ABS
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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
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Spanish SRT finalised
Santander completes full-stack auto ABS
Santander has priced a €555.5m true sale significant risk transfer transaction dubbed Santander Consumer Spain Auto 2019-1. The full-stack deal has been driven by new regulatory guidelines on excess spread and adds to this year’s healthy flow of full-stack SRT issuance (SCI passim).
The transaction consists of €440m class A notes (which priced at 45bp), €57.7m class B notes (85bp), .......
News 4 October 2019
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ILS acquisition announced
Company hires and sector developments
Acquisition announced
Artex Risk Solutions has announced that it has reached agreement to acquire Horseshoe Insurance Services Holdings., significantly strengthening its ILS operations. The transaction is subject to regulatory approval and expected to complete before the end of the year. On completion, Horseshoe will become the global brand of ILS services for Artex, which will operate as one .......
Market Moves 3 October 2019
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Nascent stages
CRT mezz investor base needs time to develop
The pace of growth of the risk transfer market is likely to be tied to the development of the synthetic mezzanine risk market, which is currently at a nascent stage (SCI 9 August). Traditional capital relief trade investors have limited appetite for mezz, as absolute returns are low, even though the risk/reward proposition is compelling.
“There is .......
News 3 October 2019
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Issuance wave
Opel and Sabadell settle first full-stack SRTs
Opel and Sabadell have settled their first full-stack significant risk transfer transactions. The true sale deals are the latest in a slew of such issuance, following the introduction of the STS framework this year (SCI 27 September).
The €900m Opel deal, dubbed E-CARAT 10, is backed by German auto loans. According to Boudewijn Dierick, head of ABS .......
News Analysis 2 October 2019
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Autumn sales
Italian NPL, UTP disposals continue apace
Illimity Bank and a Cerberus Capital Management affiliate have acquired a second unlikely-to-pay loan portfolio from Banca Monte Paschi di Siena (MPS), following a previous MPS transaction with Cerberus (SCI 2 August). Separately, UniCredit has disclosed a pair of non-performing loan transactions.
In the latest MPS transaction, the Cerberus affiliate provided the equity tranche, while illimity provided .......
News 2 October 2019
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CLO firm co-founder to retire
Sector developments and company hires
30-year CIRT debuts
Fannie Mae has completed its sixth Credit Insurance Risk Transfer transaction of 2019: CIRT 2019-3 covers US$14.8bn in unpaid principal balance of 21- to 30-year original term fixed-rate loans. The deal marks the first time a 30-year bulk CIRT transaction was structured with an extended policy term of 12.5 years and a 40bp retention layer, .......
Market Moves 2 October 2019
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ABS key to energy upgrade initiative?
Securitisation could solve efficiency projects challenge
The European Commission reports that 75% of Europe’s building stock is not energy efficient, but sourcing the capital needed for upgrade projects is challenging due to their small size. Pooling and securitising the cash flows generated from these upgrades could be a solution, although several challenges may first need to be resolved, particularly around standardisation, project aggregation and education.
Caroline Milne, .......
News Analysis 2 October 2019
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B-piece service bulks out
Sector developments and company hires
B-piece service bulks out
Greystone, has added Paul Smyth, Cary Williams, and Paul Jankovsky as mds and Robert Farrington as a director to its CMBS platform. Based in Irving, Texas, the team brings to Greystone extensive expertise in CMBS B-Piece acquisitions as well as special servicing. While originating debt for clients across all of Greystone’s lending platforms, Smyth and his team will also pursue B-Piece investment .......
Market Moves 30 September 2019
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Full-stack SRT boost
Opel, Sabadell achieve funding and capital relief
Banco Sabadell and Opel Bank last week priced respectively full stack consumer and auto ABS deals – dubbed Sabadell Consumo 1 and E-CARAT 10 – that achieve both funding and capital relief. The latest deals add to a growing trend of true sale significant risk transfer transactions, following the introduction of the STS framework.
According to Ruben van .......
News Analysis 27 September 2019
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Polish debut
STS ABS gains EIB support
PKO Leasing has closed Polish Lease Prime 1, the largest-ever Polish securitisation. The PLN2.5bn revolving lease ABS is also the first STS-eligible transaction issued on the Polish market and one of the first STS-eligible operations subscribed to by the EIB.
