ABS
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Social factors
Positive ESG scores for post-crisis vintages
ESG relevance scores (ESG.RS) are more likely to be negative for seasoned securitisations, according to Fitch. The most recent issuance vintages demonstrate a balance of positive and negative ESG factors.
Weak transaction structures prior to the crisis are identified as a factor contributing to the negative ESG.RS found in those vintages. In addition, Fitch says: “Some governance issues .......
News 24 February 2020
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High-profile bankers exit SRT
Sector developments and company hires
SRT departures
Last week saw a couple of high-profile exits from SRT banking teams in London. Structuring specialist Jeremy Hermant is understood to have left Santander, while md Bob Paterson has reportedly been put at risk of redundancy at Lloyds.Spokespeople at both banks declined to comment, although the latter stated: “Whenever we make role reductions, these changes do require making difficult .......
Market Moves 24 February 2020
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Rare CMBS prepped
BofA brings 'one-off' Dutch transaction
BofA is in the market with a Dutch CMBS, dubbed Taurus 2020-1 NL. The €620.6m deal is the first from the programme to be backed solely by Dutch assets.
Rated by KBRA, the transaction comprises €324.7m triple-A rated class A notes, €98.8m double-A minus rated class B notes, €65.9m single-A minus rated class C notes, €65.9m triple-B minus rated class .......
News 24 February 2020
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Moving down
Insurers target first-loss CRTs
Insurers are now targeting the first-loss tranches of capital relief trades, having eyed the senior mezzanine tranches of dual-tranche transactions last year (SCI 22 March 2019). The better risk/return profile of first-loss tranches and an adaptation of traditional credit insurance contracts into unconditional guarantee formats are the main factors driving the development.
According to one reinsurer: “We have no .......
News Analysis 21 February 2020
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SRT fund launched
AXA engineers return
AXA Investment Managers has completed its eighth partner capital solutions fund. With the move, the firm is seeking to capitalise on diversification opportunities and volume growth in the risk transfer market.
According to Deborah Shire, global head of structured finance at AXA Investment Managers: "The reg cap market has been transformed into a full-fledged alternative investment opportunity, with .......
News 21 February 2020
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Rarity value
European ABS market update
The European ABS market remains characterised by a lack of free flow. Against this backdrop, the senior notes of the Spanish Gedesco Trade Receivables 2020-1 transaction are attracting investor interest, due to its rarity value.
“It is still very much the same tone. Generally, we are not seeing a huge amount of trading,” one trader notes.
He .......
Market Reports 21 February 2020
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Minority equity interest acquired
Sector developments and company hires
Equity interest acquired
Affiliated Managers Group has acquired a minority equity interest in Comvest Partners. The Comvest management team will be investing 100% of the transaction proceeds directly into future funds to support the firm’s growth initiatives. Following the transaction, the senior partners of Comvest will continue to own a significant majority of the equity of the business.HPI .......
Market Moves 20 February 2020
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Risk transfer round-up - 20 February
CRT sector developments and deal news
Further details have been revealed of CRT transactions that were completed in 4Q19. One is another Barclays deal from the Colonnade programme, which is a US$55m tranche that matures in December 2026.
Lloyds also returned to the market with a third Wetherby trade. Dubbed Wetherby Securities 3 2019, it comprises two tranches sized at £49.5m and £36m (see ......
News 20 February 2020Premium Content
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C-PACE fund debuts
Standalone platform leads origination
Samas Asset Management (SAM) has launched its debut fund, a closed-end vehicle dubbed SAMAS FUNDING PACE FUND LLLP Series 2020. The Samas entities are now the ‘‘largest standalone commercial PACE origination platform in the US’’.
The PACE bonds in this fund represent a diversified portfolio associated with small- and medium-sized commercial properties.
‘‘Projects that we finance generate .......
News 20 February 2020
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SME double
EIF closes pair of EFSI guarantees
The EIF has closed two new guarantee agreements supporting European SMEs, both of which are supported by the European Fund for Strategic Investments (EFSI). One is a synthetic securitisation executed with Commerzbank and the other is the extension of a COSME facility with Bank Gospodarstwa Krajowego (BGK).
Under the first agreement, the EIB and the EIF have provided .......
