ABS
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Synthetic slew
CRT issuances hit before year-end
A slew of synthetic securitisations have hit the market before year-end. The risk transfer issuances include a trio of EIF financial guarantees, one of which is supported by blockchain technology, and a pair of Colonnade deals.
The blockchain transaction – which marks the first time a corporate loan securitisation has been executed via distributed ledger technology in the .......
News 21 December 2018
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Inaugural post-crisis CLO prepped
Sector developments and company hires
CLO manager comeback
AIG is marketing its first BSL CLO since the financial crisis, totalling US$503.15m. Dubbed AIG CLO 2018-1, the transaction is provisionally rated by Morningstar as triple-A on the US$296.5m class A notes. It does not have ratings on the rest of the notes.
Fairhold development
Fairhold Securitisation Limited has issued a notice that the new respondents, as .......
Market Moves 21 December 2018
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Disclosure draft not endorsed
EC refuses to endorse draft technical standards
The European Commission has stated that it only intends to endorse the draft technical standards on disclosure requirements, under the EU Securitisation Regulation prepared by ESMA, once certain amendments have been made. Market participants have suggested that this was not unexpected and could in fact buy more time for firms to install the necessary systems required to comply with reporting standards, when .......
News 20 December 2018
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Consumer SRT completed
Santander opts for true sale format
Santander last month priced Kimi 7, a €665.3m true sale significant risk transfer transaction that securitises a portfolio of Finnish auto loans. The deal was executed for both capital relief and liquidity purposes, with the bank selling both the mezzanine and senior tranches.
Compared to previous Kimi deals, mezzanine investors don’t benefit from any excess spread. According to .......
News Analysis 19 December 2018
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Japanese dependence
European ABS market update
European ABS markets have effectively closed for the year. Deals in the pipeline are now expected to price in early 2019.
Looking ahead to 1Q19, one trader comments: “For UK buy-to-let and non-conforming RMBS, activity will depend 100% on what happens with Brexit. Unless we have more clarity about how Brexit will play out, investors are going to be .......
Market Reports 19 December 2018
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ILS ventures launched
Sector developments and company hires
ILS
Rewire Holdings and Vida Capital have announced the formation of Merion Square Capital, a joint venture which combines the two companies. The asset manager has established an open-ended fund structure which will primarily invest in ILS with an emphasis on property and casualty insurance, as well as annuities and mortality-related products. Merion Square will be led and .......
Market Moves 19 December 2018
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Programmatic issuance
UBI Banca completes second CRT
UBI Banca has completed its second-ever capital relief trade, paving the way for more programmatic issuance in the future. Dubbed UBI RegCap2, the €100m financial guarantee references a €2.2bn portfolio of secured and unsecured Italian SME and corporate loans.
According to Simone Tufo, head of capital strategy at UBI Banca: “We intend to proceed with more programmatic issuance, .......
News 19 December 2018
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New frontiers
SF group uses innovative methods to provide private debt financing
REYL Group recently established a new structured finance department as part of the Corporate Advisory and Structuring (CAS) group. It has a heavy focus on private debt - mainly on a secured and securitised basis - to facilitate funding across a range of asset classes and jurisdictions, including initial transactions in commodities and project finance.
Ante Razmilovic, who joined .......
Provider Profile 18 December 2018
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Deal delay?
European ABS market update
A trader reports that nothing has been heard of the Alhambra SME Funding 2018-1 deal, which “should have been done and dusted by now” as the only European ABS left in the pipeline. The trader suggests that the transaction may have been postponed until 1Q19, despite it being announced in June (SCI 21 November).
He says: .......
Market Reports 18 December 2018
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Cerberus explores RMBS options
Sector developments and company hires
Granite alternatives
Cerberus European Residential Holdings is exploring strategic alternatives with respect to the mortgage loans held in the Towd Point Mortgage Funding 2016-Granite1 and 2016-Granite2 RMBS, which will become eligible for optional redemption from April and May of 2019 respectively. The firm has engaged Morgan Stanley and Bank of America Merrill Lynch as its financial advisors to .......
Market Moves 17 December 2018
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Wetherby 2 completed
SONIA-linked synthetic securitisation debuts
Lloyds has completed a £142.5m 7.25-year financial guarantee referencing a £1.5bn UK commercial real estate portfolio. Dubbed Wetherby 2 Securities 2018, the transaction is the first synthetic securitisation to reference the new SONIA interest rate benchmark and the third structured as a dual tranche trade (SCI 26 January).
