ABS
-
STS not yet 'embraced'
Ambiguity stifling STS label success
Uptake of the STS label has been tentative and cannot be credited with the current strong momentum in the European ABS sector. This is according to some market participants, which also suggest that greater investor support may be needed for the STS label to flourish.
Sam Ellis, svp at Maples Group, comments: “ESMA publishes all STS compliant transactions but it .......
News Analysis 31 May 2019
-
Pillar prepped
Public Greek NPL ABS debuts
DBRS has provided the first public rating for a non-performing loan securitisation in Greece as the market awaits European Commission approval for the HFSF’s asset protection scheme. Dubbed Pillar Finance, the transaction is backed by a €2bn portfolio of principally secured residential mortgage NPLs.
Alessio Pignataro, svp at DBRS, notes: “The transaction has a double-B rating, so it .......
News Analysis 31 May 2019
-
NPL securitisations eyed
Fire, StormHarbour JV granted license
Greek authorities have granted a license to EuPraxis, the joint venture between Italian servicer Fire and StormHarbour. It is the first cross-asset licence for an independent servicer and non-performing loan securitisation will be a key area of focus.
George Kofinakos, md at StormHarbour and chairman of the board at EuPraxis, states: “Fire and StormHarbour have decided to combine .......
News Analysis 31 May 2019
-
Indian RMBS market in the works?
Sector developments and company hires
Alt sales head hired
Schroders has hired Peter Arnold to lead its alternative sales unit, which was established last year and focuses on the distribution of the firm’s private assets investment offering, which includes ILS and securitised credit. He reports to Schroders global head of distribution John Troiano and global head of private assets Georg Wunderlin. Arnold was .......
Market Moves 30 May 2019
-
SCI podcast - episode 7 now live
All the most pressing topics in structured finance discussed
The latest edition of the SCI podcast is now live. This month, we take a look at servicing within subprime auto ABS and also how consolidation is becoming a running theme, with several acquisitions of smaller, regional issuers’ portfolios having been witnessed recently.
As well as this, the podcast explores the student loan crisis in the US, asking the question, will servicers .......
News 30 May 2019
-
Agency acquisition announced
Sector developments and company hires
Agency acquisition
Morningstar has entered into a definitive agreement to acquire DBRS, the world’s fourth-largest credit ratings agency, for a purchase price of US$669m. The combination of DBRS with Morningstar Credit Ratings’ US business will expand global asset class coverage and provide an enhanced platform for providing investors with leading fixed-income analysis and research. Morningstar intends to fund the transaction with a mix of .......
Market Moves 29 May 2019
-
MPL ABS dissected
Rating agencies clash over sector
US marketplace loan (MPL) ABS transactions have seen steadily declining credit enhancement (CE) that isn’t justified by performance on the transactions or other factors, according to a recent comment from Fitch. Coming out in defence of the sector, KBRA says that it has seen considerable improvements over a number of years and that this has led to widespread acceptance among .......
News 29 May 2019
-
Interpretation issues
Credit Suisse completes capital relief trade
Credit Suisse has completed its first capital relief trade of the year, dubbed Elvetia Finance series 2019-1. The Sfr336m eight-year CLN references a Sfr5.6bn Swiss SME portfolio and is a replacement trade for Elvetia Finance series 2016-1, following the call of the transaction in May (see SCI’s capital relief trades database).
The deal attracted healthy investor interest .......
News 29 May 2019
-
Investible assets
Trade finance solution to enable institutional access
Allianz Global Investors and HSBC are collaborating on a programme designed to make trade finance easily accessible to institutional investors. Dubbed Starts, the solution utilises securitisation technology to wrap loans into investible notes.
Although banks collectively provide almost US$10trn of trade finance to companies annually, the small secondary market for these assets - estimated at about US$300bn - .......
News 29 May 2019
-
STS SRTs pending
EBA to publish discussion paper on synthetic criteria
The EBA is set to publish a discussion paper on STS criteria for synthetic securitisations in September, which is expected to further facilitate significant risk transfer through provisions for excess spread and triggers from pro-rata to sequential amortisation (SCI 22 June 2018). However, uncertainty over the risk weights for retained tranches persists.
EBA sources believe that the .......
News Analysis 29 May 2019
-
Co-cio and liquid markets head appointed
Company hires and sector developments
Credit expert poached
Crestline Investors has appointed Michael Aingorn as an md, based in New York and reporting to Keith Williams, managing partner - credit strategies. Aingorn was previously a partner at American Industrial Partners, where he helped launch the firm's credit opportunities strategy focused on investing in North American-based middle-market industrial companies. Prior to AIP, he worked at BTG .......
