CLOs
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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
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UK SLABS slated
Sector developments and company hires
EMEA
Eurocastle Investment has appointed Hammad Khan to its board as a non-executive director, increasing its number of directors to six. Khan is a representative of Eurocastle’s largest shareholder, an affiliate of EJF Capital, where he is a senior md and a senior member of the EJF Investments Manager investment team. He joined EJF in March 2013 and is responsible .......
Market Moves 23 November 2018
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Softening activity
European CLO market update
The European CLO market is relatively quiet due to the Thanksgiving holiday in the US, but the pipeline is seeing plenty of supply.
“The market is responding to the amount of supply,” says a trader. “Everything is wider; new issues are also coming in wide. I guess to a small extent the seize-up in equities has affected the market and .......
Market Reports 22 November 2018
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Classification clarity
Spanish SME ABS 'first' marketing
Be-Spoke Capital is marketing an unusual, inaugural securitisation, backed by a portfolio of loans to Spanish SMEs and expected to total around €300m, with pricing targeted for early December. Dubbed Alhambra SME Funding 2018-1, Natwest Markets is sole arranger on the transaction while the European Investment Bank is looking to invest €80m in the mezzanine tranche.
Miles Hunt, head of securitised .......
News Analysis 21 November 2018
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CRT tranche downgraded
Sector developments and company hires
Acquisitions
Spruce Finance has been acquired by HPS Investment Partners. Spruce will be headquartered in Houston and maintain its executive and M&A offices in San Francisco. Christian Fong has joined the company as president and ceo after holding a position as co-chairman of the board of directors since early 2017. The transaction took place through Spruce Holdings, a .......
Market Moves 21 November 2018
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Hesitant appetite
US CLO market update
US CLO equity and double-B bonds were casualties of the drop in the S&P 500 index yesterday, with bids softening across the secondary market.
“A handful of CLO equity and double-B bonds were out for the bid yesterday and did not trade,” says a trader. “There was some clear hesitation in the market compared with a week ago. .......
Market Reports 21 November 2018
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Bloodbath blues
European ABS market update
The European ABS market has repriced, after taking a hit yesterday when the S&P 500 index plunged by 1.8%. The tone has improved this morning, as traders cautiously return to the market.
“We’re seeing the market repricing after the bloodbath that happened yesterday,” says one trader. “A lot of paper hit the shelf and nobody wanted to trade it; mezz ......
Market Reports 21 November 2018Premium Content
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Buyer fatigue
US CLO secondary market update
The US stock market is 400 points down today (20 November) and is being described as an “ugly open”, with the sell-off beginning to unnerve traders. The effects are impacting the US CLO secondary market, as the fatigue of the past year catches up with investors.
“A lot of CLO managers are trying to get deals done, but investors are .......
Market Reports 20 November 2018
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Long goodbye
First non-Libor linked ABS anticipated
Lloyds became the first bank to issue a benchmark covered bond tied to the sterling overnight index average (SONIA) in September. The move has sparked predictions that the first securitisations tied to alternative reference rates will emerge next year.
Libor is set to be phased out from 2021 and it remains unclear what will replace it as a .......
News Analysis 20 November 2018
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Credit clutch
European ABS market update
The European ABS slow-down continues, with prices drifting wider and subdued credit growth across the board. In particular, an aversion to duration risk has emerged this week.
“Credit is headed for the worst year since 2008,” one trader explains. “ABS traders are not used to showing negative figures to their clients. People are reassessing the market.”
In .......
Market Reports 20 November 2018
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CMBS desk launched
Sector developments and company hires in structured finance
Europe
Simmons & Simmons has hired James Grand to lead its CLO offering. Grand was previously a structured products partner at Freshfields where he spent over 20 years, specialising in advising both the sell-side and the buy-side on CLOs, as well as contentious and non-contentious derivatives work, structured credit, tax structured products, regulatory capital and prime brokerage.
Partnerships
Alexandria Capital .......
Market Moves 15 November 2018
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Winding down?
US CLO market update
The US CLO primary market is seeing steady issuance as the remaining trading days continue to expire. Primary activity is presently more robust than secondary activity, which is said to be “a little squishier.”
