ABS
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Federal preemption challenges continue
Sector developments and company hires
Federal preemption challenges continue
Market Moves 15 April 2021
Two US courts have heard actions that are of significance to marketplace lenders and their funding sources so far this month, Chapman and Cutler reports. In Maryland, a state regulatory action purporting to require licensing of a sponsor bank and its fintech service providers has been removed to federal court. Conversely, a California federal court has dismissed .......
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Shifting trends
Differing ESG impacts on credit quality considered
ESG considerations pose higher credit risk to certain securitisation asset classes and certain global regions, with evolving regulations and shifting consumer demand exposing transactions to potential declines in asset values or cashflow. Nevertheless, structural features, short loan tenors and asset diversification can help minimise such credit negative effects.
ESG credit considerations include a broad range of qualitative and .......
News 15 April 2021
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Income opportunities
Clayton Triick, CFA, senior portfolio manager at Angel Oak Capital Advisors, answers SCI's questions
Q: How and when did you become involved in the securitisation market?
A: Angel Oak Capital Advisors has a long history within the US securitised markets. Originally as a distressed credit investor during the global financial crisis, Angel Oak was able to invest capital targeting deeply discounted private-label RMBS.As markets continued to improve over the subsequent decade, we .......
The Structured Credit Interview 14 April 2021
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Green auto feasibility assessments underway
Sector developments and company hires
Green auto feasibility assessments underway
Market Moves 13 April 2021
CO2 emissions data reporting by auto loan lenders is likely to be crucial to classifying auto loan securitisations as ‘sustainable’ or ‘green’, in order to tap demand from ESG-oriented investors, Fitch says. However, the rating agency notes that discussions with lenders imply that creating the basis for detailed CO2 emissions reporting is challenging, as the .......
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Benchmark issuance
PPC finalises NPL ABS
Greece’s Public Power Corporation (PCC) has finalised a €325m non-performing loan securitisation backed by 90 days past due receivables. Such a benchmark transaction is highly unusual for a corporate entity and paves the way for future NPL ABS to be issued in Greece.
The landmark transaction has a total duration of five years and includes a two-year replenishment .......
News 13 April 2021
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Consumer warriors
Setback for CFPB, but warning shots at securitization market fired
The March 26 dismissal of a lawsuit brought by the Consumer Financial Protection Bureau (CFPB) against a student loan trust is good news for the securitization market, but may be only the first skirmish between it and a more bellicose CFPB.
In fact, the manner in which CFPB appears to interpret elements of the 2010 Dodd-Frank Act now means that the structured .......
News Analysis 12 April 2021
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Servicing hitch
Italian NPL ABS collections drop
Median gross collections for Italian non-performing loan securitisations in 2020 were 21% lower, compared to 2019, according to the latest estimates. The situation is further complicated due to a ban on evictions that will slow cashflows for some months. However, note sales could partially compensate for delays in judicial recoveries (SCI passim).
Starting over a year ago, European .......
News 12 April 2021
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Inclusive approach
ABCP to facilitate sustainable asset transition
An inclusive approach to transitioning assets is considered crucial to developing a functioning ESG securitisation market. In this context, ABCP is expected to play an active role in financing the move towards a low-carbon economy.
A recent AFME discussion paper - entitled ‘ESG Disclosure and Diligence Practices for the European Securitisation Market’ – notes that two elements are important for .......
News Analysis 9 April 2021
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Non-resident Aussie RMBS debuts
Sector developments and company hires
Non-resident Aussie RMBS debuts
Market Moves 8 April 2021
Brighten Home Loan is readying its inaugural RMBS - the A$250m Solaris Trust 2021-1 – which is backed by loans predominantly to non-Australian resident borrowers. S&P notes that the portfolio is not only exposed to macroeconomic events and policies that affect Australia, but also to events and policies that affect the borrowers’ countries of residence. Consequently, .......
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Collection boost?
NPL sales increase pending amid uncertain timing
European non-performing loan sales are expected to receive a boost this year, due to higher unemployment and the impact of reduced government support measures on corporates. However, the timing remains uncertain and large-scale sales could be delayed to 2022 in a downside scenario.
According to Fitch, following the initial impact of the pandemic in 2Q20 and to some .......
News 8 April 2021
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Positive prospects
Margin loan CRTs on the agenda
Credit Suisse is expected to close a capital relief trade referencing Asian margin loans this quarter (SCI 15 March), with further such transactions anticipated amid rising current and future IPO issuance. Although senior management and regulators remain to be convinced, synthetic securitisations appear firmly on the agenda as a tool for managing the capital impact of an increase .......
News Analysis 8 April 2021
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GACS NPL ABS performance eyed
Sector developments and company hires
GACS NPL ABS performance eyed
Market Moves 7 April 2021
A sum of eight new GACS non-performing loan securitisations priced in late 2020, with a cumulative balance of €3.4bn (securitising a cumulative original GBV of €13.4bn of NPLs), according to JPMorgan’s latest Italian NPL Performance Tracker report. Including these transactions, Italian NPL ABS issuance has risen to €22.1bn across 38 deals (including three non-GACS transactions), .......
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Running on fumes
New auto ABS emissions scoring gives concrete ESG evidence
KBRA’s pioneering effort to produce vehicle greenhouse gas (GHG) scores for 184 auto-loan securitizations from 22 different issuers reflects the growing demand from investors for more granular ESG data, says the rating agency.
It spent four weeks mapping the Environmental Protection Agency’s (EPA) GHG rating for each vehicle against every auto loan securitization for which sufficient loan level data exists and then .......
News 1 April 2021
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ESG endeavours
Social bonds gaining traction
Yorkshire Building Society’s recent Brass 10 RMBS marked the second social bond to hit the UK securitisation market, following Kensington’s social RMBS from February (SCI 3 February). While a ‘greenium’ has emerged for deals categorised as green, the trajectory for social bonds appears to be more nuanced, however.
“The mortgages backing the YBS deal will form part .......
News Analysis 1 April 2021
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Follow-up funding for Raiffeisen-Leasing
Sector developments and company hires
Follow-up funding for Raiffeisen-Leasing
The EIB Group has provided €200m funding to Raiffeisen-Leasing Austria via a true sale securitisation dubbed ROOF AT. The transaction’s €462.8m triple-A rated class A notes were preplaced with EIB (which subscribed to €150m) and EIF (€50m), as well as other market funding partners. Raiffeisen-Leasing Group subscribed to the €75m class B notes.The €538m .......
Market Moves 31 March 2021
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Show me the money
Debut US regional bank CRT yields too thin for traditional buyers
Traditional capital relief trade buyers would not have been attracted to the recent Texas Capital Bank deal, as the yield was insufficiently alluring, say investors.
“Libor plus 400bp is too low; we’re looking at an absolute return of 8%-12%. We’d have to use leverage to get it up to those levels and we don’t do that. This .......
News Analysis 29 March 2021