Another Fine Mezz

Host Tom Lemmon retuned for this week's episode of Another Fine Mezz, while reporters Victoria Thiele and George Smith were well-recovered from their midweek escapades with some unnamed contacts. It seems European CLO investors are feeling pretty happy with themselves after a successful year where the asset class outperformed a number of competitors. It's outlook season and so George was in London to hear a range of forecasts before giving his own, which argued that 2024 should be strong for European securitization, regardless of recession risks. And finally, Tom explains why the chicken wing index is serious sauce.

With Tom Lemmon off giving thanks for a conveniently timed move to New York, Victoria Thiele and George Smith held the fort on this week’s episode of Another Fine Mezz. Over the week, George and Tom had done a deep dive into Nationwide’s ‘stock and drop’ tactic for speeding up RMBS distribution, briefly mentioned on the previous episode. George explains why it’s a great idea, but won’t spare the market a bigger conversation about regulation. Meanwhile, a commercial mortgage RMBS deal by Together illustrated the danger of over-categorising in the securitization market - at one point, it was mislabelled as a CMBS deal. The European CLO market has begun to wind down for the end of the year. While banks publish their forecasts for mediocre issuance volumes next year, market participants turn a hopeful eye to middle market CLOs.

On this week's episode of Another Fine Mezz, reporters George Smith and Victoria Thiele put up with a rather exhausted and jet lagged host, Tom Lemmon. Arini priced its long-awaited debut European CLO but as is becoming the norm for new entrants into the market, both in Europe and the US, the firm had to pay a slight premium. However, that in itself is not a bad thing, as Victoria also wrote on Thursday. Meanwhile, European securitization was beginning its descend into holiday hibernation with little primary market activity. However, Nationwide's fully retained Silverstone deal is an intriguing development. The UK high-street lender's idea is to issue a fully retained prime RMBS before selling it on over the following 12 months in what they've termed a "stock and drop".

This week's episode of Another Fine Mezz saw GlobalCapital's Tom Lemmon host from the comfort of his home in London for the final time, at least this year as he boards a plane to New York City. European ABS reporter George Smith was a little under the weather, but CLO reporter Victoria Thiele stepped up to take the limelight and explain how raising capital for captive CLO equity funds is getting trickier. Meanwhile, Tom discussed the significance of "hamming up" securitization in Afme's Capital Markets Union report, that new people and markets reporter Gaia Freydefont wrote about last week. With the EU elections coming up in June, it seems securitization advocates like Afme are making a big push to get reform on the legislative agenda before the new MEPs and commissioners take their seats.

It was back to normal for this week’s episode of Another Fine Mezz as Tom Lemmon welcomed back reporters Victoria Thiele and George Smith. With market activity drifting towards hibernation, that normally means it’s time for regulators to take centre stage. And so, the UK’s Prudential Regulation Authority (PRA) did, with its consultation paper on securitization and how it relates to the capital markets. The paper hints at the UK attempting to align more closely with the US. However, as a lawyer told GlobalCapital, the UK must tread carefully between Basel 3.1 standards and UK competitiveness. Meanwhile, in European CLOs there has been a late flurry of activity including a deal by Partners Group. Although, the credit curve appears to be steepening as triple-A investors are happy to play but mezz buyers seem ready for the holidays. And finally, only one member of the Another Fine Mezz trio made George’s daughter cry in the office this week. No prizes for guessing who that was.

In this week's episode of Another Fine Mezz, Tom Lemmon reported from Miami at IMN and FIIN's ABS East 2023 conference, while the usual suspects, Victoria Thiele and George Smith, were given a well-earned rest. Jennifer Thomas, vice president and portfolio manager at investment firm Loomis Sayles joined the podcast in between her hectic schedule as her team looked for opportunities amidst an uncertain macroeconomic backdrop. GlobalCapital's US bureau chief, Oliver West made his first appearance on the podcast, from his vantage point of the exhibit hall. And, US RMBS and CMBS reporter Kunyi Yang also made her debut, explaining why 2024 could see a real tug of war in the office CMBS sector. Brooke Major-Reid, chief capital officer at fintech consumer lender Affirm also dropped in, alongside KBRA's head of structured finance research, Brian Ford.

Tom Lemmon had his head in the clouds this week as he took off for Miami (if you’re at ABS East, get in touch for a meeting). So, it was up to Victoria Thiele and George Smith alone to discuss European securitization. Equity release mortgages have been securitized in mostly private transactions for a long time, but George has heard good reasons why they might be on the verge of progressing into a public market. While geopolitical tumult is shaking the market, Victoria discovered that uptier priming in European CLOs is about to lose its last sworn enemy among the triple-A investors. At the time of recording, the team was still thrilled about the prospect of George visiting London for the first time in three months. Unfortunately, storm Babet had other ideas and forced him to delay his trip by a week. The good news is: this gives keen market participants five more days to snap up a coffee drinking slot with him, so do reach out if you’re not meeting him already.