The cash transaction is backed by a portfolio of fully amortising lease receivables, with no residual value risk, granted mainly .......
News 26 September 2019
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Aussie auto ABS debut prepped
Sector developments and company hires
Aussie auto debut prepped
The first public term securitisation backed by collateral originated by Mercedes-Benz Financial Services Australia is marketing. The A$580m transaction is to be issued by Perpetual Corporate Trust as trustee of Silver Arrow Australia 2019-1 and is backed by a pool of commercial and consumer loan contracts backed by new and used motor vehicles, trucks .......
Market Moves 26 September 2019
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STS synthetics framework unveiled
EBA publishes landmark consultation
The EBA has published its long-awaited discussion paper on its proposals for an STS framework for synthetic securitisation (SCI 20 September). The discussion paper aims to enhance transparency and further standardise risk transfer trades - although, for the moment, STS synthetic securitisations won’t benefit from preferential capital treatment via a reduction in senior tranche risk weights.
According .......
News Analysis 25 September 2019
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US CLO firm leadership shake-up
Sector developments and company hires
CLO firm makes md appointment
MidOcean Partners has hired Natalya Michaels as md, focusing on marketing, investor relations and business development across both the private equity and credit businesses as MidOcean looks to grow the firm and expand its investor relationships. Michaels joins MidOcean with over two decades of industry experience and, most recently, she was an md at Artisan .......
Market Moves 25 September 2019
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Ceo appointed
Sector developments and company hires
Ceo appointed
CAC Specialty has appointed Michael Rice as ceo, bringing more than 25 years of experience in the insurance brokerage industry. Most recently, he served as the founding ceo and executive chairman of JLT Specialty USA. Previously, he spent more than 20 years at Aon, serving in various leadership capacities.
Morgan refis due
The August .......
Market Moves 24 September 2019
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Master trust margins amended
Sector developments and company hires
Holmes Master Trust margins amended
Moody’s comments that the proposed amendments to the 2017-1 Class A2 and 2018-1 Class A3 notes issued by Holmes Master Trust will not, in and of themselves and at this time, result in a reduction or withdrawal of all the notes ratings currently assigned to Holmes Master Issuer. The proposal is to change .......
Market Moves 23 September 2019
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Law firm nabs SF vet
Sector developments and company hires
Law firm beefs up
Orrick has hired structured finance lawyer Richard Hanson as a partner based in London. He joins from Ropes & Gray and advises on structured finance, securitisation and derivatives-based financings for funds, asset managers and investment trusts. His experience includes advising on funding structures backed by commercial real estate and other asset classes, including loan-on-loan .......
Market Moves 20 September 2019
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Investor reassurance
Spanish Supreme Court ruling assuages NPL ABS investor concerns
Spain’s Supreme Court has ruled that Spanish banks are obliged to wait until at least 12 monthly instalments are missed before initiating foreclosure proceedings on consumer mortgage contracts. The ruling should reassure investors in non-performing loan (NPL) securitisations by allowing lenders to foreclose on troubled home loans.
The guidance concerns procedures which have been lingering after early-termination clauses were declared .......
News Analysis 20 September 2019
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Credit-granting guidance outlined
"Bright-line" verification test still absent
The EBA recently published an answer to a question posed by AFME in relation to Article 9(3) of the Securitisation Regulation, pertaining to credit-granting criteria for exposures in a securitisation. While the answer provides some guidance on how those issuing securitisations may satisfy Article 9(3), it doesn’t provide a clear test for when extensive verification of credit-granting standards will .......
News 19 September 2019
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CMBS NOI slowing
Sector developments and company hires
Aircraft ratings review
Moody’s has published a new overview which examines ABS issued in the US since 2013, backed primarily by commercial aircraft and their associated leases. The report details an asset description and its structure as well as asset-related credit risks in securities backed by aircraft and related leases. In addition, Moody’s has issued a Request for .......
Market Moves 19 September 2019
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Broader base
New investors come to STS, but for what reason?
A growing number of new investors, including bank treasuries, are participating in European STS securitisations, according to panellists at KNect 365’s European Securitisation Regulation seminar today. They added, however, that there is uncertainty about whether this is due to STS or other factors, such as a lack of yield in other asset classes.
Nicholas Curmi, head of securitisation and .......
News 18 September 2019