CLOs

  • 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

  • Consistent opportunities

    European CLOs still offering value

    Notwithstanding a slight and short-lived wobble last week as a result of macro volatility, the European CLO market has remained the model of consistency over the past few months with technicals dominating fundamentals. That consistency has provided opportunities throughout the capital structure – not least at the top of the stack, with heavy primary volume keeping CLO triple-A spreads .......

    News 28 July 2021

  • New CLO committee to tackle 'greenwashing'

    Sector developments and company hires

    New CLO committee to tackle ‘greenwashing’
    The European Leveraged Finance Association (ELFA) has created a new committee to establish industry best practice and serve investors in the CLO market. The CLO Investor Committee will provide a forum for members to identify CLO investors’ requirements, facilitate discussion on general market progress and key issues, and contribute to the regulatory dialogue on .......

    Market Moves 15 July 2021

  • ILS efforts beefed up

    Sector developments and company hires

    ILS efforts beefed up
    AXIS Capital Holdings has appointed Chris Caponigro as global head of AXIS ILS, as its third-party capital unit has been rebranded. Caponigro will oversee the company’s activities related to third-party capital under management, supporting ILS efforts across its reinsurance and insurance segments. He will report to AXIS Re ceo Steve Arora and be based out of .......

    Market Moves 14 July 2021

  • EU monetary policy to reflect carbon transition

    Sector developments and company hires

    EU monetary policy to reflect carbon transition
    The ECB has published its new monetary policy strategy, which includes what it describes as “an ambitious climate-related action plan”. The central bank states that climate change has profound implications for price stability through its impact on the structure and cyclical dynamics of the economy and the financial system.

    As such, it .......

    Market Moves 9 July 2021

  • Sustainable finance strategy unveiled

    Sector developments and company hires

    Sustainable finance strategy unveiled
    The European Commission has adopted a number of measures in connection with sustainable finance. First, a new Sustainable Finance Strategy sets out several initiatives to tackle climate change, as well as increase investment in the EU's transition towards a sustainable economy.

    The strategy includes six sets of actions: extend the sustainable finance toolbox to facilitate .......

    Market Moves 7 July 2021

  • NPL facility inked

    Sector developments and company hires

    NPL facility inked
    Together Financial Services has launched a new £96.2m securitisation vehicle called Brooks Asset Backed Securitisation 1 (BABS), which matures in 2026. The facility consists of a varied pool of residential and commercial purpose non-performing loans, previously funded within the senior borrower group. Consistent with its wider securitisation programme, Together will continue to service and manage the loans .......

    Market Moves 6 July 2021

  • Italian SME ABS first finalised

    Sector developments and company hires

    Italian SME ABS first finalised
    Banca Carige and Banca del Monte di Lucca have completed Lanterna Finance 2021, the first Italian SME ABS backed by loans fully guaranteed by the Italian government. The up to €30,000 unsecured loans have been originated based on the ‘Liquidity decree’, converted into law on 5 June 2020, and are fully guaranteed by the Central .......

    Market Moves 30 June 2021

  • Finish line

    ESMA designates securitisation repositories

    ESMA has announced the European DataWarehouse (EDW) and SecRep as the EU’s official securitisation repositories. The decision addresses an important element of the disclosure framework under the Securitisation Regulation that was long left open. More saliently, originators of synthetic securitisations will now have to submit data to the repositories as part of the new ESMA rules, albeit there is .......

    News Analysis 29 June 2021

  • Volatility hedge

    Bart Bakx, head of ABS and mortgages at NN Investment Partne...

    Q: Do you believe private credit will take on a more significant role in investor portfolios in 2021? If so, which factors are driving this forward?
    A: We see that many investors are undertaking searches and these are increasing towards private credit. Looking for opportunities to allocate, investors seek alternatives in the private market space in view of continued volatility .......

    The Structured Credit Interview 25 June 2021

  • Generali debuts green cat bond

    Sector developments and company hires

    Generali debuts green cat bond
    Assicurazioni Generali has priced an innovative catastrophe bond. Dubbed Lion III Re, the €200m ILS has a number of sustainable finance features.

    First, Generali freed up €28.1m in capital as a result of the protection provided by Lion III Re, which will be allocated to eligible projects as defined by Generali’s Green ILS Framework. .......

