ABS

  • Green bond principles supported

    A consortium of investment banks has announced their support for a set of green bond principles developed to serve as voluntary guidelines on the recommended process for the development and issuance of green bonds. The principles encourage transparency, disclosure and integrity in the development of the green bond market, which will use both direct project exposure and securitisation.

    A green .......

    News Round-up 14 January 2014

  • ABCP to feel regulatory squeeze

    Global ABCP credit quality should be stable in 2014, says Moody's. Regulatory uncertainty remains a challenge on both sides of the Atlantic, with European sponsoring banks feeling the squeeze first.

    The credit quality of US ABCP should remain stable this year. Bank credit quality has improved and the continued economic and financial recovery is expected to support steady asset performance.

    News Round-up 14 January 2014

    Premium Content

  • French consumer lending change 'negative'

    French consumer lenders are now offering credit to borrowers on temporary employment contracts who were not previously eligible for loans. This loosening of underwriting criteria is credit negative, says Moody's, because it allows personal loans to be granted to borrowers who carry a higher risk of credit default.

    However, lenders are adding conservative terms and conditions to the loans, which .......

    News Round-up 14 January 2014

  • Foundation for continued growth?

    The US CLO and CMBS sectors saw impressive issuance in 2013, as the recovery in the asset classes continued apace. European volumes, meanwhile, reflect the growing diversity of jurisdictions on offer across the region's ABS market.

    Last year proved to be impressive for US CMBS 3.0 issuance, with conduit volumes totalling US$53.1bn, a 65% increase from US$32.2bn in 2012. US single-borrower/single-asset .......

    News 14 January 2014

  • China risk retention update 'credit positive'

    The People's Bank of China and the China Banking Regulatory Commission last month jointly updated the 5% risk retention rule on Chinese securitisations. The update expands the types of notes that are part of a securitised transaction that originators must retain beyond just the equity tranches to include potentially 5% or more of all tranches, according to Moody's latest Credit .......

    News Round-up 13 January 2014

  • Auto recoveries set to fall

    Average recoveries on defaulted auto loans in both prime and non-prime ABS pools will fall over the next 12 months and start to stabilise at the beginning of 2015, according to Moody's. Based on an analysis of Manheim Index data, the agency expects recoveries on defaulted auto loan ABS to decline to 50%-60% in the prime segment and to 40%-50% .......

    News Round-up 13 January 2014

  • Italian SME review released

    Fitch has published its latest SME market review, focusing on the Italian SME securitisation sector. The majority (99.9%) of enterprises active in the Italian economy are SMEs, accounting for 81% of the workforce. Yet SMEs in the country face an unfavourable business environment: the 2013 World Bank Doing Business survey ranked Italy 30 out 31 OECD countries in the ease .......

    News Round-up 10 January 2014

  • RFC issued on life settlement criteria

    AM Best has requested comments on its draft life settlement securitisation criteria report. The report reflects changes and refinements the agency made to an earlier draft, released in September, after receiving comments and having discussions with market participants.

    The changes and refinements to the initial draft criteria report include: an assumption that the excess mortality ratings produced by medical underwriters .......

    News Round-up 10 January 2014

  • Card performance hits 'historic' levels

    Fitch reports that most of its prime credit card ABS indices touched historic levels in 2013. The Fitch Prime 60+ Day Delinquency and Charge-off Indices may be approaching their troughs, however.

    Fitch's Prime 60+ Day Delinquency Index increased by 2bp in December to 1.27%, albeit 60+ day delinquencies remain relatively low compared to one year ago when they were 1.73%. .......

    News Round-up 9 January 2014

  • AlphaCat sidecar formed

    Validus Holdings has joined with other investors in capitalising its AlphaCat 2014 collateralised sidecar, which fully deployed its capital for the 1 January 2014 renewal season. The vehicle was funded with US$160m of equity capital, with third-party investors contributing US$138m and the balance provided by Validus. AlphaCat Managers will underwrite business for AlphaCat 2014, for which it will be paid .......

    News Round-up 9 January 2014

  • FINRA urged to revisit TRACE proposal

    SIFMA has submitted a comment letter to the SEC on FINRA's proposed rule change relating to TRACE reporting and dissemination of transactions in additional ABS (SCI 5 November 2013). The association requests that FINRA not implement this proposal and instead engage in further discussion with the industry as to how best to preserve ABS market liquidity and re-propose this proposal .......

