ABS
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Risk transfer round-up - 18 October
CRT sector developments and deal news
Nordea is rumoured to be prepping a corporate capital relief trade for this year. The Nordic lender’s last risk transfer transaction - dubbed Archean I - closed in August 2016 (see SCI’s capital relief trades database).
...... News 18 October 2019Premium Content
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ESG scores launched
New scoring system has "limited" credit rating impact
Fitch has introduced new ESG Relevance scores for structured finance and covered bonds, which communicate how material an ESG factor is to a credit decision. The agency has assigned elevated scores to approximately 18% of structured finance and covered bond transactions and programmes, although these will have limited impact as a key driver but “widespread resonance” as a credit .......
News Analysis 18 October 2019
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Best in class
SCI Capital Relief Trades Awards winners revealed
The winners of SCI’s inaugural Capital Relief Trades Awards were revealed at a ceremony last night. The selections reflect the vibrancy and innovation evident across the risk transfer market over the last 12 months and emphasise the utility of synthetic securitisation - not only as a risk management tool, but also as a way of mobilising private capital .......
News 18 October 2019
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Inaugural French ABS prepped
ABS is first SME deal from promotional bank
Bpifrance is marketing a debut €2bn SME ABS. The transaction, dubbed Bpifrance 2019-1, is a three-year revolving cash securitisation of medium to long term secured and unsecured loans to SMEs and mid-cap companies located in France and originated by Bpifrance Financement.
Bpifrance financement is the French national promotional bank responsible for the financing of companies within the Bpifrance group, with its .......
News 18 October 2019
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Positive impact
Capital allocation factor debuts
Societe Generale has completed an innovative risk transfer transaction that, for the first time, incorporates a capital allocation factor that incentivises additional positive impact finance lending. Mariner Investment Group has purchased the junior tranche of notes through its IIFC platform.
Dubbed Jupiter, the US$3.4bn transaction references more than 250 loans in over 40 countries across a variety of .......
News 16 October 2019
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Euro advisory firm boosts SF expertise
Company hires and sector developments
Euro advisory firm boosts SF expertise
Zedra has hired Rens van Hoof as head of capital market solutions out of its Amsterdam offices. He has a range of experience covering special purpose vehicles for securitisation, structures for bond issues and commodity trade finance, as well as private equity, real estate and investment funds to serve financial institutions, asset .......
Market Moves 16 October 2019
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Indian ABS soars
Sector developments and company hires
CLO business announced
AllianceBernstein has announced a new loan and CLO management business, hiring Scott Macklin to lead the effort. Macklin was previously head of research in Och-Ziff’s credit business and the new firm will be initially funded with investments from AXA Equitable Life Insurance Company, expanding on the existing relationship between AB and AXA Equitable Holdings.
Market Moves 15 October 2019
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Serbian NPL disposal plans announced
Sector developments and company hires
Associate appointed
Channel Capital Advisors has hired Pouya Jafari as an associate in London. He was previously a credit analyst at Wells Fargo, in London.
Serbian NPL disposal planned
The Serbian Deposit Insurance Agency has invited bids for the sale of a €1.82bn NPL portfolio. Letters of interest can be submitted up to 8 November and .......
Market Moves 14 October 2019
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Auto SRT finalised
Excess spread follows new regulatory guidance
Santander has completed its eighth transaction from the Kimi programme. The €799m true sale significant risk transfer deal references Finnish auto loans and, unlike its predecessor Kimi 7, excess spread in the transaction flows all the way to the bottom of the waterfall following new regulatory guidance.
Rated by Fitch and Moody’s, the transaction consists of €725.2m class .......
News 14 October 2019
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Meaningful constituent?
Perceived difference between IRB, standardised banks narrowing
Recent transactions imply that the difference between how IRB and standardised banks are perceived by capital relief trade market participants is narrowing. However, opinions vary on whether standardised banks can ever become a meaningful constituent in significant risk transfer, given the barriers to entry that remain.
Synthetic securitisation only became a viable option for standardised banks when the .......
