Talking Point

  • 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

  • Don't compare

    Collaboration key to ESG progress

    Comparison may be the thief of all ESG-joy for the securitisation market, as attendees at SCI’s 2nd Annual ESG Securitisation Seminar this week reflected on how far the industry has come since the inaugural ESG issuance seven years ago. Different financial sectors adopt different definitions for ESG and thus also face different challenges. However, given such differences, more praise .......

    Talking Point 28 April 2023

  • Cautious optimism

    Moody's Analytics Chief Economist Mark Zandi shares his views

    SCI talked with Moody’s Analytics Chief Economist Mark Zandi ahead of his economic outlook keynote at Information Management Network’s 12th Annual Investors Conference on CLOs & Leveraged Loans in New York on April 17-18, 2023.

    In general, the financial market mood is one of caution, but there is also room for some optimism, especially in the CLO .......

    Talking Point 18 April 2023

  • SEC-SA and the death of public securitisation

    Adam Croskery, head of debt financing and structuring at Arr...

    In the early 2010s, I was a mortgage structurer at the forefront of the birth of NC2.0 (the non-conforming 2.0 sector). Even before then, I rated RMBS transactions at a major rating agency. If anyone should be a cheerleader for public securitisations, it’s me.

    There is no doubt that public transactions are academically appealing (if somewhat exhausting) to .......

    Talking Point 8 March 2023

  • Diversification possibilities

    Pawel Turek, counsel at DLA Piper, outlines how trade receiv...

    In most cases when economic entities need financing, they use traditional methods of obtaining funds. They take out loans, borrowings or issue bonds. But companies that issue invoices and have a very large number of contractors can also consider factoring.

    Factoring allows for the sale of receivables before the maturity date and in exchange for an agreed discount .......

    Talking Point 26 January 2023

  • Seeking stability

    Philip Pirecki, head of business development at Jersey Finan...

    There are few things more disruptive to the investment management industry than instability. Financial institutions are experts in managing risk in their investments. One of the reasons they can achieve this is due to developed processes for anticipating and predicting events – they can rely on their models. Managers expect the same for their operations.  

    Structured finance .......

    Talking Point 19 January 2023

  • Global Risk Transfer Report: Chapter six

    In the final chapter of SCI's survey of the synthetic securi...

    Synthetic securitisation, once tarnished by association with the global financial crisis, has long since come in from the cold. The regulatory framework has developed significantly in Europe since the introduction of the new European Securitisation Regulation in January 2019, culminating in the inclusion of significant risk transfer transactions in the STS regime in April 2021. This label has provided .......

    Talking Point 8 December 2022

  • Global Risk Transfer Report: Chapter five

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

    Synthetic securitisation, once tarnished by association with the global financial crisis, has long since come in from the cold. The regulatory framework has developed significantly in Europe since the introduction of the new European Securitisation Regulation in January 2019, culminating in the inclusion of significant risk transfer transactions in the STS regime in April 2021. This label has provided .......

    Talking Point 1 December 2022

  • Don't panic!

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

    Concerns of a recessionary impact on US consumer markets, and comparisons to the global financial crisis, are rampant across the media. This fearmongering is not accurate, is harming the market and is not in our best interest.

    Widespread media analysis suggests that we are in a crisis: headlines focus on the increase in subprime auto delinquencies, the downturn .......

    Talking Point 29 November 2022

  • Global Risk Transfer Report: Chapter four

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

    Synthetic securitisation, once tarnished by association with the global financial crisis, has long since come in from the cold. The regulatory framework has developed significantly in Europe since the introduction of the new European Securitisation Regulation in January 2019, culminating in the inclusion of significant risk transfer transactions in the STS regime in April 2021. This label has provided .......

    Talking Point 24 November 2022

  • Global Risk Transfer Report: Chapter three

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

    Synthetic securitisation, once tarnished by association with the global financial crisis, has long since come in from the cold. The regulatory framework has developed significantly in Europe since the introduction of the new European Securitisation Regulation in January 2019, culminating in the inclusion of significant risk transfer transactions in the STS regime in April 2021. This label has provided .......

    Talking Point 17 November 2022

  • Global Risk Transfer Report: Chapter two

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

    Synthetic securitisation, once tarnished by association with the global financial crisis, has long since come in from the cold. The regulatory framework has developed significantly in Europe since the introduction of the new European Securitisation Regulation in January 2019, culminating in the inclusion of significant risk transfer transactions in the STS regime in April 2021. This label has provided .......

    Talking Point 10 November 2022

  • British buffer

    UK RMBS set to weather recession

    The outlook for UK RMBS remains uncertain - despite optimism over borrower wealth buffers - as the country enters into its third government in three months. Amid such a rapidly changing policy environment, monetary policy and inflation rates – which continue to rise – are expected to be the two chief trends determining prospects for the housing market as .......

    Talking Point 7 November 2022

  • Global Risk Transfer Report: Chapter one

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

    Synthetic securitisation, once tarnished by association with the global financial crisis, has long since come in from the cold. The regulatory framework has developed significantly in Europe since the introduction of the new European Securitisation Regulation in January 2019, culminating in the inclusion of significant risk transfer transactions in the STS regime in April 2021. This label has provided .......

    Talking Point 3 November 2022

  • CRE CLOs: time to zig when others zag

    When it comes to structured commercial real estate (CRE) credit, the European market is at a pivotal juncture, explains Iain Balkwill, partner at Reed Smith.

    Last year proved to be a ground-breaking year for the asset class; we saw a record volume of CMBS issuance and in an industry first, Starz Real Estate brought Europe’s first ever CRE CLO to .......

    Talking Point 19 October 2022

  • Stormy weather

    Increased default and downgrade risk for CLOs

    The US CLO market has thus far sailed through the storms of 2021 and 2022 in eminently seaworthy condition. However, with recession now looming, the sector faces increased downgrade and default risks.

    “Loan defaults have started to pick up in the US since August, and six loans totalling US$12bn have defaulted. Meanwhile, loan downgrades have also escalated in some of .......

    Talking Point 12 October 2022

  • 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

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