Contents

Asset-Backed Finance

SCI In Conversation Podcast: Jennifer Marques, Oaktree

We discuss the hottest topics in securitisation today...

In this episode of SCI In Conversation, Jennifer Marques, head of strategy and structuring for Oaktree’s structured credit strategy, sits down with SCI’s ABF editor Marta Canini to discuss why unrated, downside-protected ABF is particularly compelling in today’s evolving credit markets. Marques explains how Oaktree balances risk and return through deep asset and originator analysis, and how flexible, bespoke structures create value. She also highlights sectors such as digital infrastructure, aviation, and essential equipment financing, outlining the opportunities and potential headwinds shaping ABF's outlook heading into 2026.

This episode is available here, and on all major podcast platforms, including Apple Podcasts and Spotify. Just search for SCI In Conversation.

Marta Canini

CLOs

CLO single-B tranches face scrutiny as first brands fallout weighs on pricing

Poh Heng-Tan from CLO Research finds that recent BWIC activity highlights how maturity, MVOC and sector shocks are reshaping single-B spreads

Single-B tranches, given their position as second-loss in the CLO structure, are more exposed to idiosyncratic risk and may face heightened scrutiny in the aftermath of the First Brands episode.

In late September, a notable number of single-B tranches changed hands via BWIC, several of which carried exposure to First Brands. This has implications for MVOC and, by extension, the pricing of these tranches.

As shown in the table below, a one-point difference in MVOC can equate to an 80 DM swing for tranches at the weaker end of the spectrum, particularly those in the 101–102h range. The effect typically becomes more pronounced further down the MVOC scale. To date, none of the bonds in recent BWICs have an MVOC below 100%, and all are trading at levels under 1,000 DM.

Among the five short-dated bonds with WALs under 6.5 years, pricing remained relatively wide despite their shorter maturities.

For longer-dated bonds, spreads are even wider compared with shorter-WAL peers at similar MVOC levels. For instance, JUBIL 2014-12X FR3 and CONTE 6X FR both had MVOC of around 102h, yet the former drew a cover bid of 936 DM — significantly wider than the latter’s 885 DM.

Among the longer-dated group, three bonds with MVOC of 105h or better (and no exposure to First Brands) traded above par, with DM-to-maturity ranging from 780 to 815 DM. NEUBE 2025-7X F stood out, trading tighter than 780 DM, supported by its robust MVOC of 106h. If they are non-above-par bonds, DMs would be tighter.

Source: SCI, CLO Research

ABS

Tricolor not canary in the coal mine

Default of ESG lender does not suggest wider ABS problems

The collapse of sub-prime car lender Tricolor appears to be the result of fraudulent conduct and does not suggest there are more widespread structural flaws in this sector of the ABS market, suggest analysts.

Dallas-based Tricolor has executed a series of ABS deals, and is said to have close to US$10bn in outstanding liabilities. It most recently issued a deal in June, and at last glance the AAA tranches were dealing close to 78 cents on the dollar.

The back-up servicer, Vervent, has moved quickly into its position as successor servicer, and is said to have plentiful experience in dealing with non-traditional asset classes.

“All eyes are on the servicer. The success of these outstanding transactions will depend on how fast they can get the cash flowing again, which is a big if,” Elen Callahan, head of research at the Structured Finance Association (SFA), told SCI.

These deals also have internal credit enhancements which protect the higher rated tranches from extreme volatility, and they are short-term transactions as well so investors aren’t exposed for too long.

It appears that widespread double-pledging of collateral occurred at Tricolor, which was uncovered by the warehouse lender. The latter advances capital for relatively short periods of 60-90 days, so conducts due diligence with that frequency.

Tricolor was a so-called ‘Buy Here, Pay Here” lender, which means that it sells the car and then also advances finance. It owned all levels of the transaction, so it originates the loan, services it, repossesses the vehicle in the case of default and then values it for re-sale.

“You can see how bad actors can exploit this situation,” says Callahan.

It is also suggested that these bad actors numbered more than just two or three. Widespread fraud and collusion is thought likely, according to sources.

An irony of the farrago is that Tricolor was a darling of the ESG industry. It specialised in loans to Hispanic and underserved borrowers, and was a Community Development Financial Institution (CDFI) certified lender.

“While many BHPH operators responsibly serve underserved markets and provide vital access to credit, the Tricolor case underscores how vulnerabilities in the model can surface. Going forward, addressing these weak points will be critical in sustaining confidence in the market,” writes Callahan.

