Monday 29 July 2019 11:40 London/ 06.40 New York/ 19.40 Tokyo

A review of securitisation activity over the past seven days

Transaction of the week
Unusual securitisation backed by music rights collateral (SCI 23 July)

SESAC, a music rights firm acquired by Blackstone in 2017, is marketing an inaugural whole-business securitisation. Dubbed SESAC Finance 2019-1, the US$560m transaction is structured by Guggenheim and secured by music affiliate agreements, license agreements and software and intellectual property of the SESAC Group.

The transaction has been assigned provisional ratings by Morningstar and KBRA of triple-B/triple-B minus on the US$30m class A1 notes and triple-B/triple-B minus on the US$530m class A2 notes. The class A1 notes are variable rate and can be drawn on a revolving basis until the renewal date of July 2024, while the class A2s are fixed-rate and have an anticipated repayment date of July 2026.

The transaction is supported by SESAC's strong revenue growth since 1994, which continued to grow even during the last recession. This is due, says Morningstar, to the on-going growth and diversification of SESAC's affiliate-based business model and its expanding licensee network, across its different revenue-generating channels.

 

Stories of the week

Offshore investment in Chinese ABS soars
Investors find relative value in second largest ABS market

Italian renaissance?
Spike in new issuance supported for now

Benchmark SRT inked
Bank of Scotland completes unusual synthetic UK RMBS

Unique approach
Underwriting flex space in CMBS examined

 

Other deal-related news

  • Scope Ratings has downgraded Elrond NPL 2017 after a performance review. The move appears to be a deal-specific one, as most European non-performing loan ABS deals are performing as expected (SCI 23 July).
  • The Lusitano Mortgages No. 2 RMBS is set to be redeemed in full at its principal amount outstanding, plus accrued and unpaid interest, on the August IPD. The move comes after trading of the notes was suspended by the Irish Stock Exchange (SCI 22 July).
  • LendingClub has issued its next-generation certificates - dubbed Levered Certificates - backed by over US$100m of marketplace loans originated via the platform. The structure consists of two securities: one equity certificate and one fixed-rate note (SCI 23 July).
  • Charter Mortgages is set to sell its residual economic interest in the Precise Mortgage Funding 2019-1B RMBS to JPMorgan - which managed the sale process and purchased the RC2 certificates for onward sale - for a cash consideration of £6.2m. The transaction is expected to complete on 31July and will generate a pre-tax gain of £28.8m and a reduction in risk-weighted assets of circa £206.7m (SCI 26 July).
  • NAB has provided a A$130m ABS warehouse facility to Brighte - an Australian digital platform that facilitates payment plans for solar energy, batteries and home improvements. As part of this the bank also provided A$80m as the senior funder (SCI 26 July)

Data

 

Pricings
Deals that priced last week included:

Auto ABS
CarMax Auto Owner Trust 2019-3; DT Auto Owner Trust 2019-3; Enterprise Fleet Financing 2019-2; Ford Credit Auto Lease Trust 2019-B; USAA Auto Owner Trust 2019-1

Non-auto ABS
Brignole CO 2019-1; Discover Card Master Trust 2019-A2; Mill City Solar 2019-2; Navient Student Loan Trust 2019-E; Oportun Funding II Series 2019-A

CLOs
Ares European CLO XII; GoldenTree Loan Management US CLO 5; HPS Loan Management 15-2019; Parallel 2019-1; Whitebox CLO I

CMBS
Bank 2019-BNK19

RMBS
Galton Funding Mortgage Trust 2019-2; Hawksmoor Mortgage Funding 2019-1; Light Trust 2019-1; RedZed Trust 2019-1

BWIC volume

 

Upcoming SCI event
Capital Relief Trades Seminar, 17 October, London


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