Market Moves 24 May 2019
-
LeaseCo boost
Foundation laid for leasing NPL ABS
Amendments to Italy’s securitisation law are expected to boost securitisations of non-performing leasing assets, with at least two transactions being readied for this year. Leasing NPL securitisations are rare, with the underlying assets of most NPL ABS being either corporate or SME loans.
Annalisa Dentoni-Litta, partner at Orrick, explains: “The amendments allow for the creation of ancillary SPVs .......
News Analysis 24 May 2019
-
Risk transfer round-up - 24 May
CRT sector developments and deal news
Santander is believed to be readying a capital relief trade consisting of auto loans for 2Q19. The Spanish lender’s last auto risk transfer transactions were closed in November and December of last year (see SCI’s capital relief trades database).
In November 2018, the bank completed KIMI 7, a €665.3m true sale securitisation of Finnish auto loans. In December, Santander .......
News 24 May 2019
-
Positive performance prompts upgrades
Sector developments and company hires
Director hired to rebranded CLO platform
DFG Investment Advisers has hired John Hwang as a director and senior credit analyst on its leveraged credit team, responsible for analysing below-investment grade credit with a focus on leveraged loans for the Vibrant CLO platform. Hwang has 18 years of experience in the financial services industry and was previously an svp at Crescent .......
Market Moves 22 May 2019
-
Real estate upside
National Bank of Greece opts for NPL ABS
The National Bank of Greece intends to securitise €3bn of non-performing mortgage loans by 2022. The securitisation option would allow the bank to benefit from any real estate upside and follows revelations of a government programme for the subsidising of mortgage NPL payments (SCI 22 February).
“Securitisation would allow the bank to retain some senior exposure and therefore benefit .......
News 20 May 2019
-
Goodwill hunting
Higher recoveries from Interserve insolvency expected
Interserve became the second UK outsourcer to suffer a credit event in a risk transfer transaction, following Carillion's liquidation last year (SCI 27 March). The former company's recoveries are expected to be higher than the latter's, given that it is in administration and owns some profitable subsidiaries. Nevertheless, both insolvencies raise questions as to how capital relief trade market .......
News Analysis 20 May 2019
-
UK CMBS loan defaults
Company hires and sector developments
Euro CMBS 2.0 default
Elizabeth Finance 2018 has become the second European CMBS 2.0 deal to suffer a loan EOD, after the Maroon Properties were valued at £86m - a decrease of £18.7m from the initial valuation in November 2017 – triggering an LTV covenant breach. Based on the updated valuation, the Maroon LTV is 77.7%, whereas the Maroon obligors .......
Market Moves 20 May 2019
-
CLO director nabbed
Company hires and sector developments
Europe
Hermes Investment Management has hired Kevin Roche as a director for private debt and CLOs. Reporting to the head of direct lending, Laura Vaughan, Rochewill be based in London and will work across the private debt platform. He was previously a director at Allied Irish Banks, where he was responsible for delivering leveraged finance loans to mid-market private .......
Market Moves 17 May 2019
-
US student loan sector 'in crisis'
Servicers 'unlikely' to handle big rise in distressed loans
The US student loan ABS sector continues to be dominated by deals backed by FFELP loans, while the growing number of private student loan securitisations continue to perform well, providing investors with comfort in the asset class. Despite this, some regard the US$1.5trn student loan sector as being ‘in crisis’, particularly for borrowers and also with regard to servicers that may struggle .......
News Analysis 17 May 2019
-
Promising prospect
Synthetic UTPs contemplated as IFRS 9 hedge
Synthetic securitisations referencing unlikely-to-pay loans are a more promising prospect than synthetic securitisations of NPLs, given their potential as an IFRS 9 hedge, according to panellists at SCI’s recent NPL securitisation seminar in Milan. However, regulatory challenges and the issue of defining UTPs and credit events remain open questions.
One regulatory challenge is that, under current regulations, synthetic .......
News Analysis 17 May 2019
-
Seeking refuge
NPL securitisation disclosed
Hoist Finance has confirmed in its latest 2019 interim report that it will securitise part of its non-performing loans, due to regulatory demands for higher risk weights for purchased defaulted assets. The securitisation option is unusual for debt collectors, given that they have to surrender some of the upside on their defaulted assets to third-party investors and - unlike .......
News Analysis 16 May 2019