Talking Point

  • Decisive action

    Katie Skeels, associate at Hogan Lovells, examines current t...

    Hogan Lovells recently published a report - entitled 'Global Currents - Trends in Complex Cross-Border Disputes 2014' - which surveys current trends in cross-border disputes. The results suggest that senior executives and in-house counsel are proactively developing their dispute management strategies, including for securitisations, to suit the increasingly global business landscape.

    In an increasingly globalised economy, there are significant benefits .......

    Talking Point 15 April 2014

  • A new era in structured trade receivables finance?

    Reed Smith partner Nick Stainthorpe discusses new investors,...

    The increased interest from alternative investors in trade receivables is the result of a number of factors. These include: the high asset prices/low yields being experienced in other asset classes; the wariness of corporates to rely on a single source of supply chain/receivables finance in the post-crisis environment; on-going credit shortages in this sector in countries like Italy, Greece and .......

    Talking Point 25 March 2014

  • Delivering transparency

    While the financial services industry has to date focused on...

    News that the US SEC postponed a vote in early February regarding the adoption of rules revising the disclosure, reporting and offering process for ABS is disappointing, given the regulator's previously-stated determination to enhance transparency across ABS and MBS instruments. Transformation of this opaque asset class has been high on its agenda since Chairman Mary Shapiro noted the SEC's top .......

    Talking Point 20 March 2014

  • A merry-go-round of reform

    Anu Munshi, managing partner at B&B Structured Finan...

    Anyone trying to keep track of bank regulations should be excused for clutching their head, screaming or both. The dizzying rash of regulations - with their revisions, implementation dates and their interpretation by different regions - is enough to give one a headache.

    Take the credit valuation adjustment (CVA) charge for OTC derivative trades required by Basel 3 as an .......

    Talking Point 13 February 2014

  • European NPLs and the advantages of securitisation

    Dennis Buckley, director at Credit Mediation Limited, discus...

    Estimates from reports compiled by PwC and EY put the current volume of non-performing loans (NPLs) made by banks within the EU at between €1.2trn and €1.5trn, with these levels expected to rise further in the next few years. The market has seen a number of high-profile sales of large NPL portfolios, the most recent being Lloyds' sale of its .......

    Talking Point 7 January 2014

  • Pricing change

    CLO pricing methodologies and differences discussed

    Representatives from Bloomberg, CIFC and Kanerai discussed CLO pricing methodologies, as well as differences between legacy and 2.0 deals during a live webinar hosted by SCI in October (view the webinar here). Topics included changes in the underlying loan market and where to find relative value. This Q&A article highlights some of the main talking points from the .......

    Talking Point 16 December 2013

  • Exploring the whole loan alternative

    As rating agencies continue to alter the status of tranches...

    With the financial services sector continuing to rebuild following the financial crisis, investment funds are on the hunt for the highest yield opportunities to ensure investor satisfaction. This remains a core challenge, however, across most investment sectors as absolute yields remain low.

    Funds that have typically focused their trading strategies on RMBS are currently facing the difficulty of a series .......

    Talking Point 10 October 2013

  • Confidence boost

    Will bespoke single tranches make a comeback, asks Anu Munsh...

    Last month, JPMorgan and Morgan Stanley scrapped plans to launch a synthetic CDO. Apparently there wasn't enough interest from investors in the senior most tranche.

    But if investors were interested in the mezzanine and junior tranches, JPMorgan or Morgan Stanley could create bespoke single tranches for them. Activity in such tranches ran into hundreds of billions of dollars pre-credit crisis. .......

    Talking Point 24 July 2013

  • Benchmarking style

    CLO analytics approaches discussed

    Representatives from Moody's Analytics and ING Investment Management discussed how to leverage the latest analytics and data for CLO portfolio management, valuations and benchmarking during a live webinar, hosted by SCI in May (view the webinar here). Topics included manager style, differences between CLO 1.0 and 2.0 deals, and which data points to look out for. This Q&A article .......

    Talking Point 3 July 2013

  • Zombie deals: the living dead of structured credit

    Dave Jefferds, co-founder and COO of DealVector, examines ho...

    Five long years ago, the global financial crisis hit. Many deals imploded almost immediately, like ABS deals that blew through their event of default triggers. That capital was more or less destroyed.

    Other deals, like CLOs, were stretched but did not break at all. Their resilience allowed the structures to recover and that sector is now booming again.

    But there .......

