ABS
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Agency angle
SRT ratings on the rise?
Ratings for GSE credit risk transfer transactions are commonplace, given the US agencies’ desire to appeal to a wide range of investors. However, the volume of both public and private ratings for non-agency capital relief trades appears to be on the rise, as the market prepares for Basel 3 Endgame.
Andreas Wilgen, group credit officer for global structured .......
News 23 May 2024
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Lever up
Back leverage for CRT buying on the rise
It is becoming increasingly common for buyers of positions in synthetic capital relief trades to use leverage, say well-placed market sources.
Not only does this procedure enhance returns at a time of diminishing yields, there is a growing number of .......
News 23 May 2024
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MPOWER graduates into securitisation
Provider of loans to international students says deal is first of many
MPOWER Financing, a provider of loans for international university students, has issued its first securitisation, in what it anticipates will develop into a regular stream of issuance. The transaction, MPOWER Education Trust 2024-A, consists of three tranches totalling US$198.1m, which received ratings by KBRA and Morningstar DBRS.
With an underlying collateral pool of US$215.2m, the deal represents the .......
News Analysis 22 May 2024
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Picking up the PACE
Consumer protection measures bring benefits
The property assessed clean energy (PACE) ABS market could be set for a renaissance, following progress in bolstering consumer protection measures. Nevertheless, C-PACE activity continues to far outweigh that of the R-PACE sector (SCI 20 January 2023).
“We refer to it as PACE 2.0. We’ve built in many consumer protections, including making sure borrowers have the ability .......
News Analysis 22 May 2024
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CFPB funding mechanism 'constitutional'
Market updates and sector developments
The US Supreme Court has issued its decision in the ‘Consumer Financial Protection Bureau v. Community Financial Services Association of America, Ltd’ case, holding that the CFPB's funding mechanism - as set forth in Title X of the Dodd-Frank Act - is constitutional. In evaluating the CFPB's funding structure against the Constitution's requirements, the Court found that the agency's appropriation mechanism .......
Market Moves 17 May 2024
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AI credit analysis project launched
Market updates and sector developments
Stratiphy and Chenavari Financial Group have joined forces to develop custom AI tools aimed at improving the quality of and mitigating the subjectivity within credit analysis. By harnessing the wealth of existing data and employing a range of AI techniques, the project aims to enhance efficiency, pricing capability and precision in forecasting within credit analysis.
Representatives of each .......
Market Moves 13 May 2024
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Attraction stations
SRT relative value in focus
The relative value of SRT transactions is attracting a swathe of new as well as former investors to the space, despite the fact that spreads are tightening. Nevertheless, the creation of an active secondary market remains remote.
Several investors have recently returned to the SRT market after long spells away. For instance, Cheyne Capital last month announced it .......
News Analysis 13 May 2024
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CFPB alleges student loan servicing failings
Market updates and sector developments
The CFPB has taken action against the National Collegiate Student Loan Trusts (NCSLT) and Pennsylvania Higher Education Assistance Agency (PHEAA) for multi-year servicing failures, alleging that the defendants failed to respond to borrowers seeking relief from student loan payments, including during the Covid-19 national emergency. The CFPB has filed proposed stipulated final judgments, which - if entered by the .......
Market Moves 10 May 2024
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Job swaps weekly: Western Alliance Trust elevates CLO expert to president and ceo
People moves and key promotions in securitisation
This week’s roundup of securitisation job swaps sees Western Alliance Trust Company appointing a new president and ceo with a background in CLOs, levered loans and securities custody. Elsewhere, Aon has hired an executive md of capital advisory, while Eversheds Sutherland has snapped up a Clifford Chance veteran as a capital-markets-focused partner.
Western Alliance Trust has promoted md .......
Market Moves 10 May 2024
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European SRT: Shifting prices – video
Alvarez & Marsal's Robert Bradbury speaks to SCI abo...