The BHPH market constitutes a little over 9% of the used and new, lease and loan car market in the US. Banks, captive finance arms, credit unions and finance companies represent the main forms of financing.

Simon Boughey

Asset-Backed Finance

Securitisation reforms could reshape European ABF market

Proposed regulatory changes to cut costs and boost transparency, if executed with proportionality

The EU’s proposed securitisation reforms could boost the European ABF market, with the potential to reduce costs while providing supervisors with a clearer view of activity. However, there are concerns that primary legislation may not be clear enough to prevent secondary rules re-imposing complexities and additional reporting requirements.

The package of reforms is wide-ranging and complex, combining elements that follow multiple different legislative tracks. Market reaction has largely focused on a carrot-and-stick trade-off.

On one hand, due diligence requirements may become more principles-based; on the other, reforms extend sanctions and remove the ability to delegate liability for non-compliance. Critics warn that the combination could negate any benefit: even if diligence rules are lightened, many investors are unlikely to alter their behaviour as long as liability and sanctions risks continue to grow.

This is particularly relevant for newer entrants establishing operations in private credit and ABF on the continent. For such firms, duplicative sanctions and a ban on delegating due diligence could prove to be especially problematic.

Another flashpoint is the definition of public versus private securitisations. Some warn that treating any EU listing as public risks dragging bilaterally negotiated warehouses into the public bucket.

Others note that parliamentary debates could even narrow the definition of ‘bilaterally negotiated’ into a party-count test - potentially disqualifying deals with more than a capped number of counterparties. Either change could disincentivise EU listings, with lighter-touch venues such as London’s ISM or Vienna’s MTF benefiting instead.

Origins of mandatory reporting

Regarding the potential impact of the Commission’s proposals on private transactions, True Sale International (TSI) ceo and md Jan-Peter Hülbert notes TSI itself originally put forward the idea of mandatory reporting for private deals. “We as TSI did actually make that proposal to the Commission, so somehow they picked up our idea,” he says. “We do have the European DataWarehouse in place since 2012 and it did create transparency and trust. I think that is definitely a positive consequence of disclosure. And this does work well in the public space.”

The logic, he explains, is that repositories like EDW have proven their value. “Transparency does increase trust, and then it helps the legislator to make good decisions and legislative proposals.”

However, he stresses that earlier technical approaches to disclosure created unnecessary complexity. “Now, did we need all the details?” Hülbert asks. “Did we need the ESMA templates? Certainly not in this format, especially not on the technical side. We didn’t need XBRL. And I think that’s going to be changed.”

Drawing on his role in earlier regulatory exercises, Hülbert adds: “I was part of the technical working groups from the ECB when defining the ECB templates, and we went through asset class by asset class. I was involved in auto ABS, and we had originators, investors, lawyers, rating agencies and supervisors at the table. It was a very constructive approach. I think the big dissatisfaction arose when ESMA tried to make it new and different without really improving.”

The precedent for transparency opening doors to market development has been set. The EBA and IACPM’s 2020 report on synthetic securitisations, which helped convince policymakers to extend the STS framework.

“Providing transparency by showing what is the market size, what are the asset classes, what are the performances – they were building trust. And that was the main reason why the Commission was convinced, and then Parliament and member states in the second step, to add synthetics to the STS framework,” says Hülbert.

That exercise, he argues, clearly demonstrated how greater disclosure can directly translate into regulatory recognition and market growth. By giving supervisors confidence, reporting requirements paved the way for SRTs to be brought into the mainstream through STS – and ultimately helped support the expansion of that market.

A similar need emerged for ABCP. Asked by Deutsche Bundesbank during Covid about market size and usage, Hülbert was unable to provide a clear picture. That spurred TSI’s benchmarking exercise, run with EDW and 12 banks across Germany, France, the Netherlands and the UK.

He says: “The result is the benchmark exercise, which you can see on our website. It tells us the European market, including the UK, is roughly €250bn outstanding. Compare this to ESMA, which reported €25bn, or the Joint Committee report, which wrote about €75bn. So our figure is far closer to reality.”

For Hülbert, this highlights precisely why voluntary reporting can be a great first step, but not sufficient in the long run. “Especially the non-EU banks said: ‘We understand what you want to do. It would be great to participate. However, we can only do reporting which we are obliged to do for regulatory purposes.’ So if we change the rule from voluntary into mandatory, we could have a real market picture.”