News Analysis 14 October 2019
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Hercules sets forth
Greek asset protection scheme approved
The European Commission has announced that the Greek government’s asset protection scheme - dubbed Hercules - complies with state aid rules, thereby paving the way for its implementation. Although the non-performing loan ABS scheme is expected to raise issuance volumes and facilitate the de-risking of bank balance sheets, the Greek market needs time to ramp up its servicing capacity.
News Analysis 11 October 2019
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Framework focus
EBA synthetics paper welcomed, despite concerns
Risk transfer market participants have welcomed the EBA’s discussion paper on STS synthetics (SCI 25 September); in particular, the standardisation that it espouses for capital relief trades. However, concerns remain over the absence of any preferential capital treatment, the collateral requirements and the banning of synthetic excess spread.
Leanne Banfield, counsel at Linklaters, explains: “The discussion at .......
News Analysis 11 October 2019
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Structured finance head appointed
Sector developments and company hires
EBA’s agenda released
The EBA has published its 2020 agenda, detailing its work activities for the coming year. On the securitisation side, its work will mainly be focused on STS-related mandates. In 4Q20, the authority plans to publish recommendations regarding significant risk transfer practices, as well as the hierarchy of approaches for calculating CRR risk weights. Before then, .......
Market Moves 11 October 2019
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CRT line-up finalised
Awards ceremony to round off risk transfer event
The line-up for SCI’s 5th Annual Capital Relief Trades Seminar on 17 October has been finalised. Hosted by Allen & Overy, the event will take place at One Bishops Square, London and features for the first time an industry awards ceremony. Other highlights include a fireside chat between Clifford Chance’s Jessica Littlewood and the EBA’s Christian Moor, as well .......
News 11 October 2019
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Risk transfer round-up - 10 October
Capital relief trade sector developments and deal news
RBS is rumoured to be readying a capital relief trade backed by project finance loans. According to SCI data, this would be the issuer’s first project finance risk transfer transaction (see SCI’s capital relief trades database).
The most active issuer of project finance CRTs has been Santander. SCI data note that five out of the seven such ......
News 10 October 2019Premium Content
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Co-founder to depart
Company hires and sector developments
Co-founder moves on
BlueMountain’s co-founder and co-president Stephen Siderow is set to leave the firm, but he will continue in his current management role through the end of this year to support an orderly transition. The firm was acquired by Assured Guaranty at the start of the month and is making a number of changes to its platform, .......
Market Moves 10 October 2019
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Credit system "positive" for China SF deals
Sector developments and company hires
Credit system a positive for China SF deals
China’s plan to establish a comprehensive, nationwide credit information system by 2020 is credit positive for the country’s structured finance deals, because this system will reduce the risk of loan defaults and bolster recovery prospects, according to Moody’s. The rating agency says this development will also help break down credit information barriers .......
Market Moves 9 October 2019
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Opening up
Platform hopes to securitise global banks' trade finance assets
While trade finance assets are of growing interest to investors, due to the attractive risk-return profiles on offer, many non-bank investors are unable to easily access them, especially large institutions like pension funds. A new platform hopes to resolve this issue, however, by processing and securitising the trade finance books of multiple, major banks and so opening up the asset .......
News Analysis 9 October 2019
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Bank leaves CDS committee
Sector developments and company hires
Bank leaves CDS committee
Societe Generale has decided to leave the Credit Determinations Committee. The bank is not however scaling back in flow credit trading but, while remaining active in the market and trading CDS, it is opting for a more selective strategy in terms of sector and clients.
Firm nabs aviation vet
PwC has appointed .......
Market Moves 7 October 2019
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Rating challenges
Limited appetite for rated senior mezz
Issuers have typically refrained from seeking ratings on the senior mezzanine tranches of dual-tranche capital relief trades, due to stricter eligibility criteria, cost considerations and the fact that most SRT investors don’t need ratings. Nevertheless, rating senior mezzanine tranches is one way of attracting new investors to the sector (SCI 26 January 2018), thereby helping to expand the .......
News Analysis 7 October 2019
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Risk transfer round-up - 4 October
Capital relief trade sector developments and deal news
HSBC is rumoured to be readying a corporate capital relief trade for 4Q19. According to SCI data, the lender’s last risk transfer transaction was completed in December 2015 and was dubbed Metrix Portfolio Distribution (see SCI’s capital relief trades database).
...... News 4 October 2019Premium Content