Securitization

CarMax, BMW, Santander and Credit Acceptance Corp. all launched deals Thursday; they add to the $35 billion in prime auto, $12.31 billion in prime lease, and $19.4 billion in subprime auto loan ABS so far this year.

Moody's notes that the practice masks the actual performance of the equipment lessor's recent securitizations; the rating agency has increased its expectation for cumulative net losses on the latest deal by 25 basis points, to 2.75%.

The allure of promised savings persuaded most Chicago City Council members.

Over 80% of the cars are diesel-engine vehicles, bringing potential volatility to the portfolio cash flows given the public debate over potential panning such cars in several European urban centers.

The deal does not even merit a BBB-plus, according to Fitch, which cites insufficient credit enhancement, exposure to high-risk obligors, and the servicer's lack of experience.

A wave of corporate loan refinancings is putting collateralized loan obligations afoul of a covenant designed to safeguard their own investors.

At $307.5 million, the deal is more than twice the size the sponsor's initial transaction completed in February; it includes a prefunding account, which could introduce drift in the credit quality of the collateral.

The investment arm of Microsoft founder Paul Allen has also committed $100 million of funding to help CleanFund warehouse additional PACE assets that will eventually be securitized.

HPS Investment Partners is adding a new name to one of its legacy Highbridge CLOs, as well as piling on extensive changes to note structure, deal terms and restrictions on some higher-risk assets.

The private equity firm obtained $582.5 million in financing from Goldman Sachs and J.P. Morgan; proceeds were used to refinance $510 million of debt and return $52.2 million of equity to the sponsor.

Investors don't appear to be overly concerned about recent management changes at the student loan refinance lender.

CFPB Director Richard Cordray is using the Equifax breach to suggest the CFPB be given power to examine credit reporting agencies for potential cybersecurity lapses.

Just $7.6 billion of deals were refinanced or reset in September, bringing the total for the third quarter to $27.2 billion, far short of the pace of the first half, when approximately $138 billion was reworked.

A report released Friday calls risk retention "an imprecise mechanism" for encouraging the alignment of interest between sponsors and investors. It recommends creating loan-specific requirements under which managers would receive relief.

Belmont Green Finance, which began originating loans in late 2016, has gathered up its first round of originations through 3Q2017 in a transaction that will issue up to £230.6 million in notes.

The Treasury Department is expanding its calls for overhauling regulation of the financial services sector, this time focusing on changes to the most significant rules surrounding securitization and derivatives.

The proportion of collateral that will be acquired after the CPS Auto Receivables Trust 2017-D closes is 33.3%, or $66 million, from the 29.7% level from the sponsor's prior deal in July.

Select Portfolio Servicing grew its mortgage servicing rights portfolio by over 14% in the second quarter by targeting opportunities in the nonagency loan market.

The biggest opportunity would likely come from limits to PLUS loans for parents and graduate students, something that is beyond the scope of regulators and would require congressional action.

Fitch is comfortable that payment plans with terms of over 24 months are not being used for lower-credit obligors, as they are for some other kinds of consumer loans.