Regulatory relief remains uncertain, but there's plenty to celebrate as some more estoteric asset classes, such as franchise fees and aircraft leases, move into the mainstream, while others, such as nonprime RMBS, are starting to revive
The $8B opportunity in private student loans
Changes under consideration in federal student lending policy, including a cap on lending to grad students and means testing for loans to parents, could create huge opportunities for private student lenders.
Pickup in aircraft lease ABS issuance creates 'virtuous circle'
The growth in securitization in the esoteric asset class has drawn in more investors seeking long-duration high yield; that, in turn, is spawning more deals from new issuers filling the demand.
PennyMac plans 'programmatic' MSR securitizaiton
Vandy Fartaj, the firm’s chief capital markets officer, says a novel deal structure allows the real estate investment trust to issue additional term notes its portfolio of mortgage servicing rights grows.
Scarcity of CLO equity
Matt Natcharian, a managing director and head of the structured credit CLO investment team at Barings, said that risk retention, which requires managers to hold on to economic risk in their deals, has “changed how equity is raised, and it’s brought in a stabilization of equity demand.”
PACE lenders welcome increasing oversight
Cisco DeVries, the chief executive of Renew Financial, said the bills will bring much-needed stability to Property Assessed Clean Energy, which uses a property assessment to finance upgrades.
Appetite for whole biz ABS is growing
The bankers and lawyers who put these deals together have been working hard to broaden their appeal beyond insurance companies, the traditional buyers.
DId CLO managers err in lobbying for an exemption to risk retention?
MJX CEO Hans Christensen thinks the $500 billion market lacks the heft to influence lawmakers or regulators; he says any relief from rules requiring "skin in the game" of deals will have to benefit other asset classes as well
'Just scratching the surface' in nonprime RMBS
Bank statement loans? No problem. Weak reps and warrenties? Doesn't seem to matter to investors in nonprime mortgage bonds. The only limitations, according to sponsors of these deals, are consumer awareness of the product and loan officers' willingness to offer them.
Banks reported decent loan growth in the spring and early summer as businesses rushed to draw down credit lines and tap the Paycheck Protection Program. But demand has been muted since, and bankers can only guess when it will pick back up.
Fannie Mae and Freddie Mac have been slammed for planning an additional refinancing charge to cover COVID-related losses, but the head of the Federal Housing Finance Agency defended the policy in House testimony.