ABS
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Slowly widening
European ABS/MBS market update
With investors already looking ahead to 2022, the European ABS/MBS primary market is slowly thinning out. However, transactions were still well received this week, though macro concerns have started to make an impact.
“The market has generally been pretty steady,” notes one European ABS/MBS trader. “Naturally it is a little wider at the moment as we are quickly .......
News 26 November 2021
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Partial placement dropped
Montepio opts for full-stack SRT
Montepio Bank has finalised a full-stack significant risk transfer transaction backed by a €378.3m portfolio of Portuguese consumer and auto loans (see SCI’s Euro ABS/MBS Deal Tracker). Dubbed Pelican Finance Two, the deal is the bank’s first SRT sold to private investors. The lender initially considered a partially placed deal but switched to the typical full-stack form, given .......
News 26 November 2021
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SRT chronicle: part two
In the second of a three-part series on bank risk transfer t...
The SRT market is predominantly European (representing 86% of transactions since 2010), although US banks are accounting for an increasing percentage since 2019 - with JPMorgan now a regular issuer, one transaction by Goldman Sachs in 2020 and a few regional banks entering the market in 2021. Prior to 2019, only Citi and Bank of Montreal were regular issuers in .......
Talking Point 25 November 2021
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Advanzia advances
German credit card ABS debuts
European online lender Advanzia has closed its debut ABS transaction of over €475m in senior funding. The deal also represents the first securitisation backed by a German credit card portfolio.
"Advanzia continues to strengthen its position in the capital markets by demonstrating its ability to issue structured debt securities. This is a significant milestone for the bank, as .......
News 25 November 2021
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Upgrades anticipated after CMBS updates
Sector developments and company hires
Moody’s has updated three commercial real estate sector methodologies, following requests for comments on the proposals in July. The rating agency has placed a number of US CMBS tranches on review for upgrade as a result.
One of the updates is in connection with Moody's methodology for rating US and Canadian conduit/fusion CMBS, which replaces the version from September 2020. .......
Market Moves 22 November 2021
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Lower for longer?
SRTs to benefit from inflation
Significant risk transfer transactions are expected to receive a boost from anticipated interest rate rises, following increasing levels of inflation worldwide. Indeed, SRTs are floaters offering positive real returns, along with diversification and access to core bank lending books. However, investors remain cautious over the impact that significant increases in interest rates could have on growth.
If .......
News Analysis 18 November 2021
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Nascent asset class
Non-performing lease ABS tipped for growth
Issuance of ABS backed by Italian non-performing leases is expected to reach €1bn over the next year, partially driven by increased defaults following the expiry of payment holidays. Recent legal developments and GACS-eligibility of the assets should also facilitate securitisation activity.
“The recent market conditions and legal framework developments have facilitated non-performing lease securitisations. The key challenges for .......
News Analysis 18 November 2021
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SRT chronicle: part one
In the first of a three-part series on bank risk transfer tr...
The bank balance sheet securitisation market has enjoyed significant growth over the past five years and looks set to continue apace on the back of clearer regulation, an increasing number of banks having acquired the technology and economic incentives for banks to free up risk-weighted assets (RWAs) rather than raising capital. In this series of articles, we will use significant .......
Talking Point 18 November 2021
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FFELP follies
Debt servicer in the spotlight as default looms for $3bn SLABS
All eyes are on student loan servicer Navient after Fitch downgraded SLMA 2008-3 to D at the beginning of the month.
It is highly likely that more Federal Family Education Loan Program (FFELP) deals will meet the same fate and Navient must work out a strategy to cope with default on a large scale, say analysts.
The downgrade to SLMA 2008-3 occurred when .......
News Analysis 17 November 2021
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Dutch mortgage alliance expanded
Sector developments and company hires
Dutch mortgage alliance expanded
Market Moves 16 November 2021
Achmea Bank is set to acquire a €500m mortgage portfolio from Dutch insurer a.s.r., which will continue to manage the mortgages for Achmea Bank. The two organisations have expressed the intention to conduct additional transactions of €500m in both 2022 and 2023. In addition, Achmea Bank will acquire roughly €190m of newly originated mortgages from a.s.r. .......
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More of the same?
Euro auto ABS tipped for further diversification
The European auto ABS market is set for further expansion and diversification, according to new research from DBRS Morningstar. The report, which covers auto ABS issuance over the past five years, suggests that present market stability - despite Covid-19 disruptions - indicates at least short-term future growth within the auto finance business.
“We expect to see more transactions .......
News 12 November 2021
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Some softening
European ABS/MBS market update
With the end of the year in sight, issuers are competing for investor demand in the European ABS/MBS primary market. This week saw mixed results for the various actors involved.
“Naturally the market is more complex than a few weeks ago,” notes one European ABS/MBS trader. “2021 has generally been an excellent year for the primary market, which .......
News 12 November 2021
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Sri Lanka eyes remittance securitisation
Sector developments and company hires
Sri Lanka eyes remittance securitisation
The government of Sri Lanka (GOSL) is requesting competitive proposals from banks and investors for consideration to be appointed as counterparts or arrangers for its proposed securitised financing arrangement (SFA). The arrangement would be backed by foreign currency receipts of the Central Bank of Sri Lanka (CBSL) under the mandatory sale of 10% of workers' .......
Market Moves 12 November 2021
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Hedges eyed
CPMs target post-pandemic concentration risks
The International Association of Credit Portfolio Managers (IACPM) has completed its 2021 Principles and Practices in CPM Survey. Conducted every other year, the survey focuses on five key areas of concern to its members, including the evolution of risk and credit portfolio management. The latest survey shows that CPM functions are increasingly concerned about concentration risks, following last year’s .......
News 12 November 2021
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Indian securitisation market presents challenges
The Indian structured finance market has been around for ove...
The market revolves around Indian banks' targets for lending to priority sectors. Banks have traditionally been the largest investors in securitised debt, as they need to fulfil the Indian central bank’s requirements to lend a target percentage of their loan books to priority sectors, which are defined by the central bank and include minorities, agriculture, SMEs and export industries. The .......
Talking Point 11 November 2021
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Too slow
Disappointing timeline for call for evidence on STS reform
The European Commission’s latest call for evidence on its securitisation prudential framework review highlights a familiar pattern in the EU’s regulatory actions. The combination of an elongated timeline and the absence of a holistic approach point to a lack of momentum for the European securitisation market.
Earlier this year (SCI 17 May), the Joint Committee of the European Supervisory .......
News 11 November 2021
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First LBR PCC investor signed
Sector developments and company hires
First LBR PCC investor signed
Lloyds has announced that Ontario Teachers’ Pension Plan Board will be the first investor to support underwriting through its multi-insurance SPV, London Bridge Risk (LBR) PCC. LBR was established in January of this year with sponsorship from Lloyds, with ambitions to create a market that invites new forms of capital and allow for easier access .......
Market Moves 10 November 2021
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