ABS

  • Wake-up call

    Change in transparency, buying behaviour needed

    The recent indictment of former Jefferies trader Jesse Litvak for misrepresenting RMBS prices has served as a wake-up call for the industry (SCI 29 January). Pressure has increased on sellers of complex securities to provide a basis for prices, while buyers are being urged to demand more information.

    Two potential outcomes are possible as a result of the Litvak indictment: .......

    News Analysis 14 February 2013

  • Subprime auto ABS warning

    Fitch believes that recent strength in the US subprime auto ABS market is leading to increased competition among lenders, which could result in looser underwriting practices. The agency also believes that the recent improvement in the stability of asset performance may indicate that future loss performance is more closely tied to new jobless claims than overall unemployment.

    The US subprime .......

    News Round-up 13 February 2013

  • ABS trading exec recruited

    KNG Securities has appointed Armando La Morgia to its fixed income team, as the firm builds its presence in the ABS market. He will play a key role in developing the firm's capabilities within the ABS trading and client solutions business.

    La Morgia was previously senior portfolio manager at Hemera Capital Management, where he focused on UK, European RMBS and .......

    Job Swaps 13 February 2013

  • UBS fined for AIG fund failures

    The UK FSA has fined UBS for failures in the sale of the AIG Enhanced Variable Rate Fund, which led to UBS customers being exposed to an unacceptable risk of an unsuitable sale of the fund. UBS also failed to deal properly with complaints from customers about sales of the fund, the FSA says.

    Between 1 December 2003 and 15 .......

    Job Swaps 13 February 2013

  • Commerzbank SME covered bond analysed

    Fitch says that programme features rather than the nature of the underlying assets were the key factor in determining how it approached Commerzbank's SME structured covered bond programme. The agency applied its covered bond criteria rather than structured finance criteria when rating the programme, despite it not being governed by the German Pfandbrief regulation due to the ineligibility of the .......

    News Round-up 11 February 2013

  • Punchy proposal

    Mixed implications for pub paper

    Punch Taverns last week announced proposed amendments to the capital structure of both its Punch A and Punch B securitisations, with mixed implications for the bonds. Elsewhere, the pub sector continues to offer good value, with managed pubco paper looking most attractive.

    Punch's restructuring proposal looks positive for Punch A junior bonds, but could be negative for Punch B. Barclays .......

    News Analysis 11 February 2013

  • Euro ABS consolidation on the cards?

    The European ABS market appears to be entering a period of consolidation, according to ABS analysts at Deutsche Bank, as evidenced by the thin new issue pipeline and recent widening in senior UK prime RMBS spreads. HMI 2010-1X A4 and ARKLE 2010-2X 2A, for example, have widened by up to 5bp this month.

    The Deutsche Bank analysts note that the .......

    News Round-up 8 February 2013

  • Undersupply and oversubscription

    Quarterly review and outlook for European ABS

    We asked Lloyds Bank, the winners of SCI's 2011 arranger award for European consumer/credit card ABS, its views on activity in Q4 and expectations for Q1 in the sector. Below are SCI's questions and the responses from Bob Paterson, head of ABS syndicate, Lloyds Bank Wholesale Banking & Markets.

    Over the past quarter, what have been the key trends in .......

    News Analysis 8 February 2013

  • Slight increase expected for UK card charge-offs

    In its latest quarterly UK Credit Card Index, Fitch notes that credit card ABS produced the strongest performance on record last year. Performance for UK credit card trusts continued to improve throughout 4Q12, with charge-off and delinquency rates decreasing even further from their historical low levels reached in 3Q12.

    Given the decreasing late delinquencies and signs of improvements in the .......

    News Round-up 7 February 2013

  • Strong demand for Euro auto paper

    A flurry of European ABS activity emerged yesterday, with auto paper helping to drive the secondary market. SCI's PriceABS data shows that a number of names were covered above par during the session, with this proving true even beyond the auto space.

    The highest cover recorded yesterday - at 100.98 - was for the GLDR 2010-A A tranche, .......

    Market Reports 7 February 2013

  • Links downgraded

    Moody's has downgraded from Aa2 to Aa3 the Euro and US MTN programmes of Links Finance. The ratings remain under review for possible downgrade.

