Babson CEO Finke: CLOs Often Unfairly Judged

At an IMN conference, Tom Fine laid into a recent article in Fortune likening CLOs to both CDOs and troublemaking legacy RMBS. His message: CLO pros have to be better self-advocates.

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Latest News

IMN Panel Sees Robust Demand for CLOs

– Structured credit experts at an IMN conference said investor demand for collateralized loan obligations will stay robust for the foreseeable future, despite regulatory hurdles and reports of declining collateral quality.

N.Y.'s Lawsky Targets 'Self-Dealing' by Ocwen, Realty Affiliates

– New York regulator Benjamin Lawsky has raised fresh concerns about potential "self-dealing" by Ocwen with affiliated businesses. It's another headache for this active securitizer.

CFPB Likely to Ease Rules on Fees for QM Loans

– Bankers, mortgage lenders and real estate brokerage firms are expected to win some relief soon from a provision of the qualified mortgage rule that restricts fees paid to affiliates.

Wells Fargo, RBS Market $1.3B CMBS Conduit

– The banks’ WFRBS 2014-C20 transaction is backed by 98 fixed rate commercial mortgage loans that are secured by 142 properties.


Featured Articles

Push for Transparency in MBS Raises Data Security Fears

– Disclosing loan-level data is crucial to rebuilding investor confidence in mortgage-backed securities. It also introduces the risk of compromising borrowers' personal information.

Inside Look at Toyota's 1st Green Auto Bond

– The automaker considered different ways to structure the deal, but decided against a transaction backed exclusively by hybrid loans and leases, says Adam Stam, manager of ABS and structured finance at Toyota Financial Services.

California Sets the PACE Again

– The Western Riverside Council of Governments securitizes Property Assessed Clean Energy Bonds.

Standardization Key to Cutting Solar Funding Costs

– Theresa Alafita, Joshua Pearce of Michigan Technology University argue that aggreggating standardized assets is key to solar securitization, which can meaningfully reduce funding costs for developers.

What a Shrinking Federal Backstop for Terrorism Insurance Means for CMBS, ILS

– Impending legislation renewing the federal backstop for terrorism insurance could pare down this safeguard, creating havoc in the market for commercial mortgage-backed securities; despite advances in modeling this risk, it may prove challenging for capital markets investors to pick up the slack.

Inching Toward Finale on FATCA

– The latest update to the Foreign Account Tax Compliance Act appears to grandfather most collateralized loan obligations issued before January 2013.

Burden of Student Loans Stifles the Housing Market

– With more young adults making large student loan payments instead of saving up for a down payment, combined with car payments and possibly credit card debt, the 43% DTI becomes a very difficult barrier for lenders working within the QM standards.

Mortgage Shortage Drives Banks into Lower FICOs

– Banks are lending to slightly riskier borrowers in order to sustain origination, as higher interest rates have eaten into volumes. When these loans might end up in a securitization remains an open question.

Cheat Sheet: Details from the Johnson-Crapo GSE Bill

– The bill released by Sens. Tim Johnson and Mike Crapo would create a reinsurance fund to recoup losses on securities, establish a common securitization platform for the secondary mortgage market and open access to the secondary market for smaller lenders through a cooperative.

Private Alternative for Flood Insurance Gaining Traction

– The powerful storm surge produced by Hurricane Sandy has added momentum to the federal government’s efforts to farm out a portion of the risk now borne by the National Flood Insurance Program, and there appears to be a strong appetite in the private market.

Possible Workaround to EU Risk Retention for US CLOs

– Managers and arrangers of U.S. collateral loan obligations have struggled to satisfy the European Union’s risk retention requirement. However, the final draft rules published by the European Banking Authority include a new concession that may assist U.S. managers in accessing an investor base in the region.

Cracking the Tape on Student Loans

– Dan Feshbach, founder and CEO of MeasureOne, thinks that disclosure of loan-level data can do for the student loan market what it did for mortgages: deepen the market for securitization.

How to Judge the Senate Banking GSE Reform Bill

– The biggest issue at hand is the nature of private-public risk-sharing in mortgage credit risk; for the next generation secondary market to thrive, there must be some limited form of government guarantee present to reduce potential investor flight during times of crisis.

Another Volcker Workaround for CLOs

– While lawmakers continue to press regulators to exempt collateralized loan obligations from Volcker Rule restrictions, managers of these deals have found another workaround – and this one allows them to invest in bonds.

Senate Banking GSE Reform Bill Nears Completion

– Senate Banking Committee leaders are expected to soon unveil their highly anticipated bipartisan bill to overhaul the mortgage finance market as the window for moving legislation this year continues to narrow

Regulator's Move Raises Tough Questions for Ocwen

– By halting Ocwen Financial's deal to buy a mortgage servicing portfolio from Wells Fargo, New York regulator Benjamin Lawsky has called into question the servicer's ambitious growth plans.


– Canada's covered bond market restarts, slowly, under a new legislative framework.

Perils Continue to Attract Capital, Crowding Reinsurance

– Demand for catastrophe bonds and other insurance-linked securities far outstrips supply, resulting in lower yields, more issuer-friendly terms and a wider tolerance for unrated deals.

CLOs Prepare for Life Without Bonds

– Most new collateralized loan obligations have the ability to invest in bonds, but only if regulators clarify certain Volcker Rule language.


Current Issue

California Sets the PACE Again

The Western Riverside Council of Governments securitizes Property Assessed Clean Energy Bonds.

Current Issue


ABS East 2013
Highlights from Information Management Network's ABS East Conference.