Talking Point

  • 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

  • SCI Forum: does the STS regime work?

    Our expert responds to readers' questions

    Is STS doing what it is designed to do for the securitisation market?

    Daniel Hill, partner at Allen & Overy, gives his view

    The STS regime, introduced in the EU for traditional securitisations on 1 January 2019 (and then for synthetic securitisations in April 2021), aimed at increasing issuances, widening the securitisation investor base and cementing securitisation at the centre of the European .......

    Talking Point 7 January 2022

  • Angel Oak hits up MILNs

    In the third and final in our series of EOY interviews with...

    Colin McBurnette handles RMBS allocation for Angel Oak, and in 2021 he expanded the footprint of his portfolio into the mortgage insurance-linked note market for the first time.

    Heading into March 2020, Angel Oak had zero dollars in total MI exposure in its flagship Angel Oak Multi Strategy Income Fund (ANGIX), but this year it climbed to a peak of $400m. The fund will continue .......

    Talking Point 3 January 2022

  • Flowers among weeds

    CMBS yields value to canny buyers despite distress

    In the first of a series of interviews with SCI, investment managers discuss where they have seen most value recently and where they expect to see it in 2022.

    Despite - or because of  - the continued uncertainties that beset many areas of the CMBS market, this is the sector of the structured finance marker that currently offers the best returns to .......

    Talking Point 8 December 2021

  • Covid-19: Lessons for the CMBS market

    Iona Misheva, partner at Allen & Overy, explores the lessons that the pandemic provided for the European CMBS market

    Issuance has been at consistently high levels this year.  This has shown that the asset class recovered quickly from the temporary forces of the pandemic, which resulted in very few deals coming to market in 2020.  In contrast, 2021 has seen near record levels of .......

    Talking Point 6 December 2021

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