Talking Point

  • CLOs in an age of economic uncertainty

    We are currently going through a difficult economic environment – with rising interest rates, a credit squeeze, inflation and currency volatility, explains Rob Reynolds, md and head of CLOs at Pemberton.

    After years of cheap money, investors are naturally being more cautious and selective about where they invest their money.

    CLOs are one product that has consistently served as a buffer .......

    Talking Point 3 October 2022

  • Reciprocal relationship

    Increased market volatility has raised asset allocator demand for private credit strategies, particularly structured credit. Hildene Capital Management explains how structured credit asset managers and insurers can work together in today’s volatile market.

    Insurance companies are among the investors leading the way in understanding how this unique asset class – known for its enhanced yields and credit protections – can .......

    Talking Point 24 August 2022

  • Tangible benefits

    Ali Ben Lmadani, founder and ceo of ABL Aviation, argues tha...

    Central banks across the globe are tightening monetary policy to curb the highest inflation rate in more than four decades. It’s been a rough ride for consumers – food and living costs have soared, as well as the price of energy. In late July, the US Federal Reserve – which, due to its influence, is a benchmark for the .......

    Talking Point 19 August 2022

  • Uncertainty prevails

    Macroeconomic backdrop in focus

    Thus far, 2022 has experienced some turbulent and choppy market conditions. Although poor performance has not yet affected the securitisation sector, the consensus – at least, in evidence during AFME and IMN’s Global ABS conference last month – is that uncertainty prevails and investor sentiment is predominantly focused on the macroeconomic backdrop.

    During this period of market dislocation, .......

    Talking Point 12 July 2022

  • What is the future of the CRE market?

    Despite the fluctuations in the capital markets this year, European warehouse funding for granular, small and medium balance commercial real estate mortgage loans remains stable, explains Sabah Nawaz, partner, Cadwalader, Wickersham & Taft LLP.

    This is particularly the case in the “loan on loan” warehouse space. “Loan on loan” funding typically involves an institutional lender advancing loans to a SPV .......

    Talking Point 5 July 2022

  • Changing the paradigm

    John Pellew, principal, distribution and securitisation at A...

    In isolation and in the absence of mitigating factors, non-performing loan and distressed assets are inherently high-risk investments, but that’s not the whole story.

    While it’s true that we are dealing with defaulted loans and distressed assets, these assets are not sold in isolation or single units, and they are not sold because they have no value. They .......

    Talking Point 23 June 2022

  • European CLO structures: Are the foundations changing?

    James Smallwood, senior associate at Allen & Overy, examines whether the foundations are changing for European CLO structures

    What's in a name? Or, more appropriately for CLOs, what's in a number? And while there are many important numbers and figures in a CLO transaction (obviously), here and in particular, I'm referring to some pretty low digits – one, two and .......

    Talking Point 16 June 2022

  • Office sector concerns

    The return to work has brought arguably more uncertainty than the initial transition to working from home, explains Steve Jellinek, head of CMBS research at DBRS Morningstar.

    Uncertainty remains a key theme as corporate occupiers look to assess their current portfolios against their future office requirements. They must accommodate everyone who could be present in the building at any given time and .......

    Talking Point 25 May 2022

  • Time for the European CRE CLO to prepare for take-off

    If all indicator lights hold true, then the European CRE CLO market is primed and ready for take-off, explains Iain Balkwill, partner at Reed Smith.

    Indeed, if this market manages to follow the same eye-watering trajectory of growth experienced in the United States, then not only are we in for a majestic ride but this could be truly transformational for .......

    Talking Point 19 May 2022

  • The Importance of ESG in credit ratings

    Matthew Mitchell, senior director at S&P Global Ratings, explains why ESG is becoming an increasingly important factor when it comes to credit ratings of all types

    That is why S&P Global Ratings recently announced it will publish ESG credit indicators for structured finance transactions to increase the transparency of how these factors influence its credit rating analysis. The ESG credit indicators .......

    Talking Point 26 April 2022

  • Covid-19: The effects on the securitisation sector

    TJ Durkin, head of structured credit at Angelo Gordon explores the immediate and longer-term effects of the pandemic on securitisation markets

    Since the Global Financial Crisis (GFC), structured credit markets have often been described as “resilient” given conservative underwriting and collateral fundamentals over that period. Household leverage has considerably declined, and debt-service sits near historic lows – in stark contrast to corporations .......