Currently, there is a good bid for double-B CLO paper, whereas preference for triple-B and single-B paper varies from deal to deal. Generally the ......
Market Reports 15 November 2018Premium Content
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Dry powder
International ABS market update
Pepper Group is prepping an Australian RMBS that is expected to be sized at A$500m-equivalent and include a short US dollar tranche and a Euro-denominated pass-through tranche. Elsewhere in the European primary securitisation market, Tesco’s Delamare Cards MTN Issuer Series 2018-1 deal – the senior tranche of which is being talked at one-month Libor plus 70bp – is expected .......
Market Reports 15 November 2018
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NPL transaction markets
Sector developments and company hires in structured finance
NPL deal markets
Banco Santander Totta is in the market with Hefesto STC (Guincho), a €98m securitisation backed by a €481m portfolio, by gross book value (GBV), of Portuguese non-performing residential, commercial and unsecured loans originated by Banco Santander Totta. DBRS and Scope have assigned provisional ratings, respectively, of triple-B (low)/triple-B minus to the €84m class A notes and triple-C/single-B minus to the €14m ......
Market Moves 13 November 2018Premium Content
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Unpredictable factors
Macro and micro challenges highlighted
European market participants are facing three unpredictable factors in 2019, all of which will drive ABS activity and supply in the new year. ECB monetary policy evolution, Brexit execution and securitisation legislation implementation represent challenges from both macro and micro perspectives.
Among these challenges is the Basel 4 output floor. Alexander Batchvarov, md at BofA Merrill Lynch Global .......
News Analysis 9 November 2018
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CLO investor poached
Company hires and sector developments in structured finance
Acquisitions
LibreMax Capital has entered into an agreement to acquire Trimaran Advisors and certain affiliated companies (Trimaran) from KCAP Financial. Following the close of the transaction, Trimaran’s cio and head of its CLO platform, Dominick Mazzitelli, will continue to lead the business, supported by the existing management team. Trimaran currently manages six CLOs with approximately US$3bn AUM and .......
Market Moves 9 November 2018
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Midterm market
US CLO market update
High new issue volumes continue in the US CLO market, with managers paying more to get their deals away before year-end. BWIC activity also remains strong, in line with the market rally due to the US midterm election results.
One trader says there is a divergence between primary and secondary spreads. “BWICs are doing quite well, but new issues .......
Market Reports 8 November 2018
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CRE platform acquired
Sector developments and company hires in structured finance
Acquisitions
AXA Investment Managers has expanded its global debt platform through the acquisition of Quadrant Real Estate Advisors. This includes an acquisition of Quadrant’s investment team and management of US$9.4bn of US commercial real estate loan mandates. As part of the transaction, 24 members of Quadrant, including five of the founding members, will join AXA IM - Real Assets. .......
Market Moves 8 November 2018
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Mezzanine muddling
European CLO and CMBS markets update
European traders are focusing on secondary US CLO paper today, with 21 lines on BWICs compared with seven out for the bid in the European market (see SCI’s BWIC calendar). European CLO volumes have been low, yet triple-B bonds have performed steadily, contrary to expectations that they would perform badly this week.
“Clients have been quiet. There is no ......
Market Reports 7 November 2018Premium Content
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Global head hired
Company hires and sector developments in structured finance
Dechert has hired Cameron Mitcham as a partner in London at the firm’s global finance practice, joining from Allen & Overy. Mitcham will work with the CLO team and securitisation practice, acting for managers, arrangers, originators, investors and other deal parties in CLO transactions.
ING has hired Stefan Rolf as global head of securitisation for wholesale bank lending. Based in .......
Market Moves 6 November 2018
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Housing practice pinched
Company hires and sector developments in structured finance
Fund launch
Trium Capital is partnering with Ellington Global Asset Management to launch the Ellington Trium Alternative Credit UCITS, a long/short credit UCITS fund. The fund is set to be launched 4Q18 and will leverage Ellington’s expertise in RMBS, CMBS, CLOs and corporate credit relative value strategies.
ILS
Nephila Climate has hired Ariane West as director .......
Market Moves 5 November 2018