Another Fine Mezz

This week on Another Fine Mezz, host Tom Lemmon welcomed Alantra's SRT specialist, senior advisor, Jeremy Hermant as the third guest in the SRT Series. Hermant discussed the increasing role of arranging banks in SRT transactions as the market increasingly opens itself up to smaller banks who need to efficiently manage their capital requirements. In addition, Hermant spoke about the regulatory changes in the UK making SRT more competitive, and explained why regulators are encouraging SRT as the capital management tool of choice. He also spoke about his own, varied career, having begun as an equity derivatives trader before moving into the precursor to SRT, then known as private debt mobilisation. All this occurred while Hermant was at Santander, learning and developing under the watchful of eye of Steve Gandy, the former Santander stalwart of securitization and 2024 winner of GlobalCapital's Lifetime Achievement Award for European Securitization.Hermant also discussed how the industry has changed for the better, with offices reflecting society more broadly now, as opposed to looking (and smelling) like a men's locker-room. Finally, Alantra's senior advisor explained why particularly in European securitization, building positive relationships based on kindness is key to success.

There was only one place to start this week's episode of Another Fine Mezz after Enpal's stunning debut solar ABS, the first of its kind in Europe.European ABS reporter, George Smith, explained why the deal from Germany's largest renewable energy provider had such strong demand, although both he and host, Tom Lemmon questioned whether the deal would see a host of others following in the its footsteps. Golden Ray 1 has clearly shown that things like solar ABS can be sold in the European securitization market, but it has also revealed just how difficult it can be to reach the required scale. Away from Enpal, there is the small matter of the US presidential election. Recording took place before Donald Trump's historic victory but with the dust still settling, signs of life in the pipeline are not yet apparent.

This week on Another Fine Mezz, host Tom Lemmon sat down with Man Group's, co-head of credit risk sharing, Matthew Moniot for the second episode of GlobalCapital's SRT Series. Moniot explained how the world of risk sharing has changed since he first started dealing with "SRT-like" products in the late 90's. And now, senior leaders within banks have recognised that it's not just a regulation-driven product, but a key part of their toolkit when looking at efficiency. In the last 12 months, the market has become more competitive and more transactional, Moniot said. But that isn't necessarily good for the long-term health of the market. In the second half of the episode, Moniot looked back on his career in finance, why he enjoys being on the buy-side, and why he calls himself "the last fiduciary in the world". Finally, Moniot reflected on his relatively new role at Man Group, and life in London.

On this week's episode of Another Fine Mezz, host Tom Lemmon and European ABS reporter, George Smith geared up for yet another busy week in ABS with the market's late-September slump looking well and truly over. As the US presidential election on November 5 draws ever closer, it seems more and more market participants are not terribly fussed about it, despite worrying about it for most of the year. That's particularly true for the sterling market with NewDay, LendInvest, Arval and Yorkshire Building Society all offering up paper this week and beyond. Meanwhile, last week Mercedes and Santander priced euro deals, while Oodle and Nationwide got away in the UK. Not to be outdone by the EU, the UK's Prudential Regulation Authority (PRA) announced some proposals on securitization, including a new formula for the p-factor, which should make ensure that using securitization to improve banks' capital treatment remains economical. The PRA is also looking at growing the credit rating agency (CRA) market and has included some smaller agencies like KBRA, Arc Ratings and CreditReform on its list of approved CRAs.

After teasing it for weeks, the new SRT Series of Another Fine Mezz is here. European ABS reporter, George Smith sat down with Frank Benhamou, risk transfer portfolio manager Cheyne Capital to kick the series off. Prior to Cheyne Capital, Benhamou spent over 17 years at Barclays, where he was one of the key architects of the bank's SRT platform, making him the perfect person to begin the series. In this episode, Benhamou explains why SRT is proving so popular, growing at around 20%-30% year on year for the last few years, and why it is set to only continue, particularly as US banks start building their platforms. He went on to discuss Cheyne's re-emergence in the market since he joined in April, and the challenges with building a high-quality SRT portfolio. Finally, as ever with special guests, Benhamou looked back on his career in securitization, how he came to love the industry, and why it is perfect for the "all-rounder".

