(^44) International Financing Review March 7 2020
Timing has not been kind to LendInvest:
its debut deal in June last year came when
the market began worrying about
oversupply from the UK specialist lender
sector, and the deal struggled for traction
with its seniors coming at 130bp, wide of
IPTs.
Joint leads on the new issue were
Citigroup, JP Morgan and NAB.
The portfolio is sized at £285m and holds
1,484 loans with an average size of £192,048.
The weighted average current LTV is 72.75%,
seasoning is 4.9 months and the WA interest
rate is 3.52%.
Loans to companies make up 63% and
individuals 37% and greater London makes
up 36% of the pool. Borrowers with CCJs of
OVERûa ûINûTHEûlVEûYEARSûPRIORûTOû
origination make up 0.5%.
CREDIT AGRICOLE PULLS IN HEFTY BOOK
FOR FRENCH RMBS
CREDIT AGRICOLE sold €1bn of Triple A bonds
from French RMBS CREDIT AGRICOLE HABITAT
2020 last week as expectations of ECB
support helped overcome the wider market
dislocations.
“It appeared to be almost unaffected by
the market backdrop,” said one banker
away from the deal, although tighter pricing
would have been likely in a more normal
market environment.
According to another banker away:
“People know that there is underlying
support for the transaction from the ECB,
and it will hopefully continue to have that
in secondary as well.”
The deal’s €1bn of 4.88-year Triple As
came 1.7 times covered at 24bp over three-
month Euribor, which followed IPTs of high
20s and then guidance at 24bp–26bp (WPIR).
“There is certainly still demand for prime
RMBS,” said Pierre Mouradian, head of
structured bonds and euro ABS syndicate at
Credit Agricole. Credit Agricole was sole lead.
“For any transaction the question is how
credit intensive it is – and we were at the
lower end,” Mouradian said. “French RMBS
is still quite rare, and some investors saw
the deal as an opportunity to pick up prime
paper at a slightly better level than before.”
The asset class may be relatively rare, but
one day after Habitat was priced, CREDIT
IMMOBILIER DE FRANCE DEVELOPPEMENT took the
opportunity to mandate BNP Paribas and
Credit Agricole for its own French RMBS,
HARMONY FRENCH HOME LOANS FCT 2020-1.
When Credit Agricole last came with a
public deal, in April 2018, its 20bp print was
6bp outside the level achieved by a new
issue from Dutch RMBS Obvion.
Obvion visited the market in January this
year, selling Storm 2020-1 at 15bp. That
suggests a January trade by Credit Agricole,
before fears about the coronavirus became
widespread, could have come much closer
to 20bp.
POLARIS 2020-1 FILED BY PEPPER
MONEY UK
POLARIS 2020-1ûWASûlLEDûATû#OMPANIESû(OUSEû
last week, suggesting PEPPER MONEY UK is
preparing the second issue from the UK non-
conforming RMBS programme it established
last year.
Pepper printed Polaris 2019-1 in June,
selling a £218.857m two-year Triple A
tranche some 1.6 times covered at Sonia
plus 125bp, above four publicly marketed
mezzanine tranches.
A turbo amortisation feature was added to
the structure during marketing.
The notes were backed by a £263.7m pool
OFûlRSTûRANKING ûNON
CONFORMINGûMORTGAGESû
originated by Pepper Money. Re-mortgage
and debt consolidation loans made up 47%,
and buy-to-let 25%. Some 20% of borrowers
had CCJs in the three years before loan
completion.
Citigroup, Commonwealth Bank of
Australia and National Australia Bank were
joint leads on last year’s deal.
EMEA ABS
BMW’S UK AUTO ABS NAVIGATES
ROCKY ROAD
BMW FINANCIAL SERVICES found solid demand
after a traditional bookbuild for its Triple
A-only UK auto ABS last week when it sold
£300m of two-year paper – more than twice
covered – at Sonia plus 62bp.
Joint leads BofA Securities and Lloyds
released initial price thoughts for BAVARIAN
SKY UK 3 at mid-60s on Wednesday morning
and reported over £400m of orders by the
end of the day.
Guidance on Thursday morning was
62bp–65bp, when the leads gave an
expected placement size of £250m–£300m.
That allowed the possibility of selling less
than the full £300m tranche size indicated
by the initial structure.
But the full amount was easily placed by
the end of Thursday, when the tranche
came 2.1 times covered at 62bp.
That level is still noticeably wide of the
previous UK auto ABS from one week earlier,
when Vauxhall Finance sold the senior notes
from E-Carat 11 at 58bp over Sonia, for a
slightly longer 2.5-year average life.
All the BSKY loans are in the personal
contract purchase format that now
dominates the UK market, exposing the
issuer to residual value losses if used-car
prices fall.
There are 18,913 loans with a £20,785
average discounted balance, and 11.3
months seasoning. The new/used split is
70%/30% and all loans are made to private
clients.
BMW last issued of its UK programme in July
2018 when it sold a £300m 1.86-year Triple A
tranche at one-month Libor plus 55bp.
HARD LIMIT AT ZERO FOR CEMBRA’S
SWISS AUTOS
CEMBRA MONEY BANK priced its latest Swiss auto
ABS on Tuesday, settling for a zero yield on
the SFr230m Triple A bonds issued by SWISS
AUTO LEASE 2020-1.
Three weeks ago another Swiss auto
securitiser, Emil Frey’s Multilease, was able
to squeeze investors below zero for its ABS,
First Swiss Mobility 2020-1.
And initial price thoughts for Cembra’s
deal on Tuesday morning did include a
negative yield in the range, which was given
at –0.02% to +0.03%.
But risk appetite has clearly changed
since the Multilease deal and Cembra ended
up setting the yield at zero, equivalent to
mid-swaps plus 78.8bp.
Zero was a hard limit for half of the order
book, according to one of the leads, who
noted that the four-year expected maturity
was a year longer than most Swiss ABS.
There were 16 accounts, with asset
managers making up 43%, insurance 26%,
banks 25% and pension funds 6%.
The notes are backed by a SFr470m
portfolio of leases to mainly private
customers. There are 22,363 leases with an
average balance of SFr21,019, and a new/
used split of 36.2%/63.8% used.
Credit Suisse, Deutsche Bank and Zuercher
Kantonalbank were joint leads.
DBRS WEIGHS EFFECT OF NORTHERN
ITALY LOCKDOWN ON CMBS
DBRS Morningstar does not expect the
coronavirus outbreak in Northern Italy to
trigger immediate credit events in the four
Italian CMBS it rates, but warns a prolonged
LOCKDOWNûPERIODûCOULDûLEADûTOûDIFlCULTIESû
for tenants.
More than 50% of the debt outstanding in
those four CMBS is located in Northern Italy,
including three shopping centres in
Lombardy, the area most affected by the
outbreak.
h&ROMûAûCASHmOWûPERSPECTIVE ûSHOPPINGû
centres’ rental income is less likely to be
immediately affected as most of the tenants
AREûOBLIGEDûTOûPAYûAûlXEDûRENT vûSAYSû$"23û
“This will not immediately reduce
because of subdued sales without requests
for temporary relief, or tenant
bankruptcies.”
6 IFR Bonds 2323 p 25 - 53 .indd 44 06 / 03 / 2020 19 : 18 : 08
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