Talking Point

  • CEE it to believe it

    Three major talking points from SCI's Emerging Europe SRT Seminar in Warsaw

    Over 100 SRT practitioners gathered in the Polish capital for SCI’s inaugural Emerging Europe SRT Seminar last week. Panellists spoke about their excitement for the market, barriers to entry for new players and everyone’s favourite villain - regulations.

    1. A booming market

    “Since Covid and somebody in the Kremlin, who shall remain nameless, Europe was forced .......

    Talking Point 27 June 2024

  • Embracing diversity

    Regulators urged to recognise importance of internal models

    Recent proposals regarding the application of the revised Basel 3 standards in the UK and the US favour the standardised approach and include strict restrictions on the use of internal models for calculating regulatory capital. A new paper from PGGM outlines the firm’s concerns that such standardised risk weights oversimplify the diversity in the real world and could disincentivise .......

    Talking Point 19 June 2024

  • Tailoring TRS

    Markus Musielak, md, working capital structuring at Demica,...

    Trade receivables securitisations (TRS) remain resilient and of an increasing focus following the end of low interest rate environments, as companies seek affordable financing tailored to their precise working capital requirements.

    With expectations that the economies in the UK and the eurozone have avoided a recession of any significant depth (or even a recession at all), the TRS market .......

    Talking Point 14 June 2024

  • Serious business

    ESG's evolving role in structured finance unpacked

    ESG is still a top priority within structured finance, despite competing concerns stemming from rising interest rates. Panellists at SCI’s ‘Unpacking ESG’ webinar last week affirmed the enduring importance of sustainability initiatives in the securitisation market to participants, even amid a recent lull in activity. However, while demand for ESG-linked securitisation may stand strong, precisely what ESG means for .......

    Talking Point 4 April 2024

  • Hot, hot, hot!

    Four takeaways from IMN's SRT Symposium

    SCI attended IMN’s SRT Symposium at Clifford Chance last week. Based on our takeaways from the conference, here are the four things every SRT enthusiast needs to know:

    1. Investor interest

    “SRT is seriously hot!” Kaikobad Kakalia, cio of Chorus Capital Management and a speaker on the first panel of the day, told audience members. “Taylor Swift was .......

    Talking Point 28 March 2024

  • Navigating market volatility

    Mike Nowakowski, md and head of structured products at Conni...

    Institutional investors navigating market volatility increasingly seek asset classes offering unique yield opportunities and portfolio diversification. One such asset class garnering attention and capital is esoteric ABS.

    Esoteric ABS are very similar to traditional auto and credit card ABS, but the collateral may be less familiar. Most esoteric ABS deals can be divided into three large categories based .......

    Talking Point 27 March 2024

  • Unlocking potential

    Embrace neurodiversity to drive success in securitisation

    Neurodiversity is gaining more recognition as a crucial component in the pursuit of gender diversity and inclusion in structured finance. This year’s theme of ‘inspiring inclusion’ for International Women’s Day underscores the imperative to address the hidden challenges women face on top of gender. 

    The rising numbers of later-life diagnosis of Attention Deficit Hyperactivity Disorder (ADHD) and Autism .......

    Talking Point 8 March 2024

  • Reaching for the Starz

    Future of European CRE CLO market contemplated

    Despite no new issuance since Starz Realty Capital’s debut in 2021 (SCI 9 December 2021), the underlying message from those closest to the European CRE CLO market is simple: it’s better than the headlines are making it seem. With just one public deal closed in Europe thus far, CRE CLOs still stand up as a strong funding tool .......

    Talking Point 8 January 2024

  • Communication skills

    CRE loan-on-loan financing a 'relationship-oriented business'

    Speakers on the loan-on-loan financing panels at SCI’s inaugural European CRE Finance Seminar last month stressed the importance of a good working relationship between lender and borrower. They also noted that “capital is king” for banks, pointing to securitisation as an effective way to lower RWA treatment for such lending.

    Commercial real estate loan-on-loan financing is a relationship-oriented .......

    Talking Point 22 December 2023

  • Basel banks

    Banks forced away from loans and into low RWA assets in 2024

    An unintended consequence of the implementation of Basel III endgame rules in the US is that banks will be forced into more capital efficient agency MBS at the expense of loans, according to Mohib Karzai, head of agency MBS trading at JP Morgan.

    Talking Point 20 December 2023

  • Global Risk Transfer Report: Chapter six

    In the final chapter of our report surveying the synthetic s...

    IACPM’s latest risk-sharing survey notes that 2022 highlighted not only a substantial growth in SRT product utilisation by banks, with €200bn in new issuance, but also some structural changes in the risk-sharing activity of banks. Nevertheless, a number of regulatory challenges remain outstanding.

