The bank will issue 1 billion ($1.05 billion) of bonds backed by euro denominated loans issued to French borrowers.
Much of the securitization universefrom auto loan deals to commercial-mortgage backedsuses whats known as the swaps curve to price floating-rate deals. Before 2000, Treasurys were the go-to benchmark. Pricing movements are causing some to ask whether the market should go back.
The transaction, Bavarian Sky German Auto Leases 4, will offer a 746 million tranche with a preliminary 'AAA' rating from Standard & Poor's and an unrated 54.4 million class B tranche.
Nearly 17% of the leases in the collateral pool backing Swiss Car ABS 2015-1 AG. are affected by the emissions allegations. In addition the portfolio will also include vehicles that are affected by recent CO2 allegations.
Gemgarto 2015-2 is collateralized entirely by loans with rates that are fixed at a weighted average interest rate of 3.75% for the first three years of their terms and then reset to an adjustable rate.
A nascent private bond market in France is expected to grow significantly over the next two years, and could complement, or possibly compete with, securitization of loans to small and medium-sized enterprises.
A policy fight is threatening the recovery of collateralized loan obligations in Europe.
European collateralized loan obligations issued pre-financial crisis are nearing the end of their reinvestment periods, yet the maturities of the loans that serve as collateral continue to shift further out into the future.
The latest generation of European CLOs may expose investors to a risk that didnt exist in most collateralized loan obligations issued before the financial crisis: fluctuations in foreign exchange rates.
With Global ABS around the corner, its only fitting that we turn our attention to Europe.
Firm: Broadmoor Consulting LLC
In the news: Marketplace Lenders Are a Systemic Risk
As concerns mount about the riskier loans being packaged into commercial mortgage backeds, several banks have come up with a new strategy for making deals more attractive to investors. They are boosting exposure to both high quality and highly leveraged mortgages.Current Issue