ABS
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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
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Bridging the gap
Syndicated solution launches for portfolio insurance
As appetite for structured credit solutions continues to grow, insurance balance sheets seem increasingly well suited to meet this demand. However, this brings new challenges for investors, (re)insurers and issuers alike.
One such challenge is the need for banks to spread (re)insurer counterparty risk across several counterparties. The number of insurers needed in placing a transaction can be .......
News 22 April 2024
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Barrier to entry?
SRT allocation under scrutiny
The raft of funded and unfunded buyers seeking to enter the SRT market is driving intense bidding for allocations on deals. Indeed, demand is reportedly rising even for first loss tranches, in an attempt to secure paper.
“Banks will go out to a bunch of investors with a prospective SRT trade and have them do a lot of due .......
News Analysis 19 April 2024
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Job swaps weekly: ELFA names Rinaldi as CLO investor committee co-chair
People moves and key promotions in securitisation
This week’s roundup of securitisation job swaps sees the European Leveraged Finance Association (ELFA) appoint a TwentyFour Asset Management portfolio manager as co-chair of its CLO investor committee. Elsewhere, CBRE has named its new ceo of Germany, while Hometap has hired a new director of structured products.
Elena Rinaldi has taken over from Emeric Chenebaux as the new .......
Market Moves 19 April 2024
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Moroccan debut
SOFAC launches first synthetic securitisation
Back in December 2023, SOFAC Structured Finance – a subsidiary of Moroccan consumer credit company SOFAC – and CIH Bank launched Morocco’s first synthetic Eurobond fund, following the approval of the local regulator (Autorité Marocaine du Marché des Capitaux (AMMC)). The ensuing transaction, FT SYNTHESIUM, references a portfolio of Eurobonds originated by CIH Bank and issued by the Kingdom .......
News 17 April 2024
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Not dead yet
Hope remains for a 'vibrant' Indian NPL securitisation market
Developing a vibrant secondary market in loan sales remains possible in India, despite the failure of its ‘bad bank’ National Asset Reconstruction Company Ltd (NARCL) to gain traction. The country has large volumes of bad debt and government policy is committed towards cleaning up these distressed assets. Although gross NPL volumes stood at a multi-year low of 3.2% in December .......
News Analysis 15 April 2024
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Mr Powell and the banks
B3E looks set to change, but how will it affect US SRT?
Few pronouncements by Federal Reserve chairmen have been as eagerly embraced by the financial community as those made by Jerome Powell in early March about prospects for the Basel 3 Endgame (B3E). No one was paying closer attention than banks that exploit, or want to exploit, the SRT market.
Hitherto, Powell has not emulated the gnomic bearing of .......
News Analysis 12 April 2024
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Job swaps weekly: A&O Shearman promotes two securitisation lawyers to partner
People moves and key promotions in securitisation
This week’s roundup of securitisation job swaps sees A&O Shearman announcing two new securitisation partners in its first wave of post-merger partner promotions, while an existing A&O partner leaves for Kirkland & Ellis. Elsewhere, Paul Hastings has lured two securitisation specialists from Weil Gotshal & Manges, while Campbells has added a partner in its Hong Kong practice.
Allen .......
Market Moves 12 April 2024
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Balancing act
SRT Market Update
The first quarter was notable for a number of SRT trades referencing investment grade portfolios being executed at very attractive levels (SCI 5 April). While demand arguably exceeded supply, this trend is broadly expected to even itself out during the remainder of the year.
“Supply is not generally very strong during the first quarter. In fact, it's .......
SRT Market Update 12 April 2024
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Collectibles offered
SFS debuts fine art programme
Sotheby’s Financial Services (SFS) is in the market with its inaugural 144a securitisation. Believed to be the first-ever publicly rated art loan ABS, the US$500m Sotheby’s ArtFi Master Trust Series 2024-1 transaction is backed by assets consisting primarily of loan receivables secured by works of fine art and collectibles.