Oversight, not overreach

The goal, Hülbert emphasises, is not intrusive supervision at a deal level. “On the private side, those data will not be published. The access is strictly limited to what was decided by the legislature, especially the supervisors. The purpose should never be that, based on these data, the SSM can analyse the transaction in detail. That’s not the purpose. The purpose is that they can see how many transactions, and whenever they spot one they think they should be looking into, this needs to be done outside of the templates.”

Repositories are, of course, not public databases - although misconception lingers regarding who should access them. If private transactions are required to be submitted to a repository, many argue the intent should remain narrow: a supervisor-focused template, not asset- or loan-level reporting. Supervisors already have access to investor materials; any attempt to use securitisation disclosure as a back door to monitor underlying loan performance would be misplaced, as that supervision belongs at the institutional level.

Clarity is also needed on scope. Current proposals can be read as excluding third-country transactions from repository obligations, but market participants caution that this must be spelled out explicitly in a recital or memo. Without that certainty, secondary measures could reopen debate and undermine the reforms’ intent.

If designed proportionately, Hülbert argues, the reform would bring two big advantages: lowering the costs compared to today’s ESMA templates, and better macroprudential oversight for supervisors. “I cannot see how any market participant would have increased regulatory risk if it’s done properly. If you don’t punish anybody for confusing a dot with a semicolon, then it does improve the market,” he suggests.

Pushback and misconceptions

Some have voiced concerns that mandatory reporting would deter private ABS activity. But Hülbert believes that, if anything, mandatory reporting reduces costs compared to the current ESMA templates while giving supervisors better aggregate oversight. In his words, it “improves the market” by lowering compliance burdens and increasing trust in the data.

Alternative suggestions, such as sending simplified templates by email to regulators, miss the point. Supervisors, Hülbert stresses, need a structured, centralised system to ensure data consistency, quality checks and aggregation across the market – something email attachments do not provide.

Of course, this was not the intent of the proposed public/private boundary. “My understanding is that the reason for the proposed change is to cover CLOs. As far as I know, the CLO industry is already transparent – but not in the same way as public ABS,” observes Hülbert.

He adds: “If you look at how CLOs are marketed and executed, I like to say CLOs are public by nature but private by law. They write a document that looks like a prospectus, they do a listing on a non-regulated exchange if at all, but they do announcements on Bloomberg.”

In his view, CLO managers could adapt to repository reporting if it is implemented efficiently. “Of course, they don’t want to see increased costs, but if it’s done efficiently that could be positive,” he notes.

However, he cautions against penalising transactions that rely on technical listings for tax purposes. “In the SRT space, very often you have a CLN with a technical listing to keep it tax neutral and not trigger withholding taxes. The same for Italy – until a few years ago, every securitisation was obliged to do a listing, even if it was a prime securitisation between a corporate originator and a bank.”

Implications for ABF
For ABF, the central issue is not the definition of securitisation itself – which remains unchanged in the proposals - but in whether the reforms make securitisation treatment more attractive or less so. The EU’s definition remains highly technical, centred on credit-risk tranching and able to capture structures far beyond traditional ABS - leaving arrangers with a choice: to structure any given deal as a securitisation or not.

At present, many see more disincentives than incentives, particularly in areas like back-leverage CRE, which often stays outside the scope of securitisation. But reforms could shift that balance.

Improved prudential treatment, especially for senior STS tranches, could encourage ABF structures to take a securitisation form. For Solvency 2 investors, the capital benefit for senior STS positions could be particularly compelling.

So far, private debt funds have not been heavily engaged in the securitisation reform debate, given that they are not regulated. Yet their rapid growth raises supervisory questions, as Hülbert states: “That segment has grown tremendously. The question now is, what is happening there? We do not have a clear picture. From a macroprudential risk perspective, you want to know more about it to identify risk developments earlier.”

The same applies to SRTs, according to Hülbert. “SRTs are a very important tool for the banking industry to increase lending to the real economy, especially with stronger capital needs. The investors in them are non-banks, even though some might get leverage from the banking sector - how much we don’t know. So regulators are looking into it.”

Many caution that Brussels lacks the industry expertise needed to see how the reforms interact across securitisation, capital and prudential rules. Without that joined-up view, changes risk offsetting one another: a fix in one area may be undone by new hurdles elsewhere. Nevertheless, Hülbert is convinced the Commission’s reforms could ultimately strengthen Europe’s private securitisation market - including ABF - if executed with proportionality.

