CLOs

  • 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

  • Blue investable markets study underway

    Sector developments and company hires

    Blue investable markets study underway
    The European Commission and the EIB Group have increased their cooperation to implement a new EU Sustainable Blue Economy policy. Under the agreement, both institutions will work jointly with EU Member States to meet financing needs to reduce pollution in European seas and support investment for blue innovation and blue bioeconomy.

    As such, the .......

    Market Moves 18 May 2021

  • Biden bonanza

    Vast infrastructure package to energise project finance CLOs

    The project finance CLO market, somnolent for a decade, will receive a shot in the arm from the Biden administration’s ambitious infrastructure spending programme, say market-watchers.

    Around $600bn of the planned $2trn package is earmarked for improvement of transport networks, and another $200bn or more will go on housing. The details of how and in what form this money will be distributed .......

    News 14 May 2021

  • Virtuous circle?

    Bullish sentiment underpins securitisation opportunity

    A strong rebound in global growth appears to be underpinning the opportunity in securitised credit, notwithstanding the ongoing impact of the coronavirus pandemic. As economic activity picks up and more collateral is available to be securitised, further supply should hit the market and generate increased interest from investors.

    Sentiment in the securitisation market remains bullish, according to Mark .......

    News 14 May 2021

  • Asset managers partner on pensions initiative

    Sector developments and company hires

    Asset managers partner on pensions initiative
    DWS has launched the DWS Secured Income Fund, aimed at small to medium-sized defined benefit pension plans seeking stable, long-term returns. The fund provides a diversified portfolio of secured income assets, including ABS and CLO bonds.

    Over half of UK defined benefit pension plans are in deficit, with insufficient assets to meet their .......

    Market Moves 13 May 2021

  • Demand drivers

    Fundamentals and technicals support US CLOs for now

    On the back of the exceptionally heavy supply in Q1, US CLO spreads softened, but had reversed back to one-year tights at the end of last week. The move was driven by continuing voracious investor demand, unlikely to be diminished even by expected record primary issuance, unless macro events intervene.

    “Most people still see CLOs as pretty good .......

    News Analysis 13 May 2021

  • Iberian RMBS investment disclosed

    Sector developments and company hires

    Iberian RMBS investment disclosed
    The EIB has disclosed that it invested €50m in UCI’s latest RMBS, Prado VIII, aimed at promoting the renovation of existing residential buildings in Spain and Portugal, as well as the purchase of new near zero energy housing. The project is expected to contribute to climate change mitigation, delivering energy savings of almost 57GWh a year .......

    Market Moves 12 May 2021

  • STS BTL RMBS prepped

    Sector developments and company hires

    STS BTL RMBS prepped
    Domivest is in the market with the first-ever STS buy-to-let RMBS. Dubbed Domi 2021-1, the €352.2m transaction is backed by a €370.7m provisional pool of Dutch BTL mortgage loans, including €30.61m in prefunding.

    Interest-only loans comprise 93.5% of the pool, according to Moody’s. Loans with initial LTVs above 70% amortise linearly to either the 70% .......

    Market Moves 11 May 2021

  • Hertz reorganisation proposals weighed

    Sector developments and company hires

    Hertz reorganisation proposals weighed
    Hertz has determined that a revised proposal to provide equity capital to fund its exit from Chapter 11 - made by affiliates of Knighthead Capital Management, Certares Opportunities and Apollo Capital Management - constitutes a superior proposal than the one contemplated by its agreement with its existing plan sponsors, affiliates of Centerbridge Capital Partners, Warburg Pincus .......

    Market Moves 10 May 2021

  • CRE CLO surge

    Record issuance expected

    The US CRE CLO market is seeing a surge in new issuance, albeit from the sector’s relatively low levels. The 18 deals priced so far this year have already surpassed last year’s total of 11 and are well on the way to reaching 2019’s all-time record of 29, with total volume expected to surpass the US$15bn achieved then.

    Bank of .......

    News Analysis 10 May 2021

  • Greek investment partnership inked

    Sector developments and company hires

    Greek investment partnership inked
    Mount Street Group has formed a strategic partnership in Greece and Cyprus with Technical Olympic, a Greek real estate, construction and investment group. As part of the partnership and through its subsidiary PFC Premier Finance Corporation (Cyprus), Technical Olympic has entered into a Memorandum of Understanding to acquire a stake in Mount Street’s businesses in Greece .......

