John Hintze

Morgan Stanley is starting afresh, with a $765.3 million CMBS deal issued through its MSC 2021 trust that comprises 43 loans secured by 60 properties and originated in April 2021 or later, as the vaccination rate gained momentum and Covid infection rate declined.

Approaching the market with its third and largest deal this year, non-QM originator and issuer Angel Oak Home Loans LLC (AOHL) plans to issue $303 million in asset-backed securities following the recent completion of its initial public offering.

Managers expect to be holding portfolios of loans priced to potentially different benchmarks, which could present a major challenge in trading assets and re-calculating note coupons currently tied to the outgoing reference rate.

Worried initially that marketplace lenders might falter at the first stage of a crisis, the sector has weathered the COVID-19 storm and now projects to match 2019's record securitization deal volume.

Last month, prominent investor Steve Eisman pegged Credit Acceptance Corp. as his new big short, based on a belief the subprime auto lender and its industry may come under closer CFPB scrutiny under the new administration. Analysts are taking note, as well.

Although returns may be lower than in recent years, CLO securities (particularly the senior-rated tranches) remain very attractive compared to alternative investments.

The likely extension of support of Libor until June 30, 2023 is a major plus for the securitization market, fending off potential market disruption the buying and trading of $1.8 trillion in outstanding asset-backed securities because of the planned cessation of the benchmark rate by the end of 2021.

CLO manager Brigade Capital Management has refinanced several tranches of notes to improve the spreads and boost the tranches' ratings.

Coronavirus-related disruptions at retail and hotel properties are fueling a surge in conduit CMBS delinquencies, according to Moody's Investors Service.

Owl Rock Technology Advisors, the same team supporting other Owl Rock CLOs, has launched an inaugural middle market CLO that is continuing the CLO manager's tradition of spreading underwriting responsibilities among a variety of banks.

The Mills outlet property in Elizabeth, N.J., has been hit hard by tenant bankruptcies but kept its AAA with Fitch thanks to its proximity to New York and underlying debt-related metrics.

The California fintech plans to issue $80.7 billion in securities backed by consumer installment loans made in conjunction with banks.

Volkswagen has launched a $750 million auto-lease securitization that provides investors with more favorable terms than those it offered in more recent transactions.

Genesis Financial Solutions is pursuing a $135.9 million securitization of credit card receivables, including riskier point-of-sale credits that should provide investors with attractive spreads.

Stimulus and regulatory actions are the main ways in which government policy in the wake of the elections will impact structured finance, according to Fitch Ratings. The degree to which they are affected will depend heavily on Georgia runoff elections Jan. 5.

Three major commercial mortgage lenders have teamed up again this year to securitize $871 million in properties in a CMBS deal that provides investors with a highly concentrated loan pool and higher leverage.

The franchisor and operator of restaurants under the Carl’s Jr. and Hardee’s brands, CKE Holdings priced a $400 million transaction below pricing guidance that slightly increases the private-equity-held company’s leverage.

Educational Credit Management Corp. is issuing its third securitization since the start of the pandemic that is collateralized entirely by Federal Family Education Loan Program rehabilitated loans but still carries a negative outlook from Fitch Ratings.

The ratings agency reports that asset-backed securities backed by small-ticket equipment leases and loans is subject to greater volatility from small-business payment deferrals.

Lenders’ loan modifications have temporarily reduced the delinquency rate of loans in CMBS deals for the second month in a row, according to Moody’s Investors Service, but the temporary nature remains cause for concern.