Investments

In the U.S., the 12-month trailing default rate fell to 3.4% in June from 4% in March, while in Europe it declined to 2.2% from 2.8% over the quarter. Globally, defaults stood at 2.9%, down from 3.4% in the first quarter.

A Fannie Mae test to handle the private mortgage insurance process for lenders may raise concerns that it's going outside the scope of its secondary market mission. But the effort reflects its mandate to explore new credit-risk transfer alternatives, a company executive said.

The lack of concrete lobbying victories had become an issue with some members in the group, possibly leading to a splintering of support among members and the board for continuing the executive director's tenure.

Most managers are looking to add three to five years of investable life through CLO resets and refis, but Apollo is sticking with a four-year reinvestment window in a refinancing of its 2016 ALM XVII portfolio.

Annisa CLO was originally issued in August 2016, just before risk retention regulation took effect, but was the firm's first deal to be dually compliant with both U.S. rules (which no longer apply to CLOs) and European rules.

GoldenTree Loan Opportunties XII was one of nine CLOs that were reset or refinanced on Friday alone, as managers rushed to lower payment prior to July quarterly payments to investors; the tally for June as a whole is $30.9 billion.

The deal, which is expected to close this summer, would bring THL Credit’s assets in collateralized loan obligations under management to approximately $12 billion and its total assets under management to over $15.5 billion.

HPS Loan Management 9-2016 will be backed by a $750 million portfolio of broadly syndicated loans and other assets, up from $500 million originally; Moody's is only rating the two senior tranches of notes to be issued.

That level is wide of the six new-issue CLOs that priced last week at triple-A spreads of 110 basis spoints; CLO senior notes have widened 10 basis points, on average, over the past three months.

The $470 million transaction has some features rarely seen now that the market for bridge loan securitization has been rehabilitated, including a "blind ramp" and a "blind reinvestment" period.

It's another example of what appears to be tailoring tranches to meet the tenor and yield requirements of specific investors; the deal, GMS Euro CLO 2014-1, was also upsized to €508 million from €368.3 million originally.

The original $312 million triple-A notes are being replaced with six separately priced Class A note tranches, including two fixed-rate securities classes

New securitizations backed by reverse mortgages are now at a low not seen in two years, signaling that higher volumes seen in recent months may be tapering off.

CLO securities pay out interest pegged to the three-month London interbank offered rate, but loans used as collateral are increasingly switching to one-month Libor and the spread between the two benchmarks has widened significantly.

The $278.3 million RCMF 2018-FL2 also has unusually heavy exposure to apartment buildings, offices and industrial properties that are either vacant or have low occupancy levels, according to Kroll Bond Rating Agency.

The $71.7 billion-asset manager is replacing notes from a 2015-vintage CLO that had been squeezed on asset quality prior to its October 2017 post-reinvestment period.

The Dallas-based money manager has launched a UCITS that invests in both U.S. and European loans, investment-grade CLO securities, and obligations and other kinds of structured products.

The $52 billion in year-to-date volume in resets of collateralized loan obligations is nearly outpacing new-paper issuance of $53.5 billion, reports LPC.

The new notes are not being distributed proportionally across the capital stack, however; instead the refinancing will result in slightly higher subordination for the senior, triple-A-rated Class A notes.