Investments

About $474M in bonds backed by aircraft leases managed by GE Capital Aviation Services (GECAS) has been downgraded, tied to the increasingly poor financial health of several foreign airlines from the COVID-19 shutdown in global air traffic.

Of 900 deals reporting data over the last month, 21% have narrowed or eliminated payments to the equity. Some analysts expect about one in three deals will eventually limit payments to their riskiest securities.

Apollo Global Management Inc. faces the prospect of having to hand back earlier profits from several of its funds as its holdings were hit hard by the economic fallout from the coronavirus pandemic.

While Freddie Mac stabilized liquidity in mortgage markets, coronavirus-related credit losses drove the GSE's income down in the first quarter of 2020.

They and other firms are seeking to replicate the windfalls many enjoyed in the aftermath of the financial crisis when, by taking advantage of low-cost loans via the Term Asset-Backed Securities Loan Facility, they were able to notch double-digit returns purchasing top-rated ABS as the economy recovered

Hertz and Avis will likely each have to seek to relief from lenders – including asset-backed securities investors that make up the bulk of funding for both companies’ fleets, Moody’s stated in research reports.

The U.S. leveraged loan market is springing back to life with new deals for T-Mobile US Inc. and Delta Air Lines on deck for investors willing to take on risk.

Rising default levels have produced strain on many collateralized loan obligations, many of which are now approaching breaches of covenant tests on minimum weighted-average ratings factors and maximum holdings of triple-C rated loan assets.

The Distressed Credit Opportunities Fund III money pool, dubbed Disco III, will target leveraged loans, high-yield bonds and collateralized loan obligations.

According to a new academic research report, CLO managers have taken advantage of S&P's ratings methodology for a ratings boost on lower-rated tranches - enabling them to offer more return for what seemed like less risk.

Moody’s Investors Service has placed hundreds of non-senior U.S. CLO tranches under review for downgrade, affecting 358 broadly syndicated loan-backed portfolios as Moody’s measures the ongoing economic shocks of the coronavirus outbreak.

Declines in mortgage servicing rights valuations at JPMorgan Chase and Wells Fargo point to the resurgence of a dilemma that came up during the last downturn.

Analysts and ratings companies are sounding alarms as a number of BDCs rush to shore up finances, or throw lifelines to their heavily indebted borrowers.

Oaktree Capital Management LLC was a “strong buyer” of corporate debt last month during the selloff brought on by the coronavirus pandemic, according to Howard Marks, co-founder of the distressed-investment specialist.

Bank research reports note the loans will only apply to purchases of CLO notes backed by newly issued leveraged loans. Most recently launched deals involve warehoused or distressed secondary-market loans ineligible for TALF.

Ginnie Mae will begin taking requests for assistance from issuers who, having exhausted all other options, are having trouble advancing borrowers' principal-and-interest payments to investors amid the pandemic.

The Fed's actions are designed to ensure the flow of credit to midsize businesses and state and local governments hit hard by the economic impact of the coronavirus pandemic.

Fitch expects a majority of European CLO junior notes to be placed on a potential downgrade watch due to enhanced evaluation for coronavirus-related stresses.

In the last two quarters of 2019, according to Fitch Ratings, more U.S. managers of collateralized loan obligations (CLOs) had been structuring some of their transactions to comply with risk-retention rules.

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?