Talking Point

  • Scenario analysis

    Elena Rinaldi, portfolio assistant at TwentyFour Asset Manag...

    ABS is an asset class that lends itself well to detailed underwriting, from onsite due diligence through to cashflow and risk modelling. Specifically within the CLO sector, once TwentyFour Asset Management has reviewed the manager and the collateral, we focus on stress testing and sensitivity analysis. The hypothetical question "what if?" plays a fundamental role in assessing the resilience of .......

    Talking Point 12 January 2018

  • Provisioning differences highlighted

    UniCredit and Intesa Sanpaolo recently revealed differences over the ECB's provisioning guidelines, with the spotlight falling on non-performing loan recovery mechanisms. Speaking at IMN's Investors' Conference On Italian & European NPLs, representatives from the lenders also discussed their NPL strategies going forward.

    Carlo Viola, head of strategies and solutions at Intesa Sanpaolo, observed: "Automatic provisioning has to take into account .......

    Talking Point 27 November 2017

  • Call for increased standardisation

    Ahead of the EBA's public hearing tomorrow on its significant risk transfer (SRT) discussion paper (SCI 28 September), SCI undertook a straw poll of industry opinion on the document. The exercise revealed an overall positive response, although some areas for improvement were highlighted, especially regarding transaction standardisation.

    Giuliano Giovannetti, ceo of Arch Mortgage Insurance, says that the EBA's SRT guidelines .......

    Talking Point 16 November 2017

  • CRT outlook bullish

    Optimism prevailed at SCI's recent Capital Relief Trades Seminar, where panellists were bullish on the future of the risk transfer market. While capital relief trade activity has slowed this year compared to last, speakers concurred that issuance will grow in 2018, with a greater number of issuers and asset classes emerging.

    Kaikobad Kakalia, cio, Chorus Capital Management, said: "Towards the .......

    Talking Point 16 October 2017

  • What rhymes with synthetic CDO?

    DealVector coo and co-founder Dave Jefferds suggests that sy...

    Now that synthetic CDOs are back in vogue (SCI 15 August), will history repeat itself, or only rhyme? Over the last two years, volumes have grown from US$10bn to US$30bn for the instrument widely blamed for causing the 2008 global financial crisis. What gives, and should we be worried?

    To answer this question, it is important to understand what makes .......

    Talking Point 11 September 2017

  • Time to taper?

    Participants at IMN's Global ABS conference recently suggested that quantitative easing is likely to ease off in Europe soon, coinciding with a potential tapering of programmes like the Europe-wide ABSPP and TLTRO in the UK. While the view that tapering should begin was widely held, panelists were uncertain about how government support for the securitisation market should - and would .......

    Talking Point 19 June 2017

  • Marketplace ABS evolving

    At the upcoming SCI Marketplace Lending Securitisation Seminar in New York on 22 June, panellists will discuss the structuring and evolution of marketplace loan ABS. The fact that deals are increasingly incorporating features to reduce risk is one area that is expected to be covered.

    Ram Ahluwalia, ceo of PeerIQ, notes that more standardisation is still needed for .......

    Talking Point 5 June 2017

  • MPL ABS event to explore regulatory implications

    Industry participants will gather in New York on 22 June to discuss the major issues in marketplace lending securitisation at SCI's third annual MPL ABS seminar. The first panel will look at regulatory challenges and developments in the sector, including the future of the CFPB and the repercussions of the Madden v Midland case.

    The future of the CFPB is .......

    Talking Point 26 May 2017

  • European CLO investor base expands

    The European CLO investor base is broadening, thanks to less perceived volatility than in the US market. As well as the stability Europe offers, panellists at IMN's European CLOs and Leveraged Loans conference last month said that low defaults and strong collateral quality is driving renewed interest in European CLOs across the capital stack.

    While European investors have dominated the .......

    Talking Point 4 May 2017

  • European hot spots highlighted

    CLOs and RMBS are seen as the main growth areas in the European securitisation market at present. Drivers include a broadening of the investor base for the former and continued bank deleveraging for the latter.

    AFME data for 1Q17 shows that pan-European CLOs led placed European securitisation issuance, followed by UK RMBS and Dutch RMBS. Volumes across these sectors totalled .......

    Talking Point 24 April 2017

  • Euro CLO relative value discussed

    Identifying relative value in the current loan environment, where asset spreads are compressing, was a key theme at IMN's recent European CLOs and Leveraged Loans conference. Against the backdrop of rising refinancing and reset volumes, call optionality and manager style emerged as strong contenders.

