ABS
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NPL SRT inked
Hoist Finance tackles backstop regulation
Hoist Finance has sold a €225m portfolio of Italian unsecured non-performing loans via an unrated securitisation to a fund managed by CarVal Investors. The significant risk transfer transaction is mainly carried out for capital relief purposes and will be followed by future NPL ABS deals.
The SPV will fund 95% of the net purchase price of the receivables .......
News Analysis 1 August 2019
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Affordable loan credit insurance risk transfer closed
Sector developments and company hires
Affordable CIRT closed
Fannie Mae has executed a new credit insurance risk transfer (CIRT) transaction that, for the first time, covers a pool of primarily single-family affordable loans. These covered loans are delivered to Fannie Mae with a short-term lender repurchase obligation, provided primarily by state housing finance agencies, which serves as the initial loan credit enhancement. Dubbed CIRT LR .......
Market Moves 31 July 2019
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New podcast now live
The operational steps to setting up a CRT and more...
In this week's podcast, the team discuss the operational steps taken when putting together a capital relief trade, as well as some of the concerns surrounding disclosure requirements in securitisation and capital relief trades. It then rounds off with an insight into the recent securitisation from impact investor, ResponsAbility, which helps fund small businesses in emerging markets, throughout the globe.
News 31 July 2019
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Turning point
Catastrophe bonds could see a redirection of spreads
The past two years of record-breaking reinsurance losses, along with technically-driven spread widening, have hampered the catastrophe bond market. Now, as this year’s hurricane season plays out, the market stands at what could be a turning point.
2017 was the most expensive year ever for the reinsurance industry, thanks to major losses from Mexican earthquakes, Hurricanes Harvey, Irma .......
News Analysis 31 July 2019
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Winding up order issued for Clifden
Company hires and sector developments
Clifden wind up
A winding-up order has been issued by the High Court of Justice of the Isle of Man, Chancery Division in respect of Clifden IOM No.1 and PricewaterhouseCoopers has been appointed official receiver of the firm. The move follows a Part 8 claim issued by Clifden, naming RMAC No. 1 series 2006-NS1, 2006-NS2, 2006-NS3, 2006-NS4 and 2007-NS1 .......
Market Moves 29 July 2019
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BMO SRT launched
BMO expands mid-market exposure
Bank of Montreal (BMO) has completed a five-year financial guarantee that references US and Canadian senior secured and unsecured corporate loans. Dubbed Manitoulin USD Algonquin 2019-1, the transaction differs from previous Manitoulin deals due to the additional numbers of mid-sized corporate borrowers in the portfolio.
The risk transfer trade features a replenishment period and complies with risk retention rules. .......
News 26 July 2019
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Mortgage firm completes residuals sale
Company hires and sector developments
Residual sale
Charter Mortgages is set to sell its residual economic interest in the Precise Mortgage Funding 2019-1B RMBS to JPMorgan - which managed the sale process and purchased the RC2 certificates for onward sale - for a cash consideration of £6.2m. The transaction is expected to complete on 31July and will generate a pre-tax gain of £28.8m and a .......
Market Moves 26 July 2019
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Funding trade
Trade finance fund utilises securitisation technology and assets
Finance securitisation specialist Channel Capital Advisors has launched its first trade finance fund. The fund is structured utilising securitisation technology and also invests in the instruments.
Paul Wilson, cio at Channel, says: “We have been looking to launch this for a number of years, but now we have a well-established track record in trade finance and customer confidence, the time .......
News 25 July 2019
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Making an impact
Debut impact ABS provides finance to EM microfinance & SME lenders
ResponsAbility Investments has closed its debut US$175m impact securitisation, backed by loans to 26 microfinance and SME finance firms in emerging markets across the globe. Arranged by JPMorgan, with initial capital from the Overseas Private Investment Corporation (OPIC), the transaction is set to be the first of many from the firm, with hopes of it also being replicated by .......
News Analysis 25 July 2019
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Risk transfer round-up - 24 July
CRT sector developments and deal news
Banca Popolare dell ‘Alto Adige is believed to be readying a capital relief trade that is expected to close in 4Q19. The transaction would be the bank’s first risk transfer transaction and is riding a wave of Italian securitisation issuance (SCI 24 July).
Indeed, as part of the same trend, BNP Paribas completed its debut Italian auto .......
News 24 July 2019
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Italian renaissance?