The £82.5m first loss tranche (0%-5.5%) pays SONIA plus ......
News 17 December 2018Premium Content
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Landmark transaction launched
UK RMBS is first securitisation tied to SONIA rate
The first securitisation with liabilities tied to the Sterling Overnight Index Average (SONIA) rate has been issued by Lloyd’s Bank, which is opting to retain the deal. The £7.6bn transaction, dubbed Elland RMBS 2018, is backed by owner-occupied residential mortgages in England and Wales, originated by Bank of Scotland under the Halifax brand.
While the assets in the transaction are .......
News 17 December 2018
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ABSPP plans published
Sector developments and company hires
APP reinvestment set
The ECB has outlined the technical parameters for the reinvestment of the principal payments from maturing securities purchased under its asset purchase programmes after net asset purchases cease at end-December 2018. It expects to reinvest ABSPP redemptions back into the ABS market and CBPP3 redemptions back into the covered bond market. The bank says it will aim .......
Market Moves 14 December 2018
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JV trend continues
Landmark NPL transactions agreed
Banco BPM announced this week a non-performing loan securitisation with Elliott International and Credito Fondiario for a nominal value of €7bn-€7.8bn, while Intesa Sanpaolo and Intrum completed a similar transaction last week. The agreements involve the sale and co-ownership of servicing platforms, which is part of a broader trend in Italian NPL disposals.
According to Massimo Famularo, board .......
News Analysis 14 December 2018
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STS guidelines published
Sector developments and company hires
P2P head hired
Dynamic Credit has hired Giles Andrews as chairman of its supervisory board. The board will have three members and serves to strengthen the corporate governance of Dynamic Credit Group (DCG), which comprises of the asset manager and direct lender Dynamic Credit and the investor servicing platform LoanClear. Andrews is co-founder of Zopa and, in addition to his .......
Market Moves 13 December 2018
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Concerns ignited
Wildfire peril pricing questioned
ILS market participants are re-evaluating whether the pricing of wildfire risk in catastrophe bonds is adequate, after the 8 November US wildfires caused between US$9bn-US$13bn worth of damage. However, the picture is likely to only become clear over 2019 as the claims are counted and the full scale of loss across multiple perils is measured.
“It has generally ......
News Analysis 13 December 2018Premium Content
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Libor consultation launched
Sector developments and company hires
ILS
Peak Reinsurance Company has launched Asia’s first sidecar transaction via a new Bermuda-domiciled special purpose insurer, Lion Rock, to provide collateralised retrocession for part of Peak Re’s global property reinsurance risk portfolio. The establishment of this special financial structure, referred to as a “reinsurance sidecar”, allows investors to take on the risk and benefit from specific books .......
Market Moves 11 December 2018
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Risks remain
Termination risks persist for SF transactions in no-deal scenario
Contingency plans being implemented by financial institutions will help to avoid many derivatives risks associated with a no-deal Brexit, according to a report from Fitch. However, termination risks still persist for structured finance transactions, should issues around uncleared derivatives not be mitigated.
As it stands, a no-deal Brexit would result in a lapse of EU authorisation for UK financial services, .......
News 10 December 2018
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Corporate finance partner hired
Sector developments and company hires
CDO manager transfer
Dock Street Capital Management has replaced Deerfield Capital Management as collateral manager for the Buckingham CDO II and III ABS CDOs. Under the terms of the appointment, Dock Street agrees to assume all the responsibilities, duties and obligations of the collateral manager under the indenture. Moody's has confirmed that the move will not result in .......
Market Moves 7 December 2018
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Bid scarcity
European ABS market update
A major UK bank is focusing efforts of European NPLs in the coming weeks, as spreads continue to widen in the CLO and ABS primary markets.
“We are running a few private processes, which are keeping us busy, and we will hopefully conclude them over the next couple of days,” says a trader.
The trader comments that .......
Market Reports 7 December 2018
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BTL securitisation planned
Sector developments and company hires
Europe
Accunia has promoted Mads Romild as head of Accunia’s CLO platform. Romild will continue as cio and head all Accunia investment strategies. Andres Garcia Bartolome and Rajiv Thaker are also promoted to senior portfolio managers and will be responsible for the portfolio management of the three existing and all new Accunia CLOs. Romild previously held a position as chief portfolio .......
Market Moves 6 December 2018