    Talking Point 22 May 2013

  • Taking control

    Liquidity risk management practices discussed

    Representatives from Calypso Technology and Deloitte discussed Basel 3 and liquidity risk management in Asia Pacific during a live webinar, hosted by SCI in December (view the webinar here). Topics included the impact of the LCR and NSFR on banks, as well as how to align strategy with compliance. This Q&A article highlights some of the main talking .......

    Talking Point 8 February 2013

  • Dealing with data

    The operational challenges facing investors in an increasingly data-rich world

    For years, structured credit and ABS investors have struggled to get access to comprehensive data for the assets in their portfolios. Now, driven by regulatory initiatives in Europe, the UK and US, there is far greater transparency of data on securitisations.

    However, the job is far from complete. There are still gaps in the data set and, more importantly, investors .......

    Talking Point 6 June 2012

  • Seeking yield

    John Wells, chairman of Leadenhall Capital Partners, forecas...

    2011 will go down in history as one of the costliest years on record for insured losses from natural catastrophes, with Swiss Re estimating it to be the second worst to date, given losses of around US$116bn. With global news media focusing on an astonishing array of earthquakes, tsunamis, floods and tornadoes that have severely dented the balance sheets of .......

    Talking Point 20 April 2012

  • Balancing act

    Relative merits of covered bonds versus RMBS discussed

    Interest in covered bonds continues to grow, partly due to favourable regulatory treatment. However, panellists at a recent covered bond seminar hosted by S&P highlighted the potential dangers of over-promoting the instruments at the expense of other asset classes, such as RMBS.

    Neil Calder, head of investments - credit, treasury at the EBRD, noted during the seminar that RMBS transactions .......

    Talking Point 17 February 2012

  • Cat bonds on the up

    Thierry Berthold, co-head of insurance and European structur...

    There is good reason to be optimistic for the catastrophe bond market in 2012, particularly in Europe. Asset managers are showing an increasing willingness to accept cat bonds as a viable asset class and the increase in new capital via dedicated ILS funds is likely to continue, as experienced in 2011.

    This should maintain the virtuous circle, with more capital .......

    Talking Point 10 February 2012

  • Sovereign concerns

    Sovereign default and re-denomination risk remain

    European structured finance trading and issuance trends have been impacted by wider concerns stemming from the European sovereign debt crisis - particularly towards the end of 2011, when spreads moved steadily wider and issuers shied away from the primary market. While the market appears to have started 2012 with renewed confidence, several unfavourable scenarios remain possible, such as a sovereign .......

    Talking Point 8 February 2012

  • You say voluntary, I say mandatory...

    Anu Munshi, partner at B&B Structured Finance, explo...

    An old school friend with a great business idea comes to you and three other similarly well-off school friends and asks if you'd lend him money for his business. He needs US$40,000 and expects he can pay it back in one year with 10% interest. The four of you agree to lend him the money, each one giving US$10,000.

    In .......

    Talking Point 24 January 2012

  • Should triple-A be the only way for structured finance?

    Andrew South, senior director and head of European structure...

    Investors in structured finance securities remain highly focused on triple-A ratings - and, consequently, so do issuers. But with banking system and sovereign risks recently increasing, triple-A ratings are becoming more difficult to achieve. In our view, market participants also tend to pay too little attention to what a triple-A rating for a given security actually means, based on the .......

    Talking Point 11 January 2012

  • When Cayman directors fail to act

    Richard Ruffer, svp at Walkers Management Services in the Ca...

    The recent US Bankruptcy Court decision in In re Zais Investment Grade Limited VII, No. 11-20243 (Bank. D. N.J. August 26, 2011) raises troubling concerns for investors in CDOs. The decision rejected a motion to dismiss an involuntary bankruptcy order entered against a Cayman Islands CDO.

    As a result, the case opens the door for struggling Cayman CDOs to be .......

    Talking Point 22 September 2011

  • Rating the ratings

    Blaise Ganguin, chief credit officer at S&P, looks a...

    Amid all the discussion about the role of credit ratings in financial markets, their actual performance has often been misunderstood. Ratings are forward-looking opinions of relative creditworthiness, so their performance can be measured by how well correlated they are over time with defaults and by the rate at which they change.

    The key test is whether ratings have, generally speaking, .......

    Talking Point 10 June 2011

  • Three misconceptions about issuer-paid ratings

    CapitalFusion Partners mds Malay Bansal and John Joshi argue...

    The issuer-paid model for ratings is widely seen as one of the most significant aspects of the process that needs to be reformed. Issuers select which NRSROs will rate their deal and they pay the rating agencies rating their deals. Many blame this dynamic for causing a conflict for the agencies and enabling ratings-shopping by issuers.

    This is perhaps seen .......

    Talking Point 27 May 2011

×