Capital Relief Trades
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Revised stance
Parliament backtracks on structural features
The European Parliament’s Economic and Monetary Affairs Committee (ECON) has approved the inclusion of time calls and pro-rata amortisation for STS synthetic securitisations, as part of a review of the European Commission’s ‘quick fix’ proposals (SCI 31 July). The committee had initially suggested an exclusion of these features from the final framework, but revised its stance last month .......
News 11 November 2020
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Synthetic CMBS eyed
Pension funds target CRE CRTs
Pension funds are targeting synthetic securitisations of commercial real estate loans, despite the challenges of the Coronavirus crisis (SCI 9 July). However, going forward, portfolio composition will be key for real money investors.
According to Chris Redmond, head of manager research at Willis Towers Watson: “Since mid-July, the screamingly cheap has gone and so now we are .......
News Analysis 6 November 2020
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Storming STACR
Freddie Mac shrugs off the lockdown effect to go to town in 3Q and since
Freddie Mac's new CRT issuance credit-protected more unpaid principal mortgage balance at a higher maximum coverage in 3Q 2020 than in any other quarter since it began reporting these numbers, according to Mike Reynolds, vice president of single family CRT at the GSE.
It is striking that this should have occurred in a quarter when market uncertainty occasioned by Covid .......
News 5 November 2020
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Risk transfer round-up - 2 November
CRT sector developments and deal news
BDK has priced its seventh full-stack capital relief trade from the Red & Black Germany programme. The transaction is broadly in line with R&B Six, but changes have been made to the composition of the portfolio and payment triggers (SCI 23 October).
The €935m class A notes pay one-month Euribor plus 70bp, the €25m class Bs pay .......
News 2 November 2020
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Risk transfer boost
US CRT market picks up
SCI publishes regular in-depth analysis of trends and developments across the capital relief trades market, in addition to our usual news output. In this latest CRT Premium Content article, we investigate US banks' attempts to manage coronavirus-related higher capital requirements via capital relief trades.
To upgrade your subscription to access all CRT premium content for a year, .......
News Analysis 29 October 2020
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Pan-European logistics CMBS prepped
Sector developments and company hires
Pan-European logistics CMBS prepped
Blackstone Real Estate Partners is in the market with a €318.6m single-loan pan-European CMBS. Dubbed Pearl Finance 2020, the transaction is secured by 61 predominantly last-mile logistics assets across Denmark, Finland, France, Germany, Ireland and the Netherlands.The assets are valued by Cushman & Wakefield at €576.9m, as of 31 July 2020. Portfolio occupancy currently .......
Market Moves 28 October 2020
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Risk transfer round-up - 26 October
CRT sector developments and deal news
RBS is believed to be prepping a corporate capital relief trade that is expected to close in 4Q20. The UK lender’s last significant risk transfer transaction settled earlier this year and referenced project finance loans (SCI 31 January).
....... News 26 October 2020
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Corona kickstart
Constellation of factors coalesced to push the US CRT market forward
Covid 19 may have given the US CRT market the kick start it needed, suggests David Felsenthal, a New York-based partner at leading global law practice Clifford Chance.
“Coronavirus has underlined the value of capital. People are sensitive to the fact that they might need capital going forward, and CRT gives you capital relief,” he says.
Over the past seven or eight months, .......
News 23 October 2020
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Environmental risk score rolled out
Sector developments and company hires
CMBS environmental risk score rolled out
Market Moves 23 October 2020
Trepp has implemented a new data integration with Risk Management Solutions (RMS) that aims to help evaluate and manage global risk from natural and man-made catastrophes. The solution provides an environmental risk score for properties backing CMBS loans, ranging from one to five, that measure the likelihood of property damage and business interruption from .......
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Risk transfer return
BDK preps capital relief trade
Bank Deutsches Kraftfahrzeuggewerbe (BDK) is marketing a full-stack capital relief trade backed by a static €1bn German auto loan portfolio. Dubbed Red & Black Auto Germany Seven, the deal is broadly similar to R&B Six, although changes have been made to the composition of the portfolio and the payment triggers.
Rated by S&P and Fitch, the transaction consists .......
News 23 October 2020
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Risk transfer round-up - 21 October
CRT sector developments and deal news
Lloyds is believed to still be attempting to execute its second transaction from the Fontwell programme. The deal is backed by agricultural loans and was expected to close in 3Q20, but the bank has allegedly found it hard to sell the mezzanine tranche at below 5%. The last Fontwell deal closed in December 2016 (see SCI’s capital relief trades .......
News 21 October 2020
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Risk transfer round-up - 20 October
CRT sector developments and deal news
Standard Chartered is rumoured to be prepping a capital relief trade backed by emerging market corporate loans from the START programme. The last START transaction closed in September 2015 (see SCI’s capital relief trades database).
....... News 20 October 2020
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Made in the USA
Speakers at SCI conference herald dawn of new era for US CRT
"Every year I join these conferences and I say 'This is the year of the USA,' and I'm always made a liar because I'm still waiting for it, but this year we'll see real uptick in activity in the US and I expect this will continue," said Jessica Littlewood, a partner at Clifford Chance in London, specialising in credit .......
News 16 October 2020
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SME CRT completed
Intesa finalises mezz guarantee
Intesa Sanpaolo, the EIF and the EIB have completed a €90m mezzanine guarantee that references a €1.8bn static Italian SME portfolio. Dubbed GARC SME 9, the capital relief trade will enable the bank to provide €450m of loans to Italian SMEs and midcaps in regions negatively impacted by the economic effects of the Covid-19 pandemic.
According to Intesa: “The transaction .......
News 15 October 2020
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Compromise pending
Parliament softens stance on 'problematic' proposals
The European Parliament will likely drop proposals for the exclusion of time calls and pro-rata amortisation from STS synthetic securitisations (SCI 6 October). The Parliament’s amendments were announced last week in response to the European Commission’s ‘quick fix’ framework (SCI 31 July). Compromise solutions are pending, with one potential option being time calls subject to regulatory approvals.
According .......
News Analysis 15 October 2020
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First EGF guarantee inked
Sector developments and company hires
First EGF guarantee inked
Market Moves 14 October 2020
The EIB has approved €5.1bn of new financing to support investment by companies most impacted by Covid-19, alongside backing clean energy, water, sustainable transport and urban development. This includes up to €2.66bn of support – comprising €1bn of EIB-linked risk-sharing products and €1.66bn EIF guarantee and equity products - backed by the new European Guarantee Fund, .......