ABS

Canada's largest bank last month said it plans to cut as much as 2% of its full-time equivalent staff in the coming quarter after a surge in expenses weighed on third-quarter results.

CLOs are turning to another type of debt — junk bonds — for the security packages that underpin the investment vehicles that are sold to insurers and pension funds.

Backed by revenue from point-of-sale unsecured consumer loans, the upsized deal also features expandable notes.

Tractors make up the vast majority of the vehicles in the pool, 92.5%, while trailers, trucks and buses account for 4.1%, 2.3% and 1.1%, respectively.

The SEC could crimp effective investor communications, while IOSCO seeks feedback on 12 proposed "good practices" when operating in the leveraged loan and CLO markets.

Rating agencies say the A, B, C and D notes have about 29.0%, 23.8%, 17.3% and 14.0% in credit enhancement, respectively, while A, B, and C notes enjoy a 15.9%, 10.6% and 4.0% in subordination.

Optimism may be building that the Fed is poised to steer the economy toward a soft landing, but Treasury market has delivered what is widely understood as a starkly different message: The economy is veering toward a contraction.

The notes benefit from a step-up event concerning class D. If an optional redemption does not occur in the expected redemption date, then the interest rate on the class D notes will increase by 3.0%.

The renewed interest in CLOs, which repackage leveraged loans into bonds of varying risk and size, comes after a very slow year for the market.

Virtually all of the attributes in VZMT 2023-5 and 2023-6 are identical, such as the statistical cutoff date (August 7), aggregate principal balance ($23 billion) and weighted average (WA) remaining installments, 26 months.

The distribution of dealers among the top categories have improved, while the floorplan loans have monthly payment rates that are at record highs.

Some buyers such as insurance companies tend to prefer longer duration to match their liabilities. That dynamic has also made asset based finance much more important

One potential credit drawback is that 25% of the pool finances construction equipment loans.

The trust will repay notes through a $160.7 million, floating-rate class benchmarked to the three-month Secured Overnight Financing Rate (SOFR), and a $25.1 million of fixed-rate, class B.

Among the winners: Hedge funds betting that bond yields will rise anew. It's clear that Jackson Hole's hawkish message has been received loud and clear.

After a challenging 2022, fund flows reverted to positive territory in 2023 even though higher interest rates and wider spreads have considerably reduced the supply of securitized product.

The fund gained about 4% in the first half of last year. Separately, LibreMax has raised $1 billion across two other funds, the LibreMax Core Fund and LibreMax Dislocation Fund.

Some $400.4 million in residential loans will secure the collateral pool, virtually all of which, 99.2%, were originated on 25-year terms.

Total credit enhancement on the notes amounts to 13.50% and 7.00% on the senior and subordinate classes of notes, respectively.

The current pool does contain personal loan renewals, and they remain in the pool as eligible collateral during a three-year revolving period.