CLOs
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US CLOs, Trups CDOs under observation
Sector developments and company hires
US CLOs, Trups CDOs under observation
Market Moves 22 September 2021
Fitch has placed 102 tranches issued by 43 US CLOs and 13 tranches issued by seven Trups CDOs under criteria observation (UCO), following the publication of its CLO and corporate CDO rating criteria last week (SCI 17 September). The agency intends to resolve the UCO status by applying the updated criteria to each .......
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Not so new kids
CLO manager readying for launch
Not yet a year old, Sycamore Tree Capital Partners is aiming high. The firm intends to become a significant player in CLO management, with the belief that the experience and character of its team are more important than its age.
“Mark Okada, Jack Yang and I launched Sycamore Tree officially in November 2020, as a boutique private and .......
News Analysis 22 September 2021
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Pandemic 'feedback loop' highlighted
Sector developments and company hires
Pandemic ‘feedback loop’ highlighted
Market Moves 21 September 2021
Secular changes affecting the recovery of in-person office occupancy in New York City is consequential not only for property-level cashflow, but may also have ripple effects on other sectors, Fitch suggests. The city is the largest US office market and the rating agency says it provides a good case study of the potential feedback loop of .......
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Replacement issues
SOFR challenges explored
Term SOFR is expected to be the main replacement for US Libor. This premium content article explores the challenges the new benchmark presents to US CLO equity investors.
The US Federal Reserve’s Alternative Reference Rates Committee (ARRC) has firmly backed Term SOFR to replace Libor (SCI 2 August). The new benchmark provides US CLO equity investors with some challenges ......
News Analysis 21 September 2021Premium Content
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CLOs and beyond
Don Young, partner and co-founder of CBAM Partners, answers SCI's questions
Q: How and when did you become involved in the CLO market?
My partner Mike Damaso and I have been managing CLOs since 2001. I first became involved in the space when I joined Octagon Credit investors. After this, I went on to manage the Performing Credit business at Och-Ziff, which included US$7.5bn of CLOs. Mike has over 20 years of .......
The Structured Credit Interview 20 September 2021
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Securitisation execs promoted in PGIM reorg
Sector developments and company hires
Securitisation execs promoted in PGIM reorg
PGIM Fixed Income has reorganised its senior management team, with the appointments effective from 1 January 2022. Under the reorganisation, md John Vibert has been promoted to the newly created role of president.Vibert joined PGIM Fixed Income in 2014 as the head of securitised products and serves in that role currently. Prior .......
Market Moves 17 September 2021
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NPR issued on GSE capital framework
Sector developments and company hires
NPR issued on GSE capital framework
Market Moves 16 September 2021
The FHFA is seeking comment on a notice of proposed rulemaking that would amend the Enterprise Regulatory Capital Framework (ERCF) for Fannie Mae and Freddie Mac. The proposed amendments would refine the prescribed leverage buffer amount (PLBA) and the capital treatment of credit risk transfers (CRT) to better reflect the risks inherent in the .......
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Specialist lender stake acquired
Sector developments and company hires
Specialist lender stake acquired
Market Moves 15 September 2021
BNP Paribas Asset Management (BNPP AM) is set to acquire a majority stake in Dynamic Credit Group, the Amsterdam-based asset manager and specialist lender with €9bn of assets under management. The deal will allow BNPP AM’s private debt and real assets (PDRA) investment division - which currently managed €11bn of client commitments - to significantly grow .......
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Structural innovation
Evolution of Euro CLOs set to continue
European CLOs issued during 2021 have started to resemble pre-pandemic deals, with par subordination returning to the 38%-40% range compared with 42%-44% for CLOs issued last year. At the same time, documentation and structural features continue to evolve in response to the challenging environment, adding further flexibility for effective management of CLO portfolios.
“Last year, CLO documentation changed, .......
News 10 September 2021
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Chinese reserves
Growth boosts domestic securitisation market
China’s continued economic growth has boosted both securitisation performance and issuance volumes. However, bank asset quality remains at risk because of high economic uncertainties from the lingering pandemic threat and ongoing structural adjustment in the economy. Yet bank asset metrics benefit from continued disposal of bad debts using their substantial loan loss reserves.
According to the latest Moody’s .......
News 10 September 2021
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Cyberattack scenarios weighed
Sector developments and company hires
Cyberattack scenarios weighed
Market Moves 8 September 2021
S&P reports that it has seen more credit-relevant cyber events in the last six months than in the previous six years, including the first structured finance transaction reporting an operational disruption following a ransomware attack on the originator and servicer (SCI 28 May). The rating agency says it has explored several hypothetical scenarios to identify areas .......
