's Productivity Commission published a position paper on 31 January, describing the country's auto import restrictions and tariffs as redundant. Moody's says in its latest 'Structured Thinking: Asia Pacific' publication that the lifting of the restrictions would be credit negative for Australian auto loan and operating lease ABS because they would lower the price of cars, thereby affecting ABS pools .......

    News Round-up 28 February 2014

  • PRI to boost EM issuance

    Political risk insurance (PRI) for capital markets has re-emerged, with a broader scope for coverage to adapt to the changing needs of emerging markets finance, Fitch says. These newer products normally relate to a sovereign guarantee or obligation and therefore do not address private sector companies in the absence of a sovereign support mechanism.

    "New PRI products that cover not .......

    News Round-up 27 February 2014

  • Stable performance expected for DFP ABS

    Fitch expects dealer floorplan (DFP) ABS assets and ratings to be stable this year, due in part to a robust vehicle sales forecast. The agency's US light vehicle sales forecast for 2014 is 16 million units, which would provide ample support for US dealer revenues and profit levels.

    Dealers also expect to benefit from healthy demand for both new and .......

    News Round-up 27 February 2014

  • Solar investment gaining traction

    Investor interest in commercial solar projects has more than doubled in the last 12 months, according to Mercatus. A year-end analysis of commercial solar project investment and development trends undertaken by the firm reveals that exploration - and investment dollars - for solar projects is on the rise.

    Mercatus reports growth of more than 200% in the number of projects .......

    News Round-up 26 February 2014
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