Asset Securitization Report - October 2019

Private-label securitizations haven’t commanded a meaningful share of the mortgage-backed market in a decade. Trump administration officials seem intent on changing that

The original $436.5 million whole-business securitization deal that closed in May 2018 has already been downgraded twice, due in large part to dueling lawsuits between ousted founder Harvey Franco and Australia-based Macquarie over the past year.

Deutsche Bank analysts said the newly downgraded junk status for Ford and its captive-finance subsidiary could mean more dependence on securitization to offset expected higher bank financing costs.

Ratings agencies have argued recently that the population of loans whose ratings fall below the lowest single-B rating – the lowest rung above the highly speculative triple-C ratings layers – will grow significantly in an economic downturn.

CBAM Partners announced the hiring away from AXA Investment Managers an executive with significant experience in the CLO and European debt markets to assist in the launch of its European credit strategies business.

Investors and issuers understand Libor’s end is a near certainty. But many remain unprepared to replace the benchmark

“We won’t, unless you get a policy mistake or you get a massive market accident,” he said at the annual ABS East confab in Miami.

An opening day panel for ABS East focused on the growing number of choices investors have in asset classes and structural options.

PACE financing, which peaked at $1.7 billion in 2016, was less than half that in 2018, and only two publicly rated deals totaling have priced this year.

Gaw Capital Partners and DJM Capital partners are sponsoring $211.3 million large-loan securitization that will include as collateral the famed Hollywood Walk of Fame.

With the qualified mortgage patch expiring and a recession likely, wealth inequities that have hurt black and millennial homeownership could worsen, according to the National Association of Real Estate Brokers.