    Market Moves 29 April 2021

  • Convexity clues

    CLOs hold firm but opportunities arise

    Booming CLO primary activity either side of the Atlantic continues to be met with sufficient demand to keep supporting spreads. However, there are still opportunities for investors in some areas.  

    “Mezz in particular has continued to come in over the past couple of weeks,” says one investor. “The only area where we are seeing a hint of .......

    News Analysis 29 April 2021

  • Irish RPL refi prepped

    Sector developments and company hires

    Irish RPL refi prepped
    A refinancing of two Irish reperforming RMBS - European Residential Loan Securitisation 2019-PL1 and Grand Canal Securities 1 - has hit the market. Dubbed Primrose Residential 2021-1, the transaction is backed by a €869.8m portfolio of seasoned first lien performing and reperforming mortgages secured by majority owner occupied (accounting for 57.6% of the pool) and buy-to-let .......

    Market Moves 28 April 2021

  • APAC ESG expansion eyed

    Sector developments and company hires

    APAC ESG expansion eyed
    Moody’s is set to expand its Singapore office with the aim of spearheading ESG, climate and sustainable finance efforts in the Asia Pacific region, as well as fostering the ESG ecosystem in Singapore. Included in the firm’s plans are several initiatives, such as the establishment of an ESG Centre of Excellence for investor outreach, engagement and .......

    Market Moves 27 April 2021

  • Democratising data

    Stephane Michel, senior portfolio manager at the internation...

    Q: How does Federated Hermes integrate ESG in its CLO business?
    A: CLOs are still very much a universe where we are trying to build an analytical framework that is comparable to what our equity colleagues have been able to do for much longer, due to the provision of data that we haven’t got. That’s the challenge for ESG across .......

    The Structured Credit Interview 27 April 2021

  • Downgrades for 'lower quality' mall CMBS

    Sector developments and company hires

    Downgrades for ‘lower quality’ mall CMBS
    Moody's has downgraded 119 principal and interest, 26 interest-only and 11 exchangeable classes from 36 US CMBS and placed eleven P&I, one exchangeable and three IO classes under review for possible downgrade from a further two CMBS. The rating actions affect approximately US$6.2bn of securities and were prompted primarily by increased loss expectations and .......

    Market Moves 26 April 2021

  • Investor interest

    European CLOs attracting new investors to mezz and equity

    European CLO primary activity continues to roll, with seemingly unwavering investor demand supporting prices at the top of the stack. Now, investor interest is growing across the capital structure, as new players look to enter the lower tranche space.  

    As of yesterday’s close, an impressive 87 European CLOs had priced this year. Nevertheless, the three resets that printed .......

    News Analysis 22 April 2021

  • Forbearance SPV availability ends

    Sector developments and company hires

    Forbearance SPV availability ends
    The Australian Office of Financial Management has released an update on its Structured Finance Support Fund (SFSF) activities. As of 31 March 2021, total funds committed by the SFSF were A$3.8bn, including A$1.36bn public market investments and circa A$2.3bn across 45 individual warehouses sponsored by 34 eligible lenders.

    The AOFM notes that public securitisation market .......

    Market Moves 21 April 2021

  • Blockchain mortgage 'ecosystem' prepped

    Sector developments and company hires

    Blockchain mortgage ‘ecosystem’ prepped
    Liquid Mortgage has raised capital from and entered into a strategic partnership with Redwood Trust, marking the culmination of a months-long engagement, in which Redwood Trust tested Liquid Mortgage's technology and developed an actionable strategy to build a future-ready mortgage ecosystem. The partners share a common mission of utilising blockchain technology within the current market infrastructure, .......

    Market Moves 20 April 2021

  • Shifting trends

    Differing ESG impacts on credit quality considered

    ESG considerations pose higher credit risk to certain securitisation asset classes and certain global regions, with evolving regulations and shifting consumer demand exposing transactions to potential declines in asset values or cashflow. Nevertheless, structural features, short loan tenors and asset diversification can help minimise such credit negative effects.

    ESG credit considerations include a broad range of qualitative and .......

    News 15 April 2021

  • Income opportunities

    Clayton Triick, CFA, senior portfolio manager at Angel Oak Capital Advisors, answers SCI's questions

    Q: How and when did you become involved in the securitisation market?
    A: Angel Oak Capital Advisors has a long history within the US securitised markets. Originally as a distressed credit investor during the global financial crisis, Angel Oak was able to invest capital targeting deeply discounted private-label RMBS.

    As markets continued to improve over the subsequent decade, we .......

    The Structured Credit Interview 14 April 2021
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