Over the last 12 months the apparently unstoppable momentum of the global securitisation industry has suffered a major jolt. The immediate cause lay in the sub-prime segment of the US home equity market, but the ripples have spread out to affect other jurisdictions and market sectors. The US sub-prime housing meltdown certainly caused uproar in both the securitisation and equity markets, as sub-prime lenders succumbed to margin calls and saw lines of credit evaporate. As a result issuance has fallen, and monoline wrapping has made a return –...Read more
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The US sub-prime housing meltdown has caused uproar in the securitisation and equity markets, as sub-prime lenders have succumbed to margin calls and lines of credit evaporate. Issuance has fallen and monoline wrapping has made a return – a change from the previously ubiquitous senior subordinate structure. John D'Antona reports.
Initial fears of contagion from the US sub-prime turmoil affecting the UK non-conforming sector proved unfounded. But while some players view both markets are structurally different, others believe it is only a matter of time before the UK gets hit, like the US. Jean-Marc Poilpre reports.
A new tax regime for UK companies involved in securitisations was introduced by Parliament last December. The permanent regime, which replaces the temporary regime created by Finance Act 2005, facilitates the setting up of UK-based SPVs, and is likely to be used for UK securitisations. William Thornhill reports.
The UK credit card ABS sector has been battered in recent times by a multitude of problems, and as a result, ABS issuance has dropped from highs of around £8bn in 2005 to virtually nothing in 2007 to date. However, the majority of market participants are confident that from the second half of 2007 things will improve. Anna Borrett reports.
As the US sub-prime industry imploded this year at least one other industry saw some benefits. Under pressure from spread tightening and new entrants, the financial guarantors have seen sub-prime lenders beating a path to their door. But the monolines' problems will need more than a little spread widening to be resolved. Paul Farrow reports.
The US CDO market, long a natural buyer of subordinate ABS securities, has been forced to shift gears as the US sub-prime housing market collapse has eroded the arbitrage between cost of collateral and selling a deal. Investors, still laden with capital, have shifted strategies and have purchased CRE deals and cashflow-backed offerings, but a return to short-term stability in the ABS markets may rekindle mezzanine ABS issuance. John D’Antona reports.
It may be predictable and even bland, but the Australian securitisation market is generating issuance volumes unmatched by any other country in the Asia-Pacific (ex-Japan) region. Moreover, nothing looks likely to stop this supply dominance in the near future, especially given the continued overwhelming investor interest. Shankar Ramakrishnan reports.
A new bill to allow the listing and trading of securitised debt instruments should help to stimulate India's securitisation market. However, regulators will also need to ease some restrictive regulations and expand the investor base if they want this market to be a viable funding source for the country’s huge infrastructure funding needs. Shankar Ramakrishnan reports.