    From a relative value perspective, Natixis ABS/CLO trader Peter Cui said that in terms of carry, .......

    Talking Point 19 April 2017

  • Today's RMBS opportunity deconstructed

    US RMBS continue to rally, supported by robust labour and housing markets, cheap credit and increasingly high-quality collateral. In this Q&A article, WyeTree ceo and cio Judith Sciamma explains that since RMBS also have several portfolio characteristics that institutional investors continue to search for in today's investment environment, the sector offers compelling value.

    Q: Why are real money investors looking .......

    Talking Point 10 April 2017

  • A nebulous concept

    Challenges in defining the cost of capital highlighted

    The challenges in defining the cost of capital were discussed extensively at SCI's recent Capital Relief Trades Seminar. Panellists agreed that it is a nebulous concept.

    "The most naïve view one usually starts with is that the cost of capital is effectively the coupon of the first year divided by the capital relief," said Jeremy Bradley, director at Lloyds. "Yet .......

    Talking Point 11 January 2017

  • Proving compliance

    Demonstrating significant risk transfer discussed

    How to demonstrate significant risk transfer (SRT) was a hot topic at SCI's Capital Relief Trades Seminar last month. Panellists discussed the importance of having robust governance and risk management processes in place, as well as what to avoid when preparing to execute a capital relief transaction.

    Articles 243 and 244 - which correspond to traditional (cash) and synthetic securitisations .......

    Talking Point 19 December 2016

  • Developing marketplace

    Key themes discussed as marketplace lending sector evolves

    Representatives from Orchard Platform, MountainView and Global Debt Registry joined SCI over the summer to discuss marketplace lending developments. This Q&A article highlights some of the main talking points from the session, including the importance of thorough due diligence and data verification, regulatory developments and the prospect of market consolidation. The full webinar can be viewed here.

    Q: .......

    Talking Point 28 November 2016

  • Disruptive opportunities

    Bijesh Amin, co-founder of Indus Valley Partners, discusses...

    Alternative asset managers see scope for investment opportunities in structured credit resulting from post-crisis regulatory changes, combined with the emergence of disruptive technologies, such as big data, P2P and AI. However, caveat emptor remains.

    Hedge funds trading structured credit asset classes, such as MBS and ABS, are utilising disruptive technologies to take advantage of opportunities in the sector as a .......

    Talking Point 18 November 2016

  • Uncertain intentions

    Valuers assess US election implications

    The US has had its 'Brexit moment', according to a panel of valuations experts at a Duff & Phelps press briefing in London yesterday (9 November). However, while the timing of the Brexit vote gave funds but a matter of days to reflect the impact on asset valuations, the timing of the unexpected US election result should provide valuers more .......

    Talking Point 10 November 2016

  • Converging approach?

    Current status of capital relief trades discussed

    Representatives from Chorus Capital, Citi and Clifford Chance recently discussed the current status of capital relief trades during a live webinar hosted by SCI (view the webinar here). This Q&A article highlights the main talking points from the session, including the impact of regulatory changes, the emergence of new assets and jurisdictions, and investor requirements. For a broader .......

    Talking Point 2 November 2016

  • Deleveraging opportunity

    Iain Balkwill, partner at Reed Smith, argues that securitisation is the answer to European NPL woes

    The balance sheets of European banks are currently stocked with huge volumes of non-performing loans (NPLs), which have largely festered while the banks have channelled their efforts towards recapitalisation. As recently demonstrated by the European Banking Authority stress tests, balance sheets have largely been strengthened, which has precipitated a marked shift in focus towards deleveraging the banks through the off-loading .......

    Talking Point 7 October 2016

  • Optimistic outlook

    Investors bullish on MPL, but changes needed

    Many interesting topics were raised about the current state and potential future of marketplace lending at SCI's Marketplace Lending and Securitisation Seminar in New York in June. During a panel on investor perspectives, several matters that concern buyers of marketplace loans were discussed.

    The turmoil at Lending Club was initially touched upon during the panel, as well as the subsequent .......

    Talking Point 11 August 2016

  • Going green

    Evolution of renewables ABS discussed

    Representatives from Renovate America, Kramer Levin and T-Rex recently discussed the development of the renewables ABS market during a live webinar hosted by SCI (view the webinar here). Focusing on the PACE and solar sectors, this Q&A article highlights the main talking points from the session, including structuring and performance considerations. For a broader and more in-depth exploration .......

    Talking Point 13 June 2016

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