ABS
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Holding firm
European ABS/MBS market update
Primary and secondary European ABS/MBS activity is expected to pick up this week after a few slow days. Last week, ABS spreads held firm and were able to maintain a certain pre-summer equilibrium, which could further translate into November.
“We’ve seen strong levels of issuance lately, mainly in the ABS space through auto and leasing deals,” notes one .......
News 3 November 2021
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SLM EODs eyed
Sector developments and company hires
Fitch has downgraded from single-B to double-C the outstanding class A4 and B notes of SLM Student Loan Trust 2007-7, 2008-1 and 2008-4, due to the legal final maturity date of the class A4 notes being approximately three months away in January 2022 for SLM 2007-7 and 2008-1 and less than 10 months .......
Market Moves 2 November 2021
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Matryoshka doll?
Use of proceeds proving contentious for ESG securitisations
The EU taxonomy regulation and Sustainable Finance Disclosure Regulation (SFDR) are posing challenges for securitisation issuers and investors. For now, use of proceeds remains the most contentious issue.
Announced in late 2019, the European Green Deal reflects the EU’s ambitious bid to lead the world on climate action. The deal’s commitments became legally binding by the entry into .......
News Analysis 1 November 2021
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Positive prospects?
Legal changes open up Turkish NPL opportunities
Recent amendments to Turkish law potentially open doors to international investors seeking opportunities in the Turkish non-performing loan market. However, although activity could pick up in the unsecured space, questions remain about secured and lumpy pools.
Under the legislative changes, asset management companies (AMCs) may establish funds to issue ABS. Indeed, by doing so, AMCs have now been .......
News Analysis 29 October 2021
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Securitisation stamp duty eyed
Sector developments and company hires
Securitisation stamp duty eyed
Market Moves 29 October 2021
The UK government is introducing legislation within Finance Bill 2021-22 that provides a power to make stamp duty and stamp duty reserve tax (SDRT) changes relating to securitisations and ILS by secondary legislation. The power will be a freestanding provision and will allow HM Treasury to make regulations to provide that stamp duty or SDRT is .......
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Risk-sharing remit
CRT definitions discussed
Most practitioners agree that ‘risk-sharing transactions’ is the most appropriate moniker for capital relief trades, but there remains some divergence around the term. This CRT Premium Content article explores what it means for investors and issuers alike.
The term ‘risk-sharing transactions’ is becoming more common and more widely understood to denote capital relief trades, but divergences remain around what ......
News Analysis 29 October 2021Premium Content
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Rocky road ahead
Output floor implementation questioned
The European Commission has approved the long-awaited CRR3 proposal (SCI 28 October). The latest changes to the capital requirements regulation incorporate the final December 2017 Basel 3 rules into EU law. Nevertheless, banks will likely oppose the Commission’s single stack approach to the implementation of the output floor, with the industry already having called for further adjustments to the .......
News Analysis 29 October 2021
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Healthy Hertz
Securitization key to Hertz's near-fatal collapse and its resurrection
Hertz this week (October 26) announced an order for 100,000 new Tesla electronic cars for its rental fleet less than four months after it emerged from Chapter 11 bankruptcy protection - a purchase which pushed the market valuation of Tesla to over $1trn.
The news is testament to both the rapidity and comprehensiveness of Hertz’s recovery from the dark days of May .......
News Analysis 28 October 2021
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Still strong
European ABS/MBS market update
In a quieter week than of late, two full capital stack deals have been competing for investor attention in the European ABS/MBS primary market. Strong demand for both Pixel 2021 and SC Germany Consumer 2021-1 suggests that the market is still strong.
“I think both deals have been executed very well,” notes one ABS/MBS trader. “For SC Germany Consumer .......
News 28 October 2021
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Polish return
Rare lease securitisation completed
Europejski Fundusz Leasingowy (EFL), owned by Crédit Agricole, has completed a rare Polish true sale securitisation. Dubbed EFL Lease ABS 2021-1, the PLN2.15bn transaction has a three-year revolving period and is backed by a portfolio of leases extended to Polish retailers and SMEs (accounting for 99.5% of the pool) and a small portion to large corporate borrowers (0.5%).
News 28 October 2021
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New banking rules
Sector developments and company hires
The European Commission has adopted new EU banking rules under CRR 3 and CRD 4, with the aim of ensuring that EU banks become more resilient to potential future economic shocks, while contributing to Europe's recovery from the Covid-19 pandemic and the transition to climate neutrality. The Commission notes that while the overall level of capital .......
Market Moves 28 October 2021
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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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