CLOs
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Global leader appointed
Sector developments and company hires
Amended complaint filed
The state of Colorado has filed a Second Amended Complaint relating to state court actions against Avant and Marlette, alleging that the platforms have violated its Uniform Consumer Credit Code (SCI 12 May 2017). According to a Chapman and Cutler client memo, in addition to making the same claims against the platforms, the state is suing .......
Market Moves 12 December 2018
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Libor consultation launched
Sector developments and company hires
ILS
Peak Reinsurance Company has launched Asia’s first sidecar transaction via a new Bermuda-domiciled special purpose insurer, Lion Rock, to provide collateralised retrocession for part of Peak Re’s global property reinsurance risk portfolio. The establishment of this special financial structure, referred to as a “reinsurance sidecar”, allows investors to take on the risk and benefit from specific books .......
Market Moves 11 December 2018
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Selling spike
US CLO market update
There has been a spike in selling of investment grade paper on the US CLO secondary market, coming mostly from the insurance sector. In past cycles, insurance companies have been more likely to hold on to their assets, but currently seem willing to sell.
“We are not sure if it is year-end cleansing or if this is more .......
Market Reports 11 December 2018
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Reaching capacity
New CLO managers continue flocking to Europe
Seven new CLO managers are warehousing assets, with European CLO platforms ready to issue in 1Q19. Most of the new entrants are US managers expanding into Europe, but the increasing number of managers has sparked concerns that the European market may be reaching capacity.
This year in Europe, five new CLO managers have priced deals, adding to the .......
News Analysis 7 December 2018
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Bid scarcity
European ABS market update
A major UK bank is focusing efforts of European NPLs in the coming weeks, as spreads continue to widen in the CLO and ABS primary markets.
“We are running a few private processes, which are keeping us busy, and we will hopefully conclude them over the next couple of days,” says a trader.
The trader comments that .......
Market Reports 7 December 2018
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BTL securitisation planned
Sector developments and company hires
Europe
Accunia has promoted Mads Romild as head of Accunia’s CLO platform. Romild will continue as cio and head all Accunia investment strategies. Andres Garcia Bartolome and Rajiv Thaker are also promoted to senior portfolio managers and will be responsible for the portfolio management of the three existing and all new Accunia CLOs. Romild previously held a position as chief portfolio .......
Market Moves 6 December 2018
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Deals pulled?
US CLO market update
Several US CLO deals are believed to have been pulled from the pipeline and pushed back to 2019, amid growing concerns over market conditions.
“What we are trying to do right now is to gauge customer demand,” says one trader. “We are trying to find out what our customers want and at the moment we are not getting ......
Market Reports 6 December 2018Premium Content
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Cheaper deals
European CLO market update
The European CLO market seems stronger than it was last week, but still relatively volatile.
“I suppose good managers get deals done; I think that’s the bottom line,” says a trader. “For managers that are perceived to be worse, it is harder now.”
He continues: “November was an expensive month to price new deals in Europe. We .......
Market Reports 5 December 2018
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Enforcement uncertainty
Set-back for STS-eligible issuance
The recent statement issued by the Joint Committee of the ESAs (SCI 4 December) is unlikely to be sufficient to assuage securitisation market concerns on its own. Such regulatory uncertainty is expected to further delay the emergence of STS-eligible securitisations in the pipeline.
“The statement by the Joint Committee of the ESAs acknowledges the concerns about the .......
News 5 December 2018
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Print and sprint
US CLO market update
US CLO BWIC activity is booming ahead of tomorrow’s market holiday in honour of former president George H.W. Bush.
Bid-lists have mainly been triple-A oriented, whereas demand for triple-B bonds has faded. Double-B bond prices are 1.5 points worse off.
“People are re-evaluating double-B bonds based on market value (MVOC) and are focusing on high quality,” .......
Market Reports 4 December 2018
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Activity upsurge
European ABS market update
The European primary and secondary ABS markets are seeing a surge in activity, due to uncertainty over the next quarter.
“After the high volatility last month, I was expecting a slow-down,” says one trader, surprised by the activity.
He suggests that market ambiguity around the next quarter is driving it. “The consensus is that things will only get choppy from .......