    SCI’s Global Risk Transfer Report examines how the risk transfer community is addressing these .......

    Talking Point 6 December 2023

  • Digital download

    Up, up and away for digital infrastructure market in 2024

    There has been dramatic growth in the US esoteric securitization market in the last three years or so, but the pace isn’t about to slip, says Michael Nowakowski, director and interim head of structured products at Conning, a Hartford, Connecticut-based investment manager which .......

    Talking Point 5 December 2023

  • Global Risk Transfer Report: Chapter five

    In the fifth of six chapters surveying the synthetic securit...

    IACPM’s latest risk-sharing survey notes that 2022 highlighted not only a substantial growth in SRT product utilisation by banks, with €200bn in new issuance, but also some structural changes in the risk-sharing activity of banks. Nevertheless, a number of regulatory challenges remain outstanding.

    SCI’s Global Risk Transfer Report examines how the risk transfer community is addressing these .......

    Talking Point 29 November 2023

  • Treasury overhang

    Unprecedented Treasury supply dominates agency MBS story for 2024

    The enormous Treasury issuance expected next year forms a long shadow falling over the agency MBS market, say investors.

    Estimated 10-year Treasury issuance is now projected to be US$1.34trn in 2024, some US$90bn more than earlier estimates and breaking previous records. Assuming the Federal Reserve extends quantitative tightening, overall 10-year Treasury supply will exceed US$1.5trn.

    “The biggest risk to agency MBS is Treasury supply. .......

    Talking Point 27 November 2023

  • Global Risk Transfer Report: Chapter four

    In the fourth of six chapters surveying the synthetic securi...

    IACPM’s latest risk-sharing survey notes that 2022 highlighted not only a substantial growth in SRT product utilisation by banks, with €200bn in new issuance, but also some structural changes in the risk-sharing activity of banks. Nevertheless, a number of regulatory challenges remain outstanding.

    SCI’s Global Risk Transfer Report examines how the risk transfer community is addressing these .......

    Talking Point 22 November 2023

  • Inflection point?

    Dennis Heuer, partner at White & Case, discusses the...

    Q: Having historically been secretive and opaque, is the SRT market likely to transition from highly private to increasingly more syndicated deals? Are we witnessing an inflection point? 
    A: I wouldn’t describe it as a clear shift but rather something I can foresee happening. Currently the market is divided between small club (often anchored by one lead investor) or bilateral .......

    Talking Point 15 November 2023

  • Global Risk Transfer Report: Chapter three

    In the third of six chapters surveying the synthetic securit...

    IACPM’s latest risk-sharing survey notes that 2022 highlighted not only a substantial growth in SRT product utilisation by banks, with €200bn in new issuance, but also some structural changes in the risk-sharing activity of banks. Nevertheless, a number of regulatory challenges remain outstanding.

    SCI’s Global Risk Transfer Report examines how the risk transfer community is addressing these .......

    Talking Point 15 November 2023

  • Global Risk Transfer Report: Chapter two

    In the second of six chapters surveying the synthetic securi...

    IACPM’s latest risk-sharing survey notes that 2022 highlighted not only a substantial growth in SRT product utilisation by banks, with €200bn in new issuance, but also some structural changes in the risk-sharing activity of banks. Nevertheless, a number of regulatory challenges remain outstanding.

    SCI’s Global Risk Transfer Report examines how the risk transfer community is addressing these .......

    Talking Point 8 November 2023

  • Global Risk Transfer Report: Chapter one

    In the first of six chapters surveying the synthetic securit...

    IACPM’s latest risk-sharing survey notes that 2022 highlighted not only a substantial growth in SRT product utilisation by banks, with €200bn in new issuance, but also some structural changes in the risk-sharing activity of banks. Nevertheless, a number of regulatory challenges remain outstanding.

    SCI’s Global Risk Transfer Report examines how the risk transfer community is addressing these .......

    Talking Point 1 November 2023

  • Subprime auto is not the next credit crisis

    Vadim Verkhoglyad, vp and head of research publication at dv...

    Many view the US subprime auto market as a ‘canary in the coal mine’, equating facts like rising delinquencies to an indication of a looming financial crisis. This perspective is false and its adoption could decrease subprime activity and exclude borrowers from a critical market. It is crucial that market participants acknowledge the broader context of subprime auto loans .......

    Talking Point 23 October 2023

  • Mezz opportunities

    Pretium structured credit and CLO liabilities MD Ian Wolkoff...

    US CLO mezzanine debt offers high expected return rates, with yields maintained under a default scenario more extreme than the GFC credit cycle and with upside potential in a market recovery scenario.

    CLO debt offers strong long-run expected returns with bounded downside
    In the current market context, macro uncertainty and the potential for a growth downturn loom large while .......

    Talking Point 28 June 2023

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