News 19 February 2020
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Manager discretion
Direct lending securitisations on the rise
A growing number of direct lending funds are raising debt via securitisation of their shares. A carefully considered approach is needed when assessing the credit risk of such debt, however, given the large discretion managers have to build highly non-granular investment portfolios.
Traditionally, direct lending funds have issued shares with equity-type properties to raise financing. But recent regulations .......
News 19 February 2020
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Distressed debt unit formed
Oaktree establishes Chinese subsidiary
Oaktree Capital Management has become the first foreign distressed debt manager to set up a wholly owned subsidiary in China as part of phase one of the US-China trade deal. The trade deal will allow US firms to apply for asset management company (AMC) licenses and hence purchase non-performing loans directly from Chinese banks.
At the moment, foreign .......
News 19 February 2020
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MPL acquisition to achieve 'regulatory clarity'
Sector developments and company hires
Acquisition
Market Moves 19 February 2020
LendingClub is set to acquire Radius Bancorp and its wholly owned online subsidiary Radius Bank in a cash and stock transaction valued at US$185m. The combination of Radius and LendingClub is designed to create a digitally native marketplace bank at scale, with the power to deliver an integrated customer experience. The aim is to enable consumers to both pay less .......
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Refinancing strategy
VW master trusts augment auto ABS volumes
VW’s issuance of auto ABS from master trust vehicles has been extensive, yet it seems to have largely gone unnoticed. The VCL Master vehicle alone has been tapped multiple times, for example, contributing around €2bn to European auto ABS volumes.
As of 30 September 2019, Volkswagen’s Financial Services division (except the US and Canada) had an outstanding ABS .......
News Analysis 19 February 2020
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Ares co-founder steps down from board
Sector developments and company hires
North America
Market Moves 17 February 2020
Ares Management Corporation has appointed Kipp deVeer to its board. Concurrently, John Kissick - a retired co-founder of Ares - is stepping down from the board. DeVeer, who joined the firm in 2004, is a partner and head of the Ares Credit Group. He serves as a member of the Ares executive management committee and the firm’s management .......
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ArrowMark acquires investment platform
Sector developments and company hires
Acquisition
Market Moves 14 February 2020
ArrowMark Partners has acquired the bank investment platform and assets of StoneCastle Asset Management. As a closing condition of the transaction, stockholders approved a new investment management agreement between the company and StoneCastle-ArrowMark Asset Management - a subsidiary of ArrowMark - and elected eight directors, constituting its board. Sanjai Bhonsle has been elected as the company’s ceo and chairman. .......
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Secured versus unsecured
Early-stage MPL delinquencies predictive of charge-offs
Given that a secured loan lender has the right to seize the collateral securing the loan to recoup borrowed funds, logically the borrower should be should incentivised to repay the loan. To gauge how significant a motivating factor this is, KBRA analysed loan-level performance data on 8.7 million auto loans and 7.2 million marketplace consumer loans from multiple originators, .......
News 14 February 2020
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Positive outlook
Spanish REO boost expected
The outlook for Spanish non-performing loan transactions backed by repossessed real estate appears positive for this year, thanks to new mortgage regulations that reduce bank litigation risk. However, the illiquidity of the asset class remains a challenge that can hinder recoveries and delay the foreclosure process.
Spain’s Supreme Court ruled last year that Spanish banks are obliged to .......
News Analysis 14 February 2020
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Futura placed
European ABS market update
JPMorgan has placed the re-offered Futura 2019 NPL ABS at a wider print than some market participants had been expecting. The transaction is notable for not benefitting from the Italian GACS guarantee and was retained by the sponsor Guber Banca in December (SCI 17 December 2019).
The senior tranche of the deal priced at six-month Euribor plus .......
Market Reports 14 February 2020
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Italian private market JV inked
Sector developments and company hires
EMEA
Market Moves 13 February 2020
Oxane Partners has appointed Andrew Tisdall as director, portfolio management solutions. Tisdall will report to Sumit Gupta, co-founder of Oxane, and will focus on expanding the firm’s portfolio management business in Europe. Tisdall has more than 22 years of experience in loan operations at Mount Street, Morgan Stanley and Barclays. He joins Oxane from Mount Street, where he was .......
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Risk transfer round-up - 13 February
CRT sector developments and deal news
Mediobanca is readying another capital relief trade in addition to its inaugural SRT that will close this year (SCI 7 February). The second transaction is expected to close in 2021.
...... News 13 February 2020Premium Content