ABS
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Future-proofing credit portfolio management
John Pellew, principal, distribution and securitisation, Arr...
It has become a bit of a cliché to say that technology, data, analytics – and importantly – the appropriate application of such tools has become fundamental to running a successful business. And yet, despite the regularity with which the topic is discussed, how precisely this applies to the distressed loans market has not been fully appreciated.
For .......
Talking Point 26 October 2021
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Highland Capital lawsuit filed
Sector developments and company hires
Highland Capital lawsuit filed
Market Moves 25 October 2021
The latest lawsuit brought by Highland Capital Management (HCMLP) against former employees has been filed in the bankruptcy court of the northern district of Texas. The action seeks to “recover hundreds of millions of dollars in damages that HCMLP suffered at the hands of its founder, James Dondero, acting in concert with other entities that he owned .......
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RTS pending
SRT regulatory uncertainty persists
The regulatory technical standards (RTS) pertaining to the EBA’s final report on significant risk transfer that were expected to be published in June have been postponed indefinitely. The RTS focus on the paper’s onerous excess spread provisions, although market participants have been equally concerned about the proposed SRT tests that could be incorporated into the CRR. Indeed, both the .......
News Analysis 22 October 2021
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Pockets of resilience
European ABS/MBS market update
European ABS/MBS spreads leaked slightly wider and investor demand cooled somewhat last week as the market finally caught up with broader macro volatility. However, some sectors continue to outperform and this week is off to a strong start with a broad range of deals in the primary pipeline to follow.
“Indisputably, on a macro level, the same concerns .......
News 20 October 2021
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Rare agricultural MBS prints
Sector developments and company hires
Rare agricultural MBS prints
Market Moves 20 October 2021
The Federal Agricultural Mortgage Corporation (Farmer Mac) – a federally chartered corporation that provides a secondary market for a variety of loans made to borrowers in rural America, with the aim of increasing the availability and affordability of credit - has completed a US$302.7m securitisation of agricultural mortgage loans. The FARM Series 2021-1 agricultural MBS is backed by .......
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Project Frontier securitisation inked
Sector developments and company hires
Project Frontier securitisation inked
Market Moves 19 October 2021
National Bank of Greece (NBG) has entered into a definitive agreement with a consortium consisting of affiliates of Bain Capital Credit, Fortress Investment Group and doValue Greece, for the sale of 95% of the mezzanine and junior notes issued via a securitisation backed by a portfolio of non-performing exposures (NPEs) with a total gross book value of .......
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SRT prints
KIMI X prices tight
Santander has finalised a full-stack capital relief trade backed by a €450m portfolio of Finnish auto loans. Dubbed KIMI X, the transaction priced at pre-Covid levels (see SCI’s capital relief trades database).
Rated by S&P and Fitch, the transaction consists of €411.8m AAA/AAA rated class A notes (which priced at one-month Euribor plus 13bp), €17.6m A/AA+ rated class B .......
News 18 October 2021
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Big bang?
Tokenisation touted as a replacement for securitisation
Tokenisation is being touted as a potential replacement for securitisation, given its many applications and benefits. However, a number of challenges remain before the technology can be fully adopted by the market.
News Analysis 14 October 2021
“Tokenisation could replace securitisation – but it won’t be a big bang. However, when you see the speed of digitisation in some areas, you see it has the .......
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Challenging valuations
Covid-19 aftermath dogs NPL exposures
The aftermath of the coronavirus crisis is hindering the valuation of properties that back European non-performing loan transactions. Nevertheless, collections have picked up and more NPL ABS issuance is expected.
According to Moody’s, the deterioration in the quality of the valuation of properties underlying securitised exposures in new trades can be ‘’explained by the increased difficulty in carrying .......
News 14 October 2021
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Transition trauma
A bumpy road ahead for shift to post-Libor world
The structured finance market still has a great deal to do before the beginning of next year when contracts can no longer be quoted in Libor, agrees Amy Williams, partner and structured finance expert at Hunton Andrews Kurth.
Very few securitizations or the assets which comprise the reference portfolios have moved over to quote contracts in term SOFR. CLOs, RMBS and warehouse .......
News Analysis 13 October 2021
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Forbearances plunge
Fresh data reveals biggest drop in forbearances in a year
The largest drop in the number of US mortgages in forbearance in 12 months was recorded last week in the seven days ending October 4 according to Black Knight data released today.
Active forbearance plans fell by 177,000, or 11%, with healthy declines recorded across all investor classes. There has been a reduction of forbearances of 294,000 in the last 30 days, which .......
News 8 October 2021
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Credit recovery
Rating upgrades outpace downgrades
Rating upgrades are outpacing downgrades this year, although net upgrades so far represent only about 12% of the net Covid-induced downgrades in 2020. Still, credit outlooks in aggregate have stabilised and returned to pre-pandemic levels, while default rates have fallen sharply and are trending towards their long-term average.
According to S&P, credit quality continues to recover slowly from .......
News 8 October 2021
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Landmark guarantee inked
ThinCats and BBB seal agreement
The British Business Bank and alternative lender ThinCats have finalised a guarantee agreement via the former’s ENABLE Guarantee programme. The guarantee will provide up to £300m of additional funding for UK SMEs and midcaps. The transaction features a warehouse facility provided by Citi and it is the first under the ENABLE programme to facilitate lending to smaller businesses from .......
News Analysis 8 October 2021
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Green light
Record second-hand car prices fuel RV opportunities
Rising used car prices are positive for auto ABS transactions with exposure to residual values (RVs). Indeed, opportunities could emerge for deals with RV risk to outperform rating agency assumptions, which could – in turn – lead to rating upgrades.
Car values usually start depreciating as soon as they leave forecourts, but figures from Auto Trader - an automotive advertising .......
News Analysis 7 October 2021
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Chopra on the march
CFPB to expand its role and come down harder on securitisation
The securtisation market will see a more aggressive CFPB under the leadership of recently appointed director Rohit Chopra, with “more frequent enforcements and bigger fines,” according to Rachel Rodman, a partner with Cadwalader, Wickersham and Taft.
Rodman was speaking yesterday (5 October) at the annual SFA conference in Las Vegas on a panel addressing the future of housing .......
News 6 October 2021
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Untapped markets
French NPLs gaining attention
Southern European jurisdictions continue to witness strong activity in the non-performing loan space, especially in Greece and Cyprus. At the same time, investor interest in French NPLs is on the rise.
“Investors are looking further afield for opportunities in such markets where others aren’t necessarily looking. They are exploring opportunities everywhere that they can,” observes Amo Chahal, md .......
News 6 October 2021