In its capacity as an art financing company, SFS .......
News 12 April 2024
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Real estate finance platform formed
Market updates and sector developments
Blue Owl Capital has launched a real estate finance strategy with the acquisition of Prima Capital Advisors for the aggregate consideration of US$170m. Jesse Hom, previously global head of real estate credit at GIC, will join Blue Owl to lead the newly created strategy as cio, reporting directly to Marc Zahr, co-president of Blue Owl and head of real .......
Market Moves 11 April 2024
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Latest SRTx fixings released
Tightening in the spread and volatility indexes reflect gene...
The latest fixings for the SRTx (Significant Risk Transfer Index) have been released. Similarly to last month (SCI 6 March), there has been some further incremental tightening in the SRTx Spread Indexes. However and unlike last month’s survey responses, volatility indexes have improved.
SRTx Spread Indexes have moderately tightened in the large corporate category (-3.5% in .......
News 10 April 2024
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Skills gap?
Lack of specialist SRT talent on the market
The SRT sector is in a period of flux, with many new issuers and new investors entering the market (SCI 28 March). Although supply and demand dynamics are expected to find equilibrium in time, for the moment, there appears to be a skills gap among some players on the buy-side.
One long-standing SRT investor points out that the .......
News Analysis 10 April 2024
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Wake-up call?
NCSLT decision spurs documentation improvements
The Third Circuit’s decision last month that the National Collegiate Master Student Loan Trusts (NCSLT) are ‘covered persons’ under the Consumer Financial Protection Act (CFPA) (SCI 22 March) could potentially impact securitised products beyond the student loan ABS sector. The extent of the trusts' liability has not yet been settled, but moves to improve securitisation deal documentation are .......
News 8 April 2024
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SRT Monthly - March 2024
First significant wave of transactions of the year
Issuance overview
SRT Market Update 5 April 2024
During March, the SRT market experienced its first significant wave of transactions of the year (see SCI’s Capital Relief Trades Database). The sector saw longstanding programmes issue - such as CRAFT (Deutsche Bank) and Chakra (Standard Chartered) - as well as seasoned issuers, including Santander (with the Ducati trade) and BNP Paribas, come to the fore .......
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Blue Owl to form insurance solutions unit
Market updates and sector developments
Blue Owl Capital has entered into a definitive purchase agreement to acquire Kuvare Insurance Services (doing business as Kuvare Asset Management) (KAM) for US$750m. Separately, Blue Owl has made a long-term investment in Kuvare, purchasing US$250m of preferred equity. This investment is intended to create alignment between Blue Owl and Kuvare and provides growth capital to Kuvare’s insurance companies, each .......
Market Moves 4 April 2024
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EARN unveils 'strategic transformation'
Market updates and sector developments
The board of trustees of Ellington Residential Mortgage REIT (EARN) has unanimously approved a strategic transformation of its investment strategy to focus on corporate CLOs. The company intends to build upon its current US$44m CLO portfolio, with an emphasis on secondary CLO mezzanine debt and equity tranches.
In connection with its strategic transformation, EARN has decided to revoke .......
Market Moves 2 April 2024
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CMBS slide
Commercial real estate values falling with no bottom in sight
Collapsed commercial real estate values, which will not recover for perhaps half a decade, will drive expected losses in office loans within its rated US CMBS conduit portfolio of 7.7%, according to a new report by Fitch.
This is more than double the expected losses at time of issuance, and also well above the overall average loss of 5.2% for all property .......
News Analysis 29 March 2024
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On the up
Nordic reticence towards SRT "less pressing"
The Nordic and Baltic countries are expected to experience a “not-insignificant” increase in SRT issuance in 2024, with their somewhat self-imposed supervisory reticence towards the instrument taking a back seat amid other market drivers. Indeed, the implied supervisory concerns across the region appear less pressing now, given greater regulatory transparency around synthetic securitisation and the designation of SRTs as .......
News Analysis 28 March 2024