Claudia Lewis

Capital Relief Trades

LatAm SRT on 'slow burn' as IDB signals market surge

Further jurisdictions set to open up across the region

Latin America has long been seen as a region where excess bank capital, patchy data practices and volatile macro conditions limit the need for immediate balance sheet optimisation. Yet MDBs are now showing that SRT structures are not only feasible in the region, but also serve as a catalyst for deeper capital markets engagement.

In an exclusive conversation with SCI, Gabriel Yorio, vp for finance and administration at the IDB, shares that SRTs are already proving their worth, playing a central role in unlocking billions for development finance. “Synthetic risk transfers are one of the tools that allow the IDB to expand its development footprint without increasing its balance sheet size,” Yorio tells SCI.

“The IDB has used three mechanisms: exposure exchange agreements with other MDBs, which transfer part of our risk to countries outside the region; guarantees from shareholder governments, which provide sovereign backing; and credit insurance from private insurers, which brings in private sector participation,” he adds.

Evidently, synthetic securitisation is no longer foreign to Latin America, even if commercial banks have yet to embrace the instrument on a larger scale. The IDB and its private sector arm, IDB Invest, have already executed synthetic transactions - joining peers like the IFC and the EBRD, which use SRTs to manage concentration risk and free up lending capacity.

And while MDBs are paving the way, for many investors the real prize lies in when regional banks will be ready to step into the market.

LatAm: a region with potential, but little urgency

Mexico, Brazil and Chile are the jurisdictions that currently stand out as most promising for SRT adoption, thanks to their relatively deep and diversified financial systems. However, banks across the region are generally overcapitalised.

In Mexico, capitalisation levels are close to 20% - well above Basel 3 requirements - as of 1Q25, while Brazil (17%) and Chile (16.8%) also maintain strong capital and liquidity positions, an IDB report shows. And while building portfolios large enough for synthetic deals is possible, Yorio points out that factors such as data quality remain a sticking point for investors.

“For commercial banks, synthetic risk transfers often run into data quality problems: they manage thousands of loans, across multiple sectors, with varying structures and histories,” he notes.

“For MDBs, the situation is simpler. We work with a limited number of borrowers, our operations are standardised, and our credit history is very transparent. That makes SRTs more straightforward for us,” he continues.

Yorio adds that MDB portfolios - which benefit from preferred creditor treatment - provide insurers and investors with further confidence that sovereign obligations will be serviced even in stressed scenarios. “While data quality is a challenge in commercial banking, MDBs can structure SRTs more cleanly, and the IDB builds investor confidence by combining transparency with strong credit treatment protections.”

Replicating European SRT models

Beyond their own balance sheets, MDBs could help seed a regional SRT market by replicating models pioneered in Europe. “The EIF has used SRTs to support SME lending in Europe, and MDBs could adapt that model to Latin America,” Yorio says.

Guarantees to national development banks or private sector-focused risk-sharing arrangements, for example, could allow MDBs to bring private insurers and investors into the market. Recent IDB initiatives, such as debt-for-nature swaps in Brazil, already show how sovereign-backed credit can be leveraged to attract private capital for climate transitions.

“SRTs are part of a broader toolkit. By combining them with guarantees and blended finance, MDBs can open entirely new channels for private capital to flow into climate, infrastructure and SME development in the region,” Yorio notes.

Despite the slow progress, SRTs in Latin America are certainly gaining momentum. For now, activity remains concentrated among a small circle of players – from the IFC to regional subsidiaries of banks including Santander and BBVA.

But interest is now expanding beyond this petit comité as more banks enter the space. Sources point to Argentina, Chile, Uruguay, Mexico and Brazil as countries where appetite for synthetic securitisation is palpable.

In Brazil, two deals have been completed in the past few years, says Ed Parker, global head of derivatives and structured products at Mayer Brown. “It is really the country where SRTs could take off. There are plenty of eligible banks, a regulator that has implemented the necessary rules; and already a track record of approved transactions,” he explains.

One of the early SRTs in Latin America was the IFC-backed deal with Santander Mexico, where a US$93m synthetic risk transfer aimed to free up capital for SME lending. While there is market chatter of further capital relief trades in Mexico, progress is slow, Parker says - particularly in jurisdictions where data, portfolio alignment and structuring complexity come into play.

“There is certainly a lot of enthusiasm for SRTs in Latin America. It is a slow burner, but once the pieces are in place, things could really take off,” he concludes.

Nadezhda Bratanova, Dina Zelaya

Capital Relief Trades

South African SRT deal 'unsuccessful'

SRT market update

A source close to what was widely expected to become the first post-GFC South African SRT transaction has advised that the issuer’s application to the South African Prudential Authority has been unsuccessful. SCI revealed in May that a large South African bank was closing on its inaugural synthetic securitisation.

