Why Potential for Consolidation Among CLO Managers May Be Overhyped

While risk retention will hit smaller managers hard, Oliver Wriedt of CIFC Asset Management, one of the biggest, thinks the potential for consolidation may be overstate. Low management fees and high financing costs make acquisitions less attractive than they have been in the past.

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Latest News

Newtek Makes Late Entry With $31M Small Biz Loan ABS

– The deal, NBSLT 2014-1, is backed by an amortizing pool of the non-guaranteed portion SBA Section 7(a) small business loans.

DLJ Mortgage Capital Plans Reperforming RMBS

– Approximately 90.2% of the loans in the pool are fully-amortizing, fixed-rate mortgages, 7.6% are fully-amortizing, adjustable-rate mortgages and 2.3% are adjustable rate mortgages that pay only interest for periods of either seven or ten years.

American Homes 4 Rent Prices 3rd Single Family Rental Deal

– The $530 million of 10-year bonds are backed by 4,503 single-family rental homes; they were sold with a weighted average coupon rate of 4.395%.

Navient Prices Upsized $1B FFELP Student Loan ABS

– NAVSL 2014-8 began marketing last week and was upsized by $258 million on investor demand; the 6.3- year senior bond priced at a spread of 60 basis points over one-month Libor.


Featured Articles

How Volcker Rule Will Stir Up the CLO Market

– The market for collateralized loan obligations hit an all-time high in 2014 — but the onset of a number of regulatory requirements, including the Volcker Rule, mean the good times may not last long.

CLO Manager Shakeout May Come Earlier Than Expected

– John Lapham, co-head of leveraged finance at PineBridge Investments, thinks that the ranks of CLO managers could start to thin well before risk retention rules take effect in 2016.

Morningstar's Prescription for Ratings Shopping: Disclosure

– Morningstar thinks that there is a way to stop issuers of asset-backed securities from shopping around for the best ratings: compel them to publicly disclose the level of credit enhancement required by each rating agency for each tranche.

GSEs Risk-Sharing Deals Are Good for Housing Market

– Not only do these deals reduce the danger that taxpayers could be forced to cover the GSEs' losses, they may help make mortgages more affordable.

Will the Republican Congress Advance GSE Reform?

– Will government-sponsored enterprise reform be affected by Republicans taking back control of the Senate? The first reactions from the industry and punditry indicate there are three possibilities: yes, no, and we can't be sure.

Catastrophe Bonds Taking on New Perils

– Investors in catastrophe bonds are broadening their exposure by taking on multiple perils and increasing the time period during which claims can be included in coverage. Often they are doing so without any additional compensation.

In Rating P2P Securitizations, Aligned Interests Matter

– Why is Social Finance the only peer-to-peer lender to secured credit ratings for its deals? It originates its own loans and has shifted away funding from retail investors in favor of institutional investors.

The Real Reason Servicer Advance Securitization is on Hold

– Ocwen Financial's regulatory woes have put future transfers of mortgage servicing rights on hold; but securitization of advance receivables had already stalled while Standard & Poor's updated its ratings criteria for the asset class.

Why Monroe Capital Took Its Time with Second CLO

– The middle market that the firm plays in is less liquid and less transparent than the broadly syndicated loan market, so picking up primary loans is key for a collateralized loan obligation. And what better way to do that than to have your own origination platform?

Single Family Rental Lender B2R Goes with the Cash FLow

– Buy-to-rent mortgage specialist B2R behaves like a commercial lender when underwriting loans to small-to-medium landlords, an approach that differs from the residential lens the GSEs use for individuals looking to buy rental properties.

What Risk Retention Means for CMBS, Autos, CLOs

– Risky mortgage lending may have triggered the financial crisis, but final risk retention rules go much easier on mortgages than securitizations of other kinds of assets.

Moody's: Rising Rates Will Reduce Excess Spread for CLOs

– Rising interest rates could reduce an important form of credit enhancement for U.S. collateralized loan obligations, potential putting them at risk for downgrades in their credit ratings, according to Moody’s Investors Service.

Four Key Questions about Risk Retention Rules

– Regulators are finally ready to unveil a final risk retention rule, but whether the new regulation provides enough certainty to jump start the mortgage securitization market is an open question.

Lender Challenge Premise of CFPB's Student Loan Findings

– The student lending industry argues that the problems the CFPB is finding in the market are more related to federal loans than private ones and disagrees with the agency's push to allow student loans to be charged off in bankruptcy,

Student Loan Debtors Need a Light at the End of the Tunnel

– A New Jersey bankruptcy judge argues that Congress should amend the bankruptcy code to permit borrowers to discharge student loan debt if their net monthly income is insufficient.


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Catastrophe Bonds Taking on New Perils

Investors in catastrophe bonds are broadening their exposure by taking on multiple perils and increasing the time period during which claims can be included in coverage. Often they are doing so without any additional compensation.

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