    Talking Point 5 April 2022

  • How can I manage a thriving CLO platform?

    Dana Carey, cio, MidOcean Credit Partners, explains that managing a successful CLO platform is like assembling a jigsaw puzzle – there are many complex pieces that need to fit together for it to create an efficient, effective and cohesive final product.

    In a universe of more than 100 CLO managers, since the financial crisis, few have done much to differentiate .......

    Talking Point 28 March 2022

  • What makes an efficient CLO manager?

    Phil Raciti, head of performing credit and a portfolio manager at Bardin Hill, explains the key attributes needed to be successful as a CLO manager

    The CLO asset class operates within a sophisticated construct of arbitrage, leverage, and structural protections. Having navigated multiple recessions and the most significant period of issuer downgrade activity on record in 2020, the asset class has .......

    Talking Point 14 March 2022

  • 'We all have a part to play'

    Celebrating IWD: on attracting more women to leadership positions

    Lucy Oddy, securitisation partner at Allen & Overy, is perceived as lucky to work in a team full of female talent. But, in the final article of our series celebrating International Women’s Day, she puts it down to a winning combination of supportive male colleagues and senior female role models.

    I was describing my team to a candidate the other .......

    Talking Point 9 March 2022

  • Boosting the bottom line

    Celebrating IWD: on the need for equal pay

    Firms with diverse leadership are 21% more likely to outperform from a profitability perspective, according to findings in McKinsey & Company’s Diversity Series. In the second article in SCI’s series celebrating International Women’s Day, Stephanie Mah, svp, structured finance research at DBRS Morningstar, argues that pay equity is paramount in retaining female representation in the securitisation industry.

    “In diversity there .......

    Talking Point 8 March 2022

  • Paying it forward

    Celebrating IWD: on empowering the next generation of women

    Alston & Bird’s structured finance practice is notable in the industry for being led by female partners and for women making up the majority of the overall team. For the third article in our series celebrating International Women’s Day, these leaders sat down with SCI deputy editor Angela Sharda to discuss how recruitment and retention policies, as well as mentoring .......

    Talking Point 8 March 2022

  • 'Show, don't just tell...'

    Celebrating IWD: on why women need more leadership role models

    That diversity increases innovation and competitiveness for business is well-understood, but efforts to embrace it may still only be window-dressing in the case of the securitisation market. In the first article in our series celebrating International Women’s Day, Tamara Box, managing partner EME and head of structured finance at Reed Smith, outlines her views on why women need more role .......

    Talking Point 7 March 2022

  • Which probability is the probability of default?

    Jack Xu, founder of Modtris Financial Modelling, outlines tw...

    Probability has been used to define, measure and price risks in the financial market for a long time. For CLO managers and investors in particular, default risk is firmly equated to the probability of default. The meaning of probability may be self-evident from the example of counting faces and tails in coin tosses, but is the probability of a .......

    Talking Point 28 February 2022

  • Positive outlook

    Tapan Jain, portfolio manager at Hildene Capital, shares his views on the CLO market

    2021 proved to be a banner year for the CLO market, from a returns perspective and also through the lens of the market’s “maturity”. Relentless issuance was met by strong demand that pushed the total market size through $1trn. CLOs are now the largest asset class within the .......

    Talking Point 3 February 2022

  • How will the CLO market fare in 2022?

    Vibrant Capital Partners shares how it expects CLOs to perform in 2022

    Once a niche, widely misunderstood asset class, CLOs have proven resilient across credit cycles, transforming into a core allocation for institutional investors. Today, the global CLO market is over US$1trn in size and includes participation from pension plans, insurance companies, and other mostly institutional investors who have reaped the rewards of CLOs’ solid performance. In sum, the tailwinds are strong, and the .......

    Talking Point 21 January 2022

  • Same as ever?

    Davis+Gilbert partner Joseph Cioffi reflects on the performa...

    The pandemic has been a surprising boon to the subprime auto ABS market, due to supply issues that have raised collateral values and a potent mix of government support and private actions that have bridged consumers through financial distress. The pandemic’s persistence is now calling into question how long favourable conditions may continue and what normalisation will look like. .......

    Talking Point 18 January 2022
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