The great regulatory war over European securitization could soon be coming to an end following the European Commission's launch of its consultation last week. Naturally, the Another Fine Mezz team were very excited to summarise the reaction so far, not least for host, Tom Lemmon. European ABS reporter, George Smith was also on hand to discuss what could happen, with many market bigwigs hopeful that this could be the beginning of the end of securitization's regulatory purgatory. At first look, everything is on the table. And with 167 questions to answer, that should be ample time to discuss whatever it is respondents want to change. There are also some hints that high-quality securitizations could be treated more favourably under the liquidity coverage ratio. However, the CLO market may find itself under greater scrutiny over whether it should be treated as a private transaction. Back in the market, issuance has slowed to a steadier pace but the sterling market looks to be heating up, while there are also deals from Santander Germany and Mercedes.And finally, some trivia reveals that the Another Fine Mezz team should stop asking for whom the bell tolls.

This week on Another Fine Mezz, host Tom Lemmon sat down with KBRA's head of European research, Gordon Kerr as part of a sponsored episode looking ahead to KBRA's structured finance symposium. Kerr spoke about the brilliant, record-breaking year for the European securitization market and the hope that this could be just the start with optimism building that transformative reforms for the sector are on the way.He also gave a sneak peak of what to expect at KBRA European Structured Finance Symposium, which takes place on October 17 in London. There's plenty to look forward to with speakers from the likes of Barclays, Bank of America, Citi, Blackstone and 400 Capital. Finally, Kerr reflected on his career that began in the late 1990's, and in particular, how he manages to look so cool even when the heat is on.

With the summer holidays of the Another Fine Mezz team well and truly over, it was back to normal this week. Similarly, the European securitization market has eased into October with deal flow slowing to a much more manageable pace. WiZink bank completed a successful return to the market after a troubling debut in 2023 for its Portuguese credit card ABS. However, host Tom Lemmon argued that despite a much smoother ride this time around, the trade revealed familiar problems in European ABS. Despite a record year of issuance, the investor base is still far too small and doing the credit work takes far too long. Meanwhile in the UK, Tandem Bank's debut RMBS caught the attention of European ABS reporter, George Smith. It was a roaring success but the question is whether it's a further sign that UK challenger banks will start using the securitization market to help with capital management with trades not dissimilar to the large banks' significant risk transfer deals of recent years.Finally, Tom's wine-tasting trips are bearing fruit as he explained how new businesses that aim to make it easier to invest in assets like wine, art or fancy cars are looking to use securitization technology and asset-backed lending to help them scale.

Amid the hustle and bustle of DealCatalyst’s UK Mortgage conference, GlobalCapital’s Tom Lemmon and European DataWarehouse CEO Christian Thun managed to find a quiet enough spot to sit down and record a special episode of Another Fine Mezz.A self-proclaimed “data guy”, Christian did a PhD in AI nearly 25 years before the rise of ChatGPT. He got into the securitization market while working at Moody’s, before joining European DataWarehouse in 2016.He told Tom about a recent report from his colleagues into whether better energy performance certificates on homes really means better credit quality mortgages; what needs to change in European securitization regulation; and why having the right data available is like an umbrella.Luckily the background conference noise could be expunged from the podcast with some editing wizardry.

On this week's episode of Another Fine Mezz the podcasting duo of host, Tom Lemmon and European ABS reporter, George Smith barely had time to come up for air thanks to the wealth of supply in the market and the publication of Mario Draghi's report on European competitiveness. Starting with Draghi's report, the former president of the ECB published his report for the European Commission and set out in rather more detail than before, how European securitization should be revitalised. One market participant said to GlobalCapital, it was no longer a "pious hope" of reform, but actionable changes that were now on the horizon. There are some concerns over whether the liquidity coverage ratio will be included in the bits of the EU Securitization Regulation that are up for reform, which one investor likened to making cars with only three wheels allowed. But overall, it is a further sign that the market could be freed from its regulatory chains sooner rather than later. Back in the real world, issuance for the year is set to be a post-global financial crisis record. And in large part, that is down to the amount of bank supply. George explained the two key reasons why it is happening this year and reflected on the frantic demand for Southern European mezzanine notes in the last couple of weeks too.

