CLOs

  • US CLO stand-off

    The US CLO secondary market is caught in a supply-demand stand-off.

    "The secondary market has effectively reached stalemate," says one trader. "Levels are such that for many buyers prices are too high, but holders aren't seeing enough value or alternatives to warrant selling, so it has been very quiet over the past few weeks."

    The trader continues: "That said, the .......

    SCIWire 31 October 2017

  • Euro secondary strengthens

    Levels continue to strengthen across the European securitisation secondary market.

    October has been another month of more of the same and November looks unlikely to differ in the short term as technicals still hold sway and volumes remain relatively light. Demand continues to outstrip supply with holders unwilling to release seemingly ever-improving paper and other participants, especially dealers, very keen .......

    SCIWire 31 October 2017

  • Job swaps round-up - 27 October

    Australia

    RMS has hired Pierre Wiart as md to its Sydney office, working on client relationships and market development. He was previously principal at Convergence Partners in Sydney.

    EMEA

    Goldman Sachs has hired Alex Snow as md to its structured finance division. He was also previously md at RBS in structured finance.

    North America

    Axis Capital has hired Brad Livingstone .......

    Job Swaps 27 October 2017

  • Fresh yen repack prepped

    Another CLO is being repackaged to issue the senior notes in Japanese yen rather than US dollars. There were three repacks in August arranged by Mitsubishi UFJ Morgan Stanley Securities (SCI 16 August 2017).

    The repackaging effectively converts the repack portion of the Fortress class A notes into Japanese yen-denominated securities from US dollar-denominated securities. The expected closing date is .......

    News 25 October 2017

  • Libor replacement a "steep challenge"

    A transition to a replacement reference rate away from Libor by 2021 will be a "steep challenge" within structured finance documentation, according to S&P. The rating agency says the ultimate impact will depend on a number of factors, including whether current IBORs will be maintained for existing transactions until final maturity or whether existing transactions need to shift benchmarks.

    There .......

    News 24 October 2017

  • ABS rating effect explored

    Rating changes can have a significant impact on an ABS bond's price and value. While investors are less reliant on ratings than they were before the financial crisis, rating agencies continue to play a significant role in bond pricing.

    An analysis by TwentyFour Asset Management of the 10-year Portugal sovereign bond reveals that larger rating changes correlate to larger spread .......

    News 24 October 2017

  • ESNs 'not needed yet'

    European Structured Notes (ESNs) have been on the radar for some time and a recent Moody's analysis praises their potential to offer an additional funding tool to banks. However, it remains far from clear that the banks themselves are pushing for this new type of collateralised bond to be introduced.

    In response to the European Commission's call to find new ways .......

    News Analysis 23 October 2017

  • Job swaps round-up - 20 October

    Australia

    Baker McKenzie has recruited Duncan McGrath as a partner in its corporate group in Sydney. McGrath was previously a partner at Gilbert + Tobin, where he established and headed the firm's DCM and securitisation practice. His experience includes leveraged and general finance, peer-to-peer lending, insolvency and restructuring, blockchain and smart contracts.

    EMEA

    Orchard Global Asset Management has hired Shawn .......

    Job Swaps 20 October 2017

  • Interest growing in infrastructure

    Deutsche Asset Management subsidiary RREEF America has closed a US$431.3m managed project finance CDO, dubbed RIN. While the deal may signal growing investor interest in infrastructure and project finance debt, lack of homogeneity could hamper the growth of the asset class.

    Moody's has rated the transaction's US$262m class A notes (which priced at three-month Libor plus 150bp) Aaa, US$49.6m class .......

    News Analysis 20 October 2017

  • Swap downgrades 'justified, necessary'

    Fitch downgraded Deutsche Bank's ratings last month, stating that the bank is no longer a suitable counterparty for top rated securitisations. While the downgrade was prompted by issues relating to that bank specifically, other bank downgrades could - and, it is argued, should - follow.

    Deutsche Bank's long-term issuer default rating (IDR) was downgraded from single-A minus to triple-B plus .......