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SFDR to spur Article 8 CLOs
Sector developments and company hires
SFDR to spur Article 8 CLOs
Market Moves 7 September 2021
CLOs may soon be structured as Article 8 funds under the EU Sustainable Finance Disclosure Regulation (SFDR), as part of the rotation of capital towards assets that promote ESG objectives, according to White & Case. The firm notes in a recent client memo that Article 8 funds that invest in CLOs are already emerging and .......
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CLO control equity fund closed
Sector developments and company hires
CLO control equity fund closed
Market Moves 26 August 2021
Lakemore Partners has successfully closed Aquatine IV at US$400m, due to strong investor demand. Aquatine IV is Lakemore’s fourth CLO fund within the Aquatine platform, which invests in control equity positions in US CLOs. Investors in the fund comprise a diverse group of institutional investors, representing private banks, fund of funds, insurance companies, family offices .......
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APAC ILS issuance on the rise
Sector developments and company hires
APAC ILS issuance on the rise
Continued efforts from Asia Pacific reinsurers to source alternative capital through the ILS market is anticipated, following on the heels of the seven catastrophe bonds that were issued using Singapore-domiciled vehicles through July. Indeed, the first Hong Kong-domiciled catastrophe bond is being prepped.The Singapore cat bonds issued in 2021 comprise: Security First .......
Market Moves 20 August 2021
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Corporate, PF businesses bolstered
Sector developments and company hires
Corporate, PF businesses bolstered
KBRA has enhanced its corporate and project finance businesses by forming new sector teams to focus on the intersection of infrastructure, energy, renewables and middle market lending. The aim of the sector-focused teams is to meet demand for KBRA’s thought leadership across these segments.Andrew Giudici, senior md and global head of corporate, project and .......
Market Moves 18 August 2021
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Bullish sentiment
CLO, loan opportunity set to continue outperforming
The global CLO market is now pushing US$1trn in outstandings. Against this backdrop, both CLOs and the underlying loans are expected to outperform, as investors continue seeking higher risk-adjusted returns.
Mohamed Seif, co-founder and md of Lakemore Partners, notes that growth and demand in the US CLO market is being driven by a number of factors. First, CLOs .......
News Analysis 17 August 2021
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DSW CMBS exposure gauged
Sector developments and company hires
DSW CMBS exposure gauged
Market Moves 13 August 2021
KBRA Credit Profile (KCP) has published a special report on CMBS exposure to footwear retailer Designer Brands, owner of the Designer Shoe Warehouse (DSW) store chain. The company reported EBITDA of negative US$316m in its fiscal year 2020, as sales plummeted in the wake of the Covid-19 pandemic. The company returned to profitability in 1Q21 after .......
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Equity ownership
Dan Norman, md at Lakemore Partners, discusses his plans to...
Q: Tell us about your new role at Lakemore Partners (SCI 4 August)?
The Structured Credit Interview 12 August 2021
A: I joined the team in March this year and I am very happy to be part of Lakemore’s global expansion. We are in the process of building a US business and the primary steps are to build a US and global product distribution system for .......
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Pretium strengthens resi credit capabilities
Sector developments and company hires
Pretium strengthens resi credit capabilities
Market Moves 4 August 2021
Sarah Kong, Andrew Miller and Peter Morreale have joined Pretium as mds, based in New York. Kong will be responsible for mortgage whole loan trading at Pretium and joins from Goldman Sachs, where she spent 15 years in the firm's mortgage business. Miller was previously at Fortress Investment Group and will be responsible for the .......
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BTL issuer acquired
Sector developments and company hires
BTL issuer acquired
Starling Bank has acquired specialist buy-to-let mortgage lender Fleet Mortgages in a £50m cash and share deal. To date, Fleet Mortgages has originated £2.3bn of mortgages and experienced zero credit losses. It currently has circa £1.75bn of mortgages under management and has executed nine RMBS.Starling will become the sole funder of future originations, with Fleet .......
Market Moves 29 July 2021
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Risk on
Lower quality credit outperforms
The first half of 2021 has been universally positive for below-investment grade credit markets and for alternative credit funds. Indeed, stressed and distressed corporate credit generated the highest returns.
“If you fell asleep at the end of 2019 and woke up mid-way through 2021, you would look back and say these performance numbers don’t look too bad. Credit .......
News 28 July 2021