RMBS
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Blockchain mortgage 'ecosystem' prepped
Sector developments and company hires
Blockchain mortgage ‘ecosystem’ prepped
Market Moves 20 April 2021
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, .......
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Federal preemption challenges continue
Sector developments and company hires
Federal preemption challenges continue
Market Moves 15 April 2021
Two US courts have heard actions that are of significance to marketplace lenders and their funding sources so far this month, Chapman and Cutler reports. In Maryland, a state regulatory action purporting to require licensing of a sponsor bank and its fintech service providers has been removed to federal court. Conversely, a California federal court has dismissed .......
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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
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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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Robust sentiment
Positive outlook for Dutch RMBS market
Sentiment in the Dutch RMBS market remains robust, according to panelists in a recent DBRS Morningstar webinar. While government support has been helpful in shoring up the sector during the Covid crisis, inflation is a growing concern among market participants.
“House prices didn’t fall as widely as expected during the pandemic,” said Ketan Thaker, svp and head of .......
News Analysis 13 April 2021
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Green auto feasibility assessments underway
Sector developments and company hires
Green auto feasibility assessments underway
Market Moves 13 April 2021
CO2 emissions data reporting by auto loan lenders is likely to be crucial to classifying auto loan securitisations as ‘sustainable’ or ‘green’, in order to tap demand from ESG-oriented investors, Fitch says. However, the rating agency notes that discussions with lenders imply that creating the basis for detailed CO2 emissions reporting is challenging, as the .......
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Non-resident Aussie RMBS debuts
Sector developments and company hires
Non-resident Aussie RMBS debuts
Market Moves 8 April 2021
Brighten Home Loan is readying its inaugural RMBS - the A$250m Solaris Trust 2021-1 – which is backed by loans predominantly to non-Australian resident borrowers. S&P notes that the portfolio is not only exposed to macroeconomic events and policies that affect Australia, but also to events and policies that affect the borrowers’ countries of residence. Consequently, .......
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GACS NPL ABS performance eyed
Sector developments and company hires
GACS NPL ABS performance eyed
Market Moves 7 April 2021
A sum of eight new GACS non-performing loan securitisations priced in late 2020, with a cumulative balance of €3.4bn (securitising a cumulative original GBV of €13.4bn of NPLs), according to JPMorgan’s latest Italian NPL Performance Tracker report. Including these transactions, Italian NPL ABS issuance has risen to €22.1bn across 38 deals (including three non-GACS transactions), .......
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ESG endeavours
Social bonds gaining traction
Yorkshire Building Society’s recent Brass 10 RMBS marked the second social bond to hit the UK securitisation market, following Kensington’s social RMBS from February (SCI 3 February). While a ‘greenium’ has emerged for deals categorised as green, the trajectory for social bonds appears to be more nuanced, however.
“The mortgages backing the YBS deal will form part .......
News Analysis 1 April 2021
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Follow-up funding for Raiffeisen-Leasing
Sector developments and company hires
Follow-up funding for Raiffeisen-Leasing
The EIB Group has provided €200m funding to Raiffeisen-Leasing Austria via a true sale securitisation dubbed ROOF AT. The transaction’s €462.8m triple-A rated class A notes were preplaced with EIB (which subscribed to €150m) and EIF (€50m), as well as other market funding partners. Raiffeisen-Leasing Group subscribed to the €75m class B notes.The €538m .......
Market Moves 31 March 2021
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Mission possible
Securitisation critical to UKAR success
UK Asset Resolution (UKAR) last month completed its final asset sale (SCI 26 February), marking the end of over a decade of state ownership of Bradford & Bingley (B&B) and Northern Rock Asset Management (NRAM) that saw the vast majority of the two lenders’ legacy mortgage loans securitised across 13 transactions. Indeed, without a functioning securitisation market, these assets .......
News Analysis 30 March 2021
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Show me the money
Debut US regional bank CRT yields too thin for traditional buyers
Traditional capital relief trade buyers would not have been attracted to the recent Texas Capital Bank deal, as the yield was insufficiently alluring, say investors.
“Libor plus 400bp is too low; we’re looking at an absolute return of 8%-12%. We’d have to use leverage to get it up to those levels and we don’t do that. This .......
News Analysis 29 March 2021
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Equity return boost touted
Sector developments and company hires
Equity return boost touted
US CLO equity is poised to deliver double-digit returns to investors this year, paring back the underperformance seen over the past four years, according to new research from Bank of America.Analysts at the bank base their expectations on the fact that CLO equity market prices continue to lag, despite CLO NAV and interest distributions .......
Market Moves 29 March 2021
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CLO pricing service selected
Sector developments and company hires
CLO pricing service selected
SCI Valuations has been selected by Bloomberg’s Enterprise Data business to provide daily CLO debt pricing to integrate with Bloomberg’s Liquidity Assessment (LQA) tool. The integration of this data with LQA will enable Bloomberg customers to more effectively and easily view and manage their portfolios, the companies say.SCI Valuations provides automated valuations for US .......
Market Moves 25 March 2021
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Securitisation tax consultation underway
Sector developments and company hires
Securitisation tax consultation underway
The UK HMRC has launched a consultation seeking views on the taxation of securitisation companies. The UK government says it has identified - through ongoing dialogue with the industry - areas where it may be beneficial to make changes to such tax regulations and is therefore keen to explore the associated benefits and potential difficulties.Market Moves 24 March 2021
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Red Cross in humanitarian cat bond first
Sector developments and company hires
Red Cross in humanitarian cat bond first
Market Moves 23 March 2021
The first-ever humanitarian catastrophe bond covering pure volcanic eruption risk has been completed using a Guernsey ILS structure. Sponsored by the Danish Red Cross, the US$3m issuance was privately placed by Replexus and Howden Capital Markets via Dunant Re IC, an incorporated cell of Replexus ICC (Guernsey), which is managed in Guernsey by .......
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CLO fallback language reviewed
Sector developments and company hires
CLO fallback language reviewed
S&P has reviewed the indentures of the 870 CLOs it rates to assess Libor fallback language governing a transaction's liabilities. The majority (76%) of its rated CLO transactions closed between 2018 and 2020.ARRC-like fallback language can be found in 26% of the agency’s overall transactions, including 76% of the transactions that closed in 2020. .......
Market Moves 22 March 2021
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Assessing arrears
Withdrawal of UK support measures eyed
Most UK residential mortgage borrowers who took coronavirus-related payment holidays in 2020 have restarted payments. Indeed, performance data for UK RMBS master trusts shows that prime mortgage arrears did not increase after payment holidays ended in 2H20.
During 4Q20, early-stage mortgage arrears for UK prime RMBS master trusts averaged 0.49%, which is lower than pre-pandemic arrears and unchanged .......
News 22 March 2021
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MPL acquisition to accelerate auto financing
Sector developments and company hires
MPL acquisition to accelerate auto financing
Market Moves 19 March 2021
Upstart Holdings is set to acquire Prodigy Software, a provider of cloud-based automotive retail software. Upstart says it is seeking to reduce the cost of auto financing by creating a modern multi-channel purchase experience. Auto retail is among the largest buy-now-pay-later opportunities, according to the firm, and together with Prodigy it aims to help .......
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Chip shortages 'credit positive' for auto ABS
Sector developments and company hires
Chip shortages ‘credit positive’ for auto ABS
Market Moves 18 March 2021
Sizable auto production cuts due to semiconductor shortages in the US will provide support for used vehicle values, a credit positive for securitisations and captive auto finance companies, according to Moody’s. The rating agency notes that such shortages – which are expected to last at least into next quarter - could result in North .......