“What's in a name? That which we call a rose by any other name would smell just as sweet," wrote William Shakespeare in his play, Romeo and Juliet. In this week's episode of Another Fine Mezz, it seems that the answer is quite a lot actually, Bill. European securitization issuers are known for their creative labelling of SPVs, but it has always seemed somewhat silly and meaningless. But following the success of specialist UK mortgage lender Paratus' new mixed pool RMBS shelf, the £564m Braccan 2024-1, the value of keeping everything neat and tidy is clear. As European ABS reporter, George Smith said himself it was simply too hectic this week to mention every single deal that hit the screens this week. By our count, there were 10 deals that priced and the pipeline continues to grow. Alongside the manic market, roughly 400 securitization specialists took time out to attend S&P's European Structured Finance Conference in London, where there was a perfect storm of positivity. In part, it's driven by the active and stable market they have in front of them, but it's coupled with a tantalising hope that meaningful regulatory reform is on the way.And finally, while George wrote an ungodly amount trying to cover all of this off, host Tom Lemmon was busy gallivanting around London talking about his golfing success of the weekend and visiting Coterie Holdings, owners of wine-backed lender Jera and part owners of wine investing platform, WineFi. Thankfully, his 10 minute dissection of the wines he tried did not make the final cut.

This week on Another Fine Mezz, the carnage well and truly began in European ABS with 11 deals in the market. European ABS reporter George Smith and host Tom Lemmon barely came up for air last week. Issuer tactics will be interesting to observe from the sidelines, with many thinking that there's no reason to wait with demand so strong. However, George reckons that the US election won't create half as much panic as some syndicate desks assume.Finally, the podcasting quartet was in mourning for it was the last episode with CLO reporter (and co-founder of the podcast) Victoria Thiele. Although Victoria is definitely taking a six-week break, she may return in some capacity as a part-timer in October, so it's not all doom and gloom.If it is to be her last, there was fittingly humungous CLO news to make up for the occasion as European CLO manager Fair Oaks became the first to successfully launch a CLO ETF in Europe. However, to Victoria's dismay, its more aimed at institutional investors and high net-worth individuals than millenials with a trading app.

In this week's episode of Another Fine Mezz, host Tom Lemmon was standing in once again for the travelling George Smith, and while he expected a quiet mid-August week, the European ABS market had other ideas. The expectation was that the market would begin to stir following the UK bank holiday on August 26, but a number of auto ABS issuers began marketing deals early to ensure investors get a good look. It seems the expectation that September would be busy has been changed to September will be extremely busy. It could end up looking like a battle royale in no time at all. Looking further ahead, the question is how long it can last. Meanwhile in CLOs, the market looks to be having something of a volatility hangover with deals taking a bit longer to complete and landing a bit wider. That gave CLO reporter Austin Barnes his first opportunity to delve into the niche world of deal documentation, focusing specifically on overcollateralization (OC) tests. OC tests are used throughout a CLO to ensure that each tranche is protected, but further down the stack on the single-B's they become a useful guide for which investors hold the balance of power. Managers, desperate to get 3rd party equity involved, are trying to loosen the terms and get rid of OC tests on the single-B tranches but mezz investors are holding firm, for now.

This week on Another Fine Mezz was dominated by host Tom Lemmon's love of talking about a regulatory revolution in European securitization. The European ABS market was quiet once again, but that gave time to dissect a research paper by Risk Control and authored by a who's who of securitization's regulatory big beasts. There are number of transformative proposals put forward, but perhaps the most crucial is the way it seeks to reframe the debate towards how securitization can help the EU economy grow.Meanwhile in CLOs, CLO reporter Austin Barnes might just have had his first scoop with Acer Tree set to return to euro CLOs soon after an unlucky start a few years back. Finally, CLO reporter Victoria Thiele thinks she's found some more evidence to show that a first European CLO ETF is edging closer.

After a manic Monday on which some ABS bankers wondered whether we would even have a market by the end of the week, the Another Fine Mezz team is happy to report that we do.Yet again, ABS reporter George Smith appears to have deserted his post just when all hands are needed. He spent the week driving through the Scottish Highlands blissfully unaware of volatility indices, while host Tom Lemmon and the CLO duo of Victoria Thiele and Austin Barnes held the fort. Despite fears of a new global meltdown, Santander managed to add yet another prime RMBS from its Holmes Master Issuer shelf. It was only a day later than expected, and looked rather elementary by the end. Meanwhile in European CLOs, a market perhaps more directly affected by the meltdown that wasn't, the impact on sentiment really depended on who you asked. Nevertheless, by the end of the week a cautious optimism had taken hold — as Sona, Polus and Palmer Square all priced deals.As for the US CLO market, spirits rebounded remarkably quickly despite one banker's Armageddon forecast on Monday. By the end of the week, it was back to the usual rhythm.

