Asset Securitization Report - April 2020

Containment

ABS participants saw markets freeze and were bracing for worse when federal aid provide a short-term respite. The question now: How much trust can anyone put in the medium-term and beyond?

One in five CLO tranches lacks Libor floors, setting the stage for conflict with investors as rates hurdle downward

Sens. Sherrod Brown and Elizabeth Warren have asked the CFPB to explain how it determines abusive practices in auto lending

At a panel during day two of the Structured Finance Association’s ABS trade show in Las Vegas, guest speakers said a strong consensus is building toward asking lawmakers in upstate New York to enact mandatory “fallback” language for Libor replacement in financial contracts.

ABS investors who have previously needed only to know an asset was excluded from verboten classes like tobacco, oil and gas or firearms are now pressing for details on how well an investment stacks up in the social and governance factors.

First-day panelists at the Structured Finance Association's annual ABS industry conference in Las Vegas speculate on securitization's potential as a new financing mechanism for oil and gas operators.

The collapse of dine-in revenues for restaurant chains during the outbreak is placing whole biz deals under the ratings microscope.

Fannie Mae and Freddie Mac coming out of conservatorship and transitioning into public utilities would be the ideal for small mortgage lenders, according to trade-organization representative Robert Zimmer.

A potential wave of loan delinquencies because of the coronavirus stands to hurt private mortgage insurer earnings, but the companies will still have sufficient capital, a Keefe, Bruyette & Woods report said.

Add continued growth in commercial and multifamily mortgage debt outstanding to the list of things that the economic fallout from the coronavirus might affect.

Fannie Mae raised its origination forecast by $300 billion following Fed rate cut actions in response to coronavirus impact