Glen Fest

Since Nov. 21, investors have withdrawn a net $14.88B from the loan fund market amid concerns the Fed will limit rate hikes in 2019; the exodus makes loans even more of a buyer's market for CLOs.

Steven Kolyer, a 27-year veteran of law firm Clifford Chance, was recruited to build out the burgeoning practice advising lenders and arrangers in bridge-loan CRE financing.

This year saw elation over the rollback of risk retention for CLOs give way to concerns about leveraged lending, the 1st post-crisis downgrade of a subprime auto deal, the 1st AAA for commercial PACE, and much, much more.

Reduced bank lines and a major shipping firm consolidations in 2018 could lead to strengthened firms shifting to alternative capital in the debt markets next year.

They differ slightly from those released earlier by the Fed-convened ARRC, including language making it easier to ditch a SOFR-derived benchmark in favor of a new benchmark that has yet to be developed.

A Wells Fargo report this week shows that market spreads for the triple-A notes backed by collateralized loan obligation assets are at 128, a level not seen since May 2017.

The $500 million AIG CLO 2018-1, AIG's first deal since selling off its asset management business in 2010, is priced at 132 basis points over three-month Libor.

The €350 million Providus CLO II is backed exclusively by loans to mid-market firms that meet the private equity firm's sustainability criteria; at closing, 90% of the collateral has been identified.

The LA-based manager is pricing the replacement AAA notes of Oaktree EIF III Series 1 inside recent market averages through a limited, brief noncall extension.

That's unprecedented; previous series from Ford Motor Credit's master trust financing dealer inventories limited non-amortizing schedules to three to seven years.

The $320.1 million Homeward Opportunities Fund 1 Trust 2018-2 features fewer loans that rely on alternative ways to document borrower income, but borrowers have higher debt-to-income ratios and lower FICOs.

Stricter energy regulations for European residential and commercial buildings, effective in 2020, will likely depress cash flow and property values, though the impact will vary by country, according to Moody's Investors Service.

The $308 million Deepath CLO 2018-1 has an unusually large allowance for riskier triple-C loans of up to 17.5% of the portfolio.

The transaction has a senior-note tranche with a double-A rating from DBRs, and is being arranged by Banco Santander.

The $153.7 million Peaks CLO 3 also features a high ceiling for triple-C-rated loans and for "current-pay" loans that meet one or more criteria for default.

The bonds will be collateralized by payments from 15 royalty streams on 14 patent-protected drugs and technologies and will rank pari passu with securities issued from the same master trust in 2017.

A $55 million whole loan for the Dream Inn hotel in Santa Cruz, Calif., is the largest of 44 loans backing the $891.8 million transaction, called BBCMS Mortgage Trust 2018-C2.

Both managers are pricing their 3rd CLOs of 2018; the 135 basis point spread on Zais' is among the widest this year for a deal backed by broadly syndicated loans.

The transaction, Quarzo S.r.l. – Series 2018, is backed by 104,640 accounts with an average outstanding balance of €8,600 and an average interest rate of 9.1%. The loans have original average terms of 61.9 months, with 4.8 months of seasoning.

JPMorgan is securitizing a $180 million, two-year commercial mortgage backed by a leasehold interest on the 24-story building in a single-asset transaction.