Market Reports 4 December 2018
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BDC merger announced
Sector developments and company hires
BDC merger
Golub Capital BDC (GBDC) has merged with Golub Capital Investment Corporation (GCIC), with GBDC as the surviving company, subject to certain stockholder approvals and customary closing conditions. The combined company will remain externally managed by GC Advisors and all current GBDC officers and directors will remain in their current roles. The transaction is expected to close .......
Market Moves 4 December 2018
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Sustainable growth?
Prospects for green CLOs examined
Green CLOs are expected to play an increasing role in the private sector’s involvement in the sustainable finance market. As such, S&P has created a hypothetical rating scenario to compare the credit quality of green CLOs with a typical European CLO 2.0 deal.
“There is a need for more funding in this space,” says Jekaterina Muhametova, associate at S&P. “Green .......
News 4 December 2018
Proportional approach
ESAs tackle delay in transparency requirements
The joint European Supervisory Authorities (ESAs) - which consist of the EBA, ESMA and the European Insurance and Occupational Pensions Authority - have published a letter reiterating market concerns over ESMA’s disclosure requirements (SCI 5 October) and Article 14 (SCI 9 July) of the CRR. The authorities have also called on EU national regulators to apply a ......
News 4 December 2018Premium Content
ESAs suggest 'proportion'
Sector developments and company hires
Aussie securitisation fund
The Australian government has introduced a A$2bn Australian Business Securitisation Fund, which will provide significant additional funding to smaller banks and non-bank lenders to on-lend to small businesses on more competitive terms. The fund will be administered by the Australian Office of Financial Management (AOFM), consistent with its prior involvement in the RMBS market in .......
Market Moves 3 December 2018
Multi-jurisdiction exposure
Cashflow trade finance CLO prepped
Standard Chartered is in the market with its first global cashflow CLO backed by US$1bn of trade finance exposures (TFEs), with collateral from across multiple jurisdictions. The senior tranche of the deal – dubbed Prunelli Issuer I (compartment 2018-1) – represents 75% of the assets, with overcollateralisation accounting for the remainder.
The pool, which has a revolving period .......
News 3 December 2018
Funding boost for online lender
Sector developments and company hires
Alesco CDOs transferred
The collateral management agreements for the Alesco Preferred Funding X to XVII Trups CDOs have been assigned to Hildene Collateral Management Company (HCMC), an affiliate of Hildene Capital Management. Under the terms of the assignments, HCMC agrees to assume all the responsibilities, duties and obligations of the current collateral manager (ATP Management) under the agreements and under .......
Market Moves 29 November 2018
Term leveraging
European ABS market update
The European primary ABS market is still drifting wider, due to concentration of supply.
“Investors are using their leverage to dictate terms and push deals as wide as possible. That’s one of the reasons why the pipeline has been brought forward,” says one trader.
He adds: “If a deal is struggling, an investor can offer to push .......
Market Reports 29 November 2018
Canadian asset expansion
Sector developments and company hires
ILS
TigerRisk Partners has hired Stephen Fromm as vice chairman of TigerRisk capital markets and advisory. In his new role, Fromm will act as a senior investment banker focusing on insurance industry M&A, capital raising and strategic advice. Fromm was previously md and vice chairman of financial institutions investment banking at Deutsche Bank.
MBS purchase plans
The Bank of Canada .......
Market Moves 27 November 2018
Start the week - 26 November
A review of securitisation activity over the past seven days
Market commentary
US CLO equity and double-B bonds were casualties of last week’s drop in the S&P 500 index, with bids softening across the secondary market (SCI 21 November).
“A handful of CLO equity and double-B bonds were out for the bid and did not trade,” said a trader. “There was some clear hesitation in the market compared with a week ago. .......
News 26 November 2018
Two-sided market
European secondary market update
There are a few CLO BWICs out for the bid today with another RMBS scheduled for this evening. The European market has not followed an identifiable trend since the US thanksgiving holiday and activity remains subdued.
“A number of accounts are waiting on the sidelines and only going for highly discounted paper,” says one trader. “It could be the calm before ......
Market Reports 26 November 2018Premium Content