    News Round-up 9 January 2014

  • Indian trade reporting mandated

    As part of its efforts to improve transparency in the Indian securitisation market, the Securities and Exchange Board of India (SEBI) has issued a circular requiring reporting and clearing of trades to be implemented by 1 April. Reporting platforms will provide data to include issuer name, ISIN number, face value, maturity date, current coupon, last price reported, last amount reported .......

    News Round-up 8 January 2014

  • European NPLs and the advantages of securitisation

    Dennis Buckley, director at Credit Mediation Limited, discus...

    Estimates from reports compiled by PwC and EY put the current volume of non-performing loans (NPLs) made by banks within the EU at between €1.2trn and €1.5trn, with these levels expected to rise further in the next few years. The market has seen a number of high-profile sales of large NPL portfolios, the most recent being Lloyds' sale of its .......

    Talking Point 7 January 2014

  • ABS bid-lists reappearing

    Auto and credit card bonds dominated supply in the US ABS secondary market yesterday, as BWIC volume begins to pick up following the seasonal break. SCI's PriceABS data also shows a number of timeshare ABS tranches out for the bid, with bid-list volumes totalling just over US$100m for the session.

    The auto ABS bonds circulating yesterday included the .......

    Market Reports 7 January 2014

  • SLM servicing disruptions eyed

    As Sallie Mae transitions certain assets and functions under its reorganisation (SCI 30 May 2013), both newly created entities - SLM BankCo and NewCo - could see some short-term servicing disruptions. Indeed, Sallie Mae disclosed during its third-quarter earnings call that an increase in delinquency from the previous quarter was caused by the transition of the company's private credit portfolio .......

    News 6 January 2014

  • Quota share sidecar launched

    SCOR has placed a fully collateralised sidecar, Atlas X Reinsurance, which will provide the firm with an additional three-year capacity of US$55.5m from a new panel of investors. Atlas X - an Irish-domiciled special purpose reinsurance vehicle - and SCOR Global P&C have entered into a quota share retrocession agreement, under which Atlas X will reinsure a proportional share of .......

    News Round-up 6 January 2014

  • Solvency revisions still strict

    EIOPA has recalibrated the proposed Solvency 2 spread risk charges for securitisations to increase differentiation between ABS asset classes (SCI 20 December 2013). However, securitisation remains heavily penalised under the current proposals, with the capital charges potentially making it more efficient to invest in the underlying assets than in a securitised bond.

    While proposed capital charges for some bonds are .......

    News 3 January 2014

  • Strong ILS demand to continue

    As investor demand has continued to grow for catastrophe bonds, sponsors have been able to offer deals at considerably lower coupon rates and with increasingly favourable structures that suit individual company requirements, Fitch notes. The agency suggests that continued strong demand for a diversifying set of risks remains the key driver of the ILS market.

    The cat bond sector experienced .......

    News Round-up 3 January 2014

  • CRA examination report issued

    The US SEC has issued its annual staff report on the findings of examinations of the 10 credit rating agencies registered as NRSROs. Among the areas examined are whether each NRSRO conducts business in accordance with its policies, procedures and methodologies, as well as how an NRSRO manages conflicts of interest and whether it maintains effective internal controls.

    The 2013 .......

    News Round-up 2 January 2014

  • HQLA move welcomed

    Further details have emerged on the EBA's updated definition of high quality liquid assets (HQLA) in relation to RMBS (SCI 20 December). Under the clarifications, RMBS bonds with the following criteria will be counted as HQLA for the purposes of the LCR: ratings of at least AA-/Aa3; minimum issue size of €100m-equivalent; maximum time to maturity of five years; and .......

    News Round-up 24 December 2013

  • Euro ABS, MBS outlooks mixed

    After declining this year for the first time since 2008, European ABS volumes are expected to rise again in 2014. European RMBS volumes are anticipated to be broadly steady next year, while the growth seen in investor-placed European CMBS issuance could slow, according to S&P.

    Investor-placed ABS issuance reached about €20bn in 2013, down from €27bn in 2012. That is .......

    News Round-up 24 December 2013
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