Over the past week, host Tom Lemmon has (almost) come to terms with being the wrong side of 30, and is ready to apply the wisdom of old age to European Securitization with reporters George Smith and Victoria Thiele. BPCE's prime French RMBS shocked bankers this week, but George Smith thinks it might be a sign that the market can finally move on from its summer struggles with the triple-As. Meanwhile, Victoria armed herself with a yellow marker and dug into the European Leveraged Finance Association’s new guide to CLO carbon reporting and found a number of green shoots. Finally, click this link to get access to GlobalCapital's 30-day free trial to get the full breakdown of everything discussed this week.

For this week’s episode of Another Fine Mezz, Tom Lemmon was joined by Ares Management’s co-head of alternative credit, Joel Holsinger to discuss the Private Credit Summit at ABS East 2023. Ares are one of a number of private credit firms set to descend on Miami in two weeks’ time. Holsinger, also a keynote speaker at the conference, explained why firms like his are taking an even greater interest in securitization and how the two sectors can work together to grow the market. He also found time to suggest his favourite restaurant, although booking ahead is strongly recommended. Meanwhile, Victoria Thiele and George Smith took great pleasure in discovering the Tom’s milestone age, which begins with the dreaded number three. George compared the European Investment Bank’s impact in significant risk transfer to nuclear physics, while Victoria went to yet another CLO conference but this time, arbitrage was not the only topic of conversation.

This week's episode of Another Fine Mezz was something of an international tour with a wrap of the annual TSI Congress in Berlin and a discussion about the upcoming ABS East conference in Miami. European ABS reporter George Smith was in Berlin last week and with the help of European CLO reporter (and German national) Victoria Thiele, discussed why this year's conference had a distinctly political tone. Meanwhile, Victoria talked through her scoop on Man GLG's return to CLO management and how CLO mezzanine investors are urging caution as arguments around documentation heats up. Finally, with IMN and FIIN's (the Fixed Income Investor Network) ABS East 2023 conference in Miami under three weeks away, Tom was joined by two guests to get the inside track. Adam Grainger, director of operations for FIIN and investor & issuer relations at IMN, and Joe Lau, chairman of FIIN and president and chief investment officer at LordCap discussed why Miami is the ultimate autumn venue.

With GlobalCapital's CLO reporter Victoria Thiele taking in the last of the summer holidays, remaining podcast presenters George Smith and Tom Lemmon were left considering taking the show in a new creative direction. Away from team politics, the European ABS market continues to fire. Curiously, it seems the mezzanine notes are getting considerably hotter than the seniors. We try to explain why. Adding to the momentum, the French and German finance ministers publicly called for securitization to feature more prominently in the European capital market ecosystem. Whether this leads to any action any time soon, remains unclear. Finally, Another Fine Mezz welcomed its first guest of the new series as Katie Prideaux, director of sustainable investment analytics product at LSEG Analytics spoke about the evolution of ESG as it becomes an ever larger consideration for market participants.

Bleary-eyed, European ABS reporter George Smith returned for this week's episode of Another Fine Mezz after the birth of his first child three weeks ago. However, there was no gentle easing in as the European securitization market kicked into gear with a flurry of issuance. In particular, prime UK RMBS continued its resurgence with Principality Building Society yet another UK issuer that was back in the fold. In CLOs, it's also getting hectic, although not quite to the same degree. However, Victoria Thiele discussed how while issuance might be picking up for now, terrible arbitrage is likely to mean that any windows are narrow. Finally, with the podcast trio unable to "milk" George's fatherhood any more, as one market participant said to Victoria, the team looked for new areas of discussion.

At one point last week, Another Fine Mezz host Tom Lemmon worried he might be recording a podcast all alone as his colleagues got their last bits of summer holidays (and paternity leave) completed. However, CLO reporter Victoria Thiele was on hand to save the day. It was a timely intervention as the European ABS market reopened with 8 deals entering the pipeline last week. Santander kicked things off, pricing its second of the year from the prime UK RMBS shelf, Holmes Master Issuer 2023-2. But stealing the limelight was ING's Green Lion, a green-labeled prime Dutch RMBS. A welcome step for ESG-securitizations, but whether there are signs of a meaningful market beginning to grow is unclear. And finally in CLOs, Onex's head of credit Ronnie Jaber sat down with GlobalCapital to discuss his expectations for the rest of 2023.