On this week's episode of Another Fine Mezz, it was something akin to podcasting musical chairs with CLO reporter, Victoria Thiele, taking over from usual host Tom Lemmon, alongside the return of new CLO reporter Austin Barnes while George Smith stayed firmly put as ABS reporter. With August now upon us, it was perhaps no surprise that there were no publicly placed deals in European ABS this week. However, George did manage to find time to rage at the low-quality opinions circulating LinkedIn on significant risk transfer (SRT) deals. Meanwhile, in CLOs the resets keep on coming. The triple-As may be wider but with such dramatic tightening on the mezz this year, the overall costs keep the arbitrage working and managers printing. However, looking further ahead, loan shortages might soon start to scupper the euro CLO market. And finally, last week, Austin left listeners hanging over where his weird accent comes from and this week he reveals all... did you guess right?

This week on Another Fine Mezz, the usual suspects of host, Tom Lemmon and CLO reporter, Victoria Thiele were a man down owing to European ABS reporter, George Smith losing his voice - of all things. However, GlobalCapital now has a securitization podcasting production line not dissimilar to Australian cricket's fast bowling ranks, which meant it was time for a debut (more on the Australian cricket references later). George's absence paved the way to welcome the newest CLO reporter, Austin Barnes to the show.In European securitization, just one deal was priced, Bletchley Park Funding 2024-1, by specialist buy-to-let lender Quantum Mortgages. And with so little activity in Europe, an Australian reverse mortgage RMBS took the limelight. The deal, by Household Capital, was the biggest Australian reverse mortgage RMBS in a decade at A$263m ($172m), but the Aussie securitization market as a whole appears capable of teaching the European market a thing or two. Meanwhile in CLOs, resets and refinancings were the dominant force in the US, particularly as triple-A spreads are stuck in the 135bp over Sonia range. It's better news for Euro managers though, as third party equity appears to be back for good in Europe, at least for the tier one managers.

On this week's Another Fine Mezz, usual host Tom Lemmon was taking a well-earned break to play golf, but it seems his enthusiasm for the sport has spread to European ABS reporter, George Smith. Perhaps he was also inspired by the professionals in Troon this weekend. Away from golf, it seems European CLO equity may be getting easier to sell too. It's not quite "gimme" distance but for the biggest players, it is starting to feature in conversations more, CLO reporter, Victoria Thiele said. In European ABS, it was a delightful week for debut issuers with three out in the market for the first time. In 2024, there has been a notable increase in debut deals, in part because the market has been so treacherous in recent years. But it could also be a further sign that securitization is becoming a viable funding option once again.

GlobalCapital's CLO reporter, Victoria Thiele, returned to her desk just in time from her trip to Germany this week, in what was a collection of the weary thanks to international football and growing babies. With a less hectic week in the primary ABS market, securitization editor, Tom Lemmon, and European ABS reporter, George Smith discussed whether fine wine ABS might soon be a thing after an interview with a wine-backed lending platform.With the dust just about settling following the EU election, UK election and French parliamentary election, the big story of the week looked at how the momentum for regulatory reform in securitization would change in this new political dynamic. French president Emmanuel Macron may be weakened, but all is not lost, according to some market participants. On CLOs this week, managers glided inside 130bp over three month Euribor with deals from CVC Partners and Spire the first to get below the barrier. In addition, Victoria also explained how the economics of resets can still work even if its not a direct tightening on the triple-A notes. Finally, the Another Fine Mezz team had its fourth member play them out on the tambourine.

At last, the Another Fine Mezz team's CLO Series is back with a bang after to chatting to potentially the hottest property in CLOs. That is John Kerschner, head of US securitized products and portfolio manager at Janus Henderson. Also known as the man behind the mammoth CLO ETFs, JAAA and JBBB. Together, the two CLO ETFs have just under $12bn in assets under management, roughly doubling in size since the start of 2024. On the episode, Kerschner explained how ETFs work in a CLO context and the challenges they will still face. One of the biggest challenges is educating investors, whether they be new to CLOs or new to ETFs. And he also touched on Janus Henderson's plans for a European CLO ETF.As ever in the CLO Series, Kerschner spoke about how he went from an ecology graduate to a securitization investor, the keys to being a good investor, and how to stay as calm when things get hairy.