    The move is the result of the downgrade to Aa3 of Bank of Montreal, which sponsors the SIV. There is a direct linkage between the ratings of Links Finance and BMO due to the sponsor's commitment .......

    News Round-up 5 February 2013

  • Stable performance predicted for utility ABS

    Fitch expects the stable performance of Fitch-rated US utility tariff ABS to continue, despite sector-specific and broader macroeconomic challenges.

    "Energy consumption may begin to decline as residential energy efficiency programmes mature, thus dragging down overall electric sales," comments Fitch senior director Du Trieu.

    The tepid economic recovery may also be a factor, more so amid the resolution of the US .......

    News Round-up 4 February 2013

  • Euro price gains slowing

    European BWIC volumes for the first month of 2013 stand at €2.4bn, according to Deutsche Bank figures. This level is some 122% higher than for the same period last year, with CLOs (accounting for €600m of the volume) and CMBS (€438m) featuring heavily.

    So far this paper has been readily absorbed by the market, but analysts at the bank note .......

    Market Reports 1 February 2013

  • Waiting for a spark

    Structured finance recruitment prospects limited without macro change

    The new year has dawned with the structured finance recruitment outlook as uncertain as it was for much of 2012. The environment could begin to change now that January is almost over, but one headhunter warns that it may take a long time for hiring levels to increase dramatically.

    "A lot of people are not looking at recruitment until the .......

    News Analysis 31 January 2013

  • Mixed outlook for global ABCP

    The credit quality of US and Canadian ABCP will respectively be stable and strong in 2013, according to Moody's. At the same time, bank and sovereign risk will remain a critical issue for European ABCP programmes. Regulatory uncertainty is an issue in both the US and Europe.

    In Moody's view, the credit outlook for ABCP in the US is stable, .......

    News Round-up 31 January 2013

  • Agency RMBS under pressure?

    ABS analysts at Bank of America Merrill Lynch suggest that a rotation out of bonds into equities will likely be the dominant story for 2013, as markets in the US transition from deflation and deleveraging to a normalisation of growth, rates and risk appetite. Moreover, the macro theme is expected to become less dominant, meaning that security selection should trump .......

    News 30 January 2013

  • Euro ABS investors take stock

    After a strong start to the year, the European ABS market has quietened down over the last week or so. The secondary market remains limited to BWIC activity, while the primary market has seen a couple of deals announced.

    "A couple of auto deals have been announced in the primary market, with the Red & Black TME Germany 1 transaction .......

    Market Reports 29 January 2013

  • True-ups bolster utility ABS

    The true-up mechanism structured in each utility tariff (UT) ABS transaction within Fitch's rated portfolio provides adequate credit support to maintain triple-A ratings following Hurricane Sandy, the agency reports. While the electricity supply was renewed quickly for the majority of buildings in lower Manhattan and the New Jersey shore area, some are still without power as utility systems are upgraded .......

    News Round-up 29 January 2013

  • Agreement enhances analytics offering

    Interactive Data has integrated Intex Solutions' structured finance cashflows and related data into its BondEdge Solutions platform. BondEdge clients can now access the Intex deal library API as an optional service to drive analytical calculations, reporting, simulations and cashflow projections. The move follows Interactive Data's agreement with Intex to provide independent evaluated prices on a universe of global RMBS, ABS .......

    News Round-up 29 January 2013

  • Card delinquencies hit all-time low

    The US credit card delinquency rate declined to an all-time low of 2.28% in December, 9bp lower than in November, according to Moody's Credit Card Indices. The early-stage component of delinquencies also fell to an all-time low of 0.63%, 6bp below its November level of 0.69%.

    "The rate of improvement in both metrics had slowed in the several months prior .......

    News Round-up 28 January 2013

  • Bondholder notification service offered

    Citi has launched a communication and notification service to enable structured finance issuers to communicate key actions directly to investors in real-time via the Bloomberg Professional service. In its capacity as notification agent for issuers, the bank will deliver automated amendments, waivers and consents and other types of notices directly to investors via CF, the corporate filing platform available to .......

    News Round-up 28 January 2013
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