Another Fine Mezz remains only two thirds full as European ABS reporter George Smith enjoys fatherhood and sleep deprivation. Thankfully, securitization deputy editor Tom Lemmon was kept company by European CLO reporter Victoria Thiele. European Significant risk transfer (SRT) is set for another record year in 2023 after various regulatory disasters were averted. Meanwhile in the US, there is hope that banks will soon come to a compromise with regulators. Onex priced its first European CLO of the year, and was the first in the region to split the single 'B' tranche. However, the slightly strange ratings revealed a mystery investor on the senior notes.

For this week's episode of Another Fine Mezz, securitization deputy editor Tom Lemmon is kept company by European CLO reporter Victoria Thiele as European ABS reporter George Smith is off to become a Dad. In the US, specialist CLO equity funds believe they're "winning the argument" as limited partners (LPs) who invest in the manager-retained equity (known as captive funds) become frustrated at squeezed returns. In European CLOs, triple-A investors are also frustrated. They're looking to limit the power of CLO managers that are happy to be dragged along into amend and extend deals, by beefing up the legal documents before investing in a CLO. And finally, the Financial Conduct Authority's (FCA) 707 page document outlining its plans for the UK's post-Brexit securitization regulation is still being digested. The question is how the UK securitization market will look once its implemented.

For this week's episode of Another Fine Mezz, securitization deputy editor Tom Lemmon returned from his holidays (and golfing misery) to host, while all in the GlobalCapital stable are hoping this episode will be ABS reporter George Smith's last before he takes a breather to become a father. Patrick Drahi, founder of telecom and media giant Altice tried to calm the nerves among CLO managers (and other obligors) last week, as the crisis around the company's debt and corruption allegations continues. With European CLOs exposed to around €4bn of Altice's debt, our reporters discuss the pervading sense of concern over said debt pile — and the wider impact it could have on the European CLO market. The European securitization market has shrunk dramatically relative to the US since the global financial crisis in 2008. As the most battle-worn market participants are gradually out of the market to pastures new, there are concerns that their wisdom is being lost — and not being replaced. We ask whether this leaves the industry short on crisis experience. Finally, the latest hot topic in debt markets has turned our structured credit team onto ontological investigation: what, exactly, is the difference between a private credit CLO or middle market CLO? It's not clear, and that's a problem for the market and investors.

Regular podcast host Tom Lemmon was away for another week, but Victoria Thiele and George Smith held the fort and put together a brand-new episode of Another Fine Mezz. The UK government is handing the power to make securitization rules over to the FCA and PRA. Market participants are pleased by the prospect of speedier processes and speculate about life after EU regulation. Apollo plots the first European CLO reset in a year. A dozen other issuers that priced at spreads above 200bp in the terrible market last year could follow. Last but not least, an odd detail of business credit card securitization reminded George of Victoria’s story about middle market CLOs two weeks ago.

One week into the new and improved second life of Another Fine Mezz, host Tom Lemmon is taking a well-deserved holiday. Markets never stop, of course, and so Victoria Thiele and George Smith sat down to discuss the biggest stories in European Securitization, as well as some interesting bits and pieces that were not featured in GlobalCapital articles this week. Bankers and investors expect more European SRT deals by US banks, who were held back by regulatory uncertainty in the past. Appetite for US collateral straight from the market leaders is there – if the price is right. It looks like an Asian investor took the entire AAA tranche of Investcorp’s Harvest CLO. Some market participants now dream of tighter AAA spreads if Japanese investors return, others dread their demands for bondholder-friendly deal documentation. Last but not least, securitization specialists stepped in to help George find an appropriate name for his soon-to-be-launched 18 year project of raising Europe’s best financial journalist.

After a long hiatus, GlobalCapital's dedicated securitization podcast, Another Fine Mezz makes its return. The podcast also underwent a mini makeover, with two more reporters joining Tom Lemmon to discuss the biggest stories of the week in European securitization. Middle-market CLOs in Europe are struggling to get off the ground with the companies behind the loans often too small to meet the criteria for the big three rating agencies, Moody's, S&P and Fitch. However, UK private lender ThinCats is still hoping to press ahead with a transaction soon. Meanwhile, social-labelled RMBS deals are already exceedingly rare, and creating a market for them in the UK needs to consider the systemic issues the mortgage market faces before being able to truly consider an RMBS as social. Finally, a visit to Edinburgh leads to the first Another Fine Mezz scoop.