Robert Bradbury, md and head of structured credit execution at Alvarez & Marsal, speaks to SCI's Simon Boughey about pricing dynamics in the European SRT market. Bradbury discusses the quality of underlying assets, the growth in prevalence of standardised features, the synergy between growth of supply and demand, the impact of new entrants on the buyer front, and comparisons with pricing .......
News Analysis 8 May 2024
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Efficient frontier
Optimising returns in a post-Basel 4 landscape
With the implementation of Basel 4 (also known as Basel 3.1 or Basel 3 Endgame) looming ever closer[1], banks are yet again facing a shifting regulatory landscape. Against this backdrop, KPMG has put forward a practical solution for advanced banks to proactively manage their capital, notably through the concept of an “efficient frontier.”
The .......
News Analysis 7 May 2024
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Job swaps weekly: Ashurst lures Fried Frank trio
People moves and key promotions in securitisation
This week’s roundup of securitisation job swaps sees Ashurst hiring three structured products professionals, including a partner, from Fried Frank. Elsewhere, Capital Four’s US ceo has left the firm after three years, while HFW has appointed two executives from Norton Rose Fulbright to its global shipping and export finance practice.
Ashurst has made three appointments to its US structured products, derivatives and .......
Market Moves 3 May 2024
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PRA and FCA confirm new UK securitisation rules
Market updates and sector developments
The Financial Conduct Authority’s (FCA) and Prudential Regulation Authority (PRA) have published policy statements on new securitisation rules. Alongside the UK Treasury’s draft statutory instrument on securitisation, which was published last week, the changes will come into force on 1 November and will replace EU securitisation regulations.
The PRA’s statement was published alongside the Securitisation Instrument 2024 section of the PRA Rulebook.
The .......
Market Moves 2 May 2024
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ATLAS attracts MassMutual commitment
Market updates and sector developments
MassMutual has become a minority equity owner in ATLAS SP Partners and a capital partner to the ATLAS platform. As part of the multi-billion-dollar commitment, MassMutual has also agreed to invest in Apollo’s asset-backed finance (ABF) franchise.
These investments will allow MassMutual to access predominately investment-grade, asset-backed credit originated by ATLAS SP and across the broader Apollo ecosystem, .......
Market Moves 26 April 2024
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Job swaps weekly: Cheyne Capital snaps up SRT veteran
People moves and key promotions in securitisation
This week’s roundup of securitisation job swaps sees Cheyne Capital hiring an SRT veteran who recently left their role at Barclays. Elsewhere, Wilmington Trust has made changes to its global capital markets leadership team, while a risk transfer specialist has left their position at The D. E. Shaw Group ahead of taking up a new role.
Cheyne Capital .......
Market Moves 26 April 2024
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Opening up
LatAm SRT activity gaining traction
SRT activity in Latin America is gaining traction, with three deals now completed - including two in the last 12 months - and more on the horizon. Multilateral development banks (MDBs) are playing a crucial role in opening up the region.
Edmund Parker, partner at law firm Mayer Brown, has worked on multiple Latin American synthetic securitisations. He .......
News Analysis 26 April 2024
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Final FCA, PRA rules 'imminent'
Market updates and sector developments
HM Treasury has published a draft statutory instrument that outlines the next steps in the process of replacing the onshored EU legislative regime for securitisation with its own rules under the broader ‘Smarter Regulatory Framework’ (SRF). The draft Securitisation (Amendment) Regulations 2024 (Amending SI) will repeal the EU Securitisation Regulation on 1 November, implying that the new regime – including .......
Market Moves 24 April 2024
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FFELP loan 'waivers' proposed
Market updates and sector developments
The US Department of Education last week published a notice of proposed rulemaking (NPR) in the Federal Register regarding debt relief for certain federal student loans, including certain FFELP loans held by ABS trusts. Comments on the proposals are due by 17 May and the department aims to finalise the rules in time to start delivering relief this autumn.
Market Moves 22 April 2024