The deal was set to reference a static portfolio of corporate term loans, with the issuer intending to place two tranches with domestic investors. In the absence of any local guidance, the transaction was structured largely around European tranching and structural terms.

However, the regulator’s feedback indicated that there was too much potential risk in the retained senior tranche. No guidance was provided as to the potential remedy.

On a positive note, the transaction was not rejected for being synthetic, with the last synthetic portfolio transaction in South Africa having been executed pre-GFC.

The bank is understood to be reviewing its next move.

South Africa is possibly the only country in the world to have implemented Basel 3 final/Basel 4 in its original form. The forward modelling of the output floor shows this will significantly add to bank risk weighted assets. For a relatively closed economy, currency controls, high unemployment, very low GDP growth, illiquid bank portfolios and now rising bank capital demands, an SRT-type solution is viewed as critical to get across the line to help stimulate the real economy and maintain bank returns.

Vincent Nadeau

Capital Relief Trades

European issuer in the market

Well-known SRT shop offers high yield exposure

BNP Paribas has two SRT deals in the market, according to well-placed market sources, and is currently canvassing bids.

The first references a €2.5bn pool of mainly high yield loans, including some exposure to French LBO assets.

The attachment point is said to be 3.5%, and the detachment point is 12%. The French bank is believed to be offering a yield of the mid-to-high 7% range, which is deemed attractive given the relatively wide attachment point.

BNP Paribas in London declined to comment.

In addition, it is believed to have a second deal tied to around €2 billion of industrial leasing contracts in the market as well, though fewer details have emerged about this transaction.

The banks is one of the most established and prolific issuer of synthetic risk transfer transactions in the market, and has also a thriving arrangement business.

Simon Boughey

Capital Relief Trades

EM SRT gearing up for a busy autumn

SRT market update

Emerging SRT markets are gearing up for a busy autumn, with two Mexican transactions already in progress, sources tell SCI. One of these deals is backed by the IFC, while another is rumoured to have IDB’s support. Sources suggest that activity in the jurisdiction could provide a template for further Latin American SRT issuance. 

The deals are part of an expanding pipeline of at least five emerging market trades, anticipated by March 2026, comprising a mix of Latin American and CEE transactions. Sources familiar with the matter report that both the IFC and private investors are expected to participate. 

Notably, the IFC is understood to be backing a deal with a new CEE issuer in Romania, described as particularly innovative as it marks the first time an MDB has fronted for private investors in the region. The transaction is rumoured to reference a consumer credit portfolio. 

The upcoming pipeline underscores the growing role of MDBs in catalysing EM capital relief trades, with market participants noting that these structures are increasingly attracting both multilateral and private capital. 

Nadezhda Bratanova

Capital Relief Trades

CRE issuance on the rise

SRT market update

Commercial real estate SRT deals are on the rise in Q4, with four such transactions currently in the pipeline, sources familiar with the matter tell SCI.

Established issuers NatWest and Lloyds are each actively working on CRE deals. Other big names in the space are also seeking to close deals by the end of 2025, with some laying the groundwork for next year with a mix of first-time issuance and repeat deals.

Project finance transactions are also gaining momentum, reflecting continued investor appetite for diversified portfolios. 

Dina Zelaya

Asset-Backed Finance

Tamara secures landmark ABS in Middle Eastern fintech deal

BNPL facility reflects growing confidence in Gulf consumer credit market and online shopping boom

Saudi Arabian fintech Tamara last month secured a US$2.4bn Shariah-compliant ABS facility from Goldman Sachs, Citi and Apollo funds, refinancing and substantially upsizing a previous US$500m arrangement with Goldman Sachs. The scale of the deal marks a watershed for the region’s securitisation market, as Tamara's debut transaction with Goldman Sachs in 2023 involved a smaller US$150m buy now, pay later (BNPL) receivables portfolio.

"This landmark facility with our global financing partners accelerates our growth trajectory," comments Abdulmajeed Alsukhan, Tamara's co-founder and chief executive.

The transaction comprises US$1.4bn initially, with a further US$1bn available over three years. Debashis Dey, partner at White & Case, notes that the transformation in investor appetite would have seemed implausible until recently.

"Five years ago, I just don't think any of us would have imagined such sophisticated credit providers backing a Saudi consumer business,” he says. "That to me is really a game changer, an evolution of clearly both the economic backdrop, but also how they think about the legal backdrop and their comfort with the law."