    Market Moves 21 June 2021

  • Adopting change

    Class A loan note attracts attention

    Together Money earlier this month priced its second public small balance CMBS, the £249m Together Asset Backed Securitisation 2021-CRE2. The transaction is notable for including a class A loan note in the capital structure – a feature previously only seen in the CLO market.

    “[The deal] is very similar to a traditional securitisation; it is structured with notes .......

    News Analysis 21 June 2021

  • SRT upgraded on CE build-up

    Sector developments and company hires

    SRT upgraded on CE build-up
    Scope Ratings has affirmed its single-A rating on the class C credit-linked notes issued by SSPAIN 2019-A and upgraded the class D to F notes to triple-B plus, triple-B minus and double-B plus respectively from triple-B minus, double-B and double-B minus. The transaction is a significant risk transfer deal, which closed on 28 June 2019 .......

    Market Moves 18 June 2021

  • Auto turnover dampens DFP issuance

    Sector developments and company hires

    Auto turnover dampens DFP issuance
    Accelerated dealer auto inventory turnover has resulted in insufficient collateral available for US dealer floorplan (DFP) ABS master trusts in 2021, Fitch reports. The agency notes that this is indirectly accounted for by deal structures, for the most part, through the use of excess funding accounts (EFAs). EFAs are meant to protect trusts against inventory .......

    Market Moves 14 June 2021

  • Smoother transition?

    US CLO secondary looks to be taking this quarter-end in its stride

    Current market technicals typically indicate a spike in volatility at the bottom of the US CLO debt stack, as trading hots up into quarter-end. However, Q2 looks set to be a smoother ride than Q1 and secondary market focus has shifted towards equity.

    “We’re coming to quarter end and there is a large volume of primary deals in .......

    News Analysis 14 June 2021

  • Euro CLOs could still soften

    Sector developments and company hires

    Euro CLOs could still soften
    European CLO new issue triple-A spreads are now out to 87bp-88bp from their post-Covid tights of 79bp-80bp. While there appears to be considerable support at current levels, technicals could yet push them to the low-90s, according to Bank of America European CLO research analysts.

    Offsetting factors currently at play include broader credit market direction, rates moves .......

    Market Moves 7 June 2021

  • Focal point

    Arb rather than NAV in focus

    European CLO equity performance has held strong despite the unprecedented Covid shock and significant shifts in loan market pricing in the last 12 months, supporting the view that a diversified portfolio of CLO equity can deliver strong and consistent returns through the credit cycle and attract new investors. To build on that, CLO managers now need to shift their focus, .......

    News 25 May 2021

  • CLO conflicts of interest eyed

    Sector developments and company hires

    CLO conflicts of interest eyed
    IOSCO has issued four questionnaires for industry participants on conduct risks in leveraged loans (LLs) and CLOs targeting bank lenders, CLO investors, CLO managers and LL sponsors. Through its Committee 3 on Regulation of Market Intermediaries and its Committee 5 on Investment Management, IOSCO is conducting work to understand the potential conflicts of interest and .......

    Market Moves 24 May 2021

  • Strategic credit commitment inked

    Sector developments and company hires

    Strategic credit commitment inked
    The Investment Management Corporation of Ontario (IMCO) has closed a US$500m commitment with a new strategic partner, Ares Management Corporation. IMCO has allocated US$400m of the commitment to a fund of one structure and US$100m to Ares Pathfinder Fund, a flagship global alternative credit fund. Pathfinder pursues a differentiated strategy of providing tailored financial solutions for .......

    Market Moves 20 May 2021

  • Revving up

    Strong demand continues for CRE CLOs

    Sentiment in the US CRE CLO market remains relatively positive (SCI 10 May), with the multifamily sector in particular seeing robust demand. The outlook for the office sector is mixed, however.

    “The CRE CLO market is hitting all cylinders. There is strong investor demand for new issuance and issuers have a strong origination pipeline,” says John Amman, .......

    News Analysis 20 May 2021

  • Data centre leverage 'inconsistent' with ratings

    Sector developments and company hires

    Data centre leverage ‘inconsistent’ with ratings
    A number of wholesale data centre securitisations issued in recent years carry elevated leverage that is inconsistent with the single-A rating category, Fitch suggests. The rating agency states that these transactions have weaker credit characteristics and substantially higher leverage multiples than other comparable digital real estate securitisations, such as wireless tower transactions, and higher .......

    Market Moves 19 May 2021
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