Spike in new issuance supported for now
The uptick in Italian ABS/MBS primary issuance in the past month or so gives the impression of a long-awaited re-start to the market. However, while there are a range of factors supporting the trend, old concerns remain.
Despite the flurry of deals recently, the total volume of Italian securitisations this year to date is actually slightly down .......
News Analysis 24 July 2019
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Esoteric ABS head announced
Sector developments and company hires
Esoteric ABS head named
MUFG has hired Keith Allman as md and head of esoteric ABS, effective August 14 and he will be responsible for the coverage of all US esoteric ABS assets. Allman brings 17 years of structured-finance and aviation experience as a banker at Deutsche Bank and Citigroup, and most recently as an investor at Loomis Sayles & .......
Market Moves 23 July 2019
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First-mover disadvantage
NPL ABS downgrade structurally specific
Scope Ratings has downgraded Elrond NPL 2017 after a performance review. The move appears to be a deal-specific one, as most European non-performing loan ABS deals are performing as expected.
David Bergman, md and head of structured finance at Scope Ratings, explains: “Elrond has been consistently below expectations in terms of timing for the collections and that is .......
News 23 July 2019
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Rights firm hits play on ABS debut
Unusual securitisation backed by music rights collateral
SESAC, a music rights firm acquired by Blackstone in 2017, is marketing an inaugural whole-business securitisation. Dubbed SESAC Finance 2019-1, the US$560m transaction is structured by Guggenheim and secured by music affiliate agreements, license agreements and software and intellectual property of the SESAC Group.
The transaction has been assigned provisional ratings by Morningstar and KBRA of triple-B/triple-B minus on the .......
News 23 July 2019
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ABS head named
Company hires and sector developments
Euro ABS head appointed
Santander has hired Francesco Dissera as head of continential Europe, securitisation, based out of Milan. He was previously md and partner, head of structuring and advisory at StormHarbour.
PM appoitment duoble
Man GLG has hired Patrick Kenney and Santiago Pardo as portfolio managers to its credit business in London. Prior to this, Pardo worked in credit .......
Market Moves 22 July 2019
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Revving up
Italian auto SRT completed
BNP Paribas has completed a €950m significant risk transfer transaction of Italian auto loans. Dubbed AutoFlorence 1, the true sale securitisation is the bank’s first post-crisis Italian capital relief trade.
According to Boudewijn Dierick, head of ABS markets at BNP Paribas: “We successfully passed both phases of the SRT tests. First, there’s the SRT tests, where you have .......
News 22 July 2019
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Offshore investment in Chinese ABS soars
Investors find relative value in second largest ABS market
Foreign investment in the Chinese ABS market is increasing exponentially, as routes to entry have been eased by developments such as the Bond Connect platform and the presence of ratings from international agencies. With issuance volumes in 2018 of around US$300bn, China is now the second largest global ABS market after the US and is seeing a broadening range of deals which .......
News Analysis 22 July 2019
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Co-ceo named
Sector developments and company hires
Co-ceo named
Värde Partners has named Ilfryn Carstairs as co-ceo, alongside co-founder George Hicks, effective from 1 January 2020. Hicks intends to transition to an executive chair role in 2022. Carstairs will retain his role as partner and global cio, overseeing the firm’s global investment strategy and co-chairing its investment committee. Based in Singapore since 2017, he joined Värde Partners .......
Market Moves 19 July 2019
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Squaring the circle
CRT issuers struggling with borrower anonymity
Capital relief trade issuers are attempting to anonymise loan-by-loan data in transactions, while simultaneously complying with ESMA’s requirement to disclose such data as part of the new securitisation regulation (SCI 22 February). Market participants are concerned that unless regulators address this tension, it could cause a breach of confidentiality provisions.
According to one legal expert: “The problem is more .......
News Analysis 19 July 2019
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Secondary pick-up?
Aircraft ABS E-notes proliferate, despite residual value risks
Equity participation in aircraft ABS is picking up, following the execution of transactions with broadly syndicated E-notes, aimed at creating a liquid secondary market. However, the market may be underestimating residual value risk.
Aircraft equity notes have historically been an illiquid investment, with only the senior ABS tranches broadly offered to investors. “Residual value is important for .......
News Analysis 19 July 2019
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Risk transfer round-up - 19 July
CRT sector developments and deal news
Monte dei Paschi di Siena is rumoured to be prepping an Italian SME significant risk transfer transaction for 4Q19. The securitisation would be the lender’s first capital relief trade.
....... News 19 July 2019