Yet achieving that scale requires demonstrable traction. "It's chicken and egg," says Dey. "Your business has to be growing in a way that is convincing enough to attract that kind of funding and that kind of lenders."

Tamara plans to use the capital to expand BNPL into broader credit and payment products. The company now serves over 20 million customers across 87,000 merchants.

Dey attributes the sector's momentum to converging trends. "Society is opening up. And as society opens up, people are more prone to think about shopping," he says.

The rise of e-commerce has met a population that "may not have credit cards" but finds deferred payment appealing. "The advent of buy now, pay later is super convenient because you don't need to have a credit card to do it. And it's not even a credit product from the customer perspective; rather, the customer thinks of it as a delay in full payment of the purchase price for a purchased item."

One key advantage of the transaction is its structural similarity to international deals. Notwithstanding the Shariah-compliant framework and regional context, the transaction employs standard securitisation techniques, with foreign credit providers typically funding through offshore intermediary vehicles before channelling capital into Saudi Arabia.

"If anything, what's great about the deal is it's as similar as possible to any other international securitisation. The team employed identical legal solutions and approaches that we do in other countries and other securitisations," Dey confirms.

Tamara’s transaction follows similar deals in the region, such as one involving Gargash Group’s Deem Finance, announced in March, in which the UAE-based financial services firm secured an up-to-US$400m securitisation deal.

Marina Torres

CLOs

SCI In Focus: IFC joins MDB securitisation push with debut emerging market CLO

World Bank's private-sector arm prices $510mn securitisation to mobilise private capital for developing nations, as MDBs increasingly turn to CLOs amid funding pressures

The World Bank Group, through its private sector arm, the International Finance Corporation (IFC) has closed its first securitisation transaction in what it hopes will be a series of emerging market CLOs designed to tap into private investment and free up more space on its balance sheet for further lending.

IFC EM Securitisation 2025-1 priced on 28 August via Goldman Sachs with $510mn of corporate loans to 57 obligors from 26 developing nations, closing on 19 September.

The deal comprises a $320mn senior tranche (triple-A credit estimate from Moody’s), a $130mn unrated mezzanine tranche, and just under $60mn in equity. The World Bank said senior notes were sold to private investors, while the mezzanine tranche was insured by a consortium of credit insurers.

It is the first CLO under the Warehouse-Enabled Securitisation Program (WESP), launched in 2024, to scale private capital mobilisation in line with the G20’s call for multilateral development banks (MDB) to optimise their balance sheets.

Structured like a traditional CLO, the securities are backed solely by IFC-originated private sector loans transferred to a Cayman SPV, with IFC retaining 25% of the risk on each loan. The deal aims to prove the CLO structure can broaden the investor base for projects in developing nations.

A spokesperson from IFC tells SCI: “The transaction is a first-of-its-kind securitisation designed to open emerging markets to global investors. It is part of the World Bank Group’s strategy to attract more private capital for development by offering a standardised, scalable channel for institutional investors to access emerging market credit – aligned with their risk/return appetite.”

“A CLO structure offers one of the greatest opportunities to mobilise more private capital at scale. It is also a structure that investors are familiar with - making it easier for investors such as pension funds, insurers, and asset managers who might not otherwise invest in emerging markets - to participate in these opportunities.”

Yinni Li, senior credit analyst at Moody’s who is the lead analyst on the transaction, adds that the IFC transaction has more exposure to senior unsecured loans (45%) compared to first lien senior secured loans.

Speaking to SCI, Li describes the deal as “medium diversified” compared to other deals of a similar size, with maximum exposure for any single obligor sitting at 2%, leaving a “pretty granular distribution in terms of par”.

MDBs look to securitisation as funding declines

Similar to the WESP initiative, the IDB Group recently launched a further Reinvest+ initiative described as an effort to “transform proven local loans into investable global assets”, and free up slowing private capital flows into vital development projects.

Rosario Bustillo, associate at Kepler-Karst, outlines to SCI the geopolitical context behind the ongoing wave of MDB adoption in securitisation.

She notes, due to certain geopolitical instability and elevated protectionism, many of the member countries including the US are cutting their funding for multilateral aid bodies and so the World Bank is instructing its partner organisations to look into how they can tap into the private market.

"You have to remember that MDBs are banks but the shareholders are sovereign countries. So countries contribute money to the MDB, which serves as one of its financial resources, to then provide funding to other developing