    News Analysis 20 October 2017

  • Job swaps round-up - 13 October

    Acquisition

    Navient has entered into an agreement to acquire online student lender Earnest for US$155m in cash. Earnest will continue to operate under its current brand and be led by its current management team. Navient has suspended its remaining share repurchase programme through year-end 2018 to allocate capital towards growing its education lending business and building book value. Closing of .......

    Job Swaps 13 October 2017

  • Refi success depends on timing

    Refis from the final quarter of last year appear to have pulled the trigger too early as they reduced their debt costs by less than those US CLOs that refinanced this year. While refis from 4Q16 outperformed only briefly before later once more underperforming issuance cohorts, refis from 1Q17 and 2Q17 have enjoyed outperformance without then succumbing to underperformance.

    CLOs .......

    News 11 October 2017

  • Treasury report supports securitisation

    The US Treasury has released a report recommending a number of regulatory changes that could make it easier for companies to issue and invest in securitisations. The second in a series on boosting the US financial system, the report stresses the importance of securitisation to a strong economy and suggests repealing elements of the Dodd-Frank Act and lightening other regulatory .......

    News 9 October 2017

  • Job swaps round-up - 6 October

    North America

    Roy Guthrie is to succeed JP McNeill - who is transitioning into a long-term strategy role as vice-chairman of the board - as chairman and ceo of Renovate America. Among his previous roles, Guthrie served as cfo and evp of Discover Financial Services and as president and ceo of various Citigroup businesses. Renovate America has also appointed Ari .......

    Job Swaps 6 October 2017

  • New dawn for bank funding strategies?

    The European securitisation market faces what is expected to be an "interesting" year ahead, as low-cost central bank liquidity dries up and banks adopt new funding strategies. Together with boosting primary ABS issuance, Bank of England and ECB tapering will likely impact the volume of paper being retained.

    In the UK, the drawdown periods for the Funding for Lending Scheme .......

    News Analysis 4 October 2017

  • Direct lending warehouse formed

    Bespoke Capital has established a direct lending warehouse facility, set up as a cashflow securitisation dubbed Be-Spoke Loan Funding, to fund a portfolio of loans granted to Spanish SMEs. The initial transaction portfolio - comprising 21 obligations - stands at €70.8m, with warehouse notional expected to reach €400m, as of the last drawing point.

    DBRS has assigned final ratings to .......

    News 3 October 2017

  • Risk retention capital largely deployed?

    The availability of risk retention financing has been one of the main reasons that CLO supply has outpaced most projections. Responses to JPMorgan's Q4 CLO survey suggest that US$115bn out of total risk retention capacity of US$200bn may now have been deployed.

    The survey ran from 25-28 September, with CLO debt investors accounting for more than half of respondents. CLO .......

    News 3 October 2017

  • US CLOs keep it light

    Volumes in the US CLO secondary market remain light, but spreads are still firm.

    "Not much has changed over the past month," says one trader. "The bigger issues still apply with heavy new issuance in a re-set focused market holding sway, which means secondary activity has remained a bit light."

    The trader continues: "At the same time, there have been no .......

    SCIWire 3 October 2017

  • Euro secondary sustained

    Activity levels continue to be sustained if not spectacular in the European securitisation secondary market.

    "Secondary is still fairly quiet," says one trader. "New issues are coming through at a good steady rate and occupying people's minds."

    Overall, the trader adds: "The market feels pretty firm and spreads are holding up across the board. That's being backed up by decent .......

    SCIWire 3 October 2017

  • New issue CLOs preferable?

    US CLO relative value discussions often focus on tranche level - where triple-A paper continues to be the consensus pick, despite spread tiering at the top of the US CLO capital structure compressing dramatically - but the case for new issue CLOs over seasoned paper is made less often. In current conditions, however, vintage could be a particularly relevant factor.

    News Analysis 25 September 2017

  • Toys R Us CMBS exposure gauged

    Toys R Us filed for chapter 11 bankruptcy protection this week. Several US CMBS loans are exposed to the retailer, although no store closures have been announced.

    The company filed for bankruptcy protection in an attempt to resolve US$400m of debt maturing next year. The majority of its stores remain profitable and the company says the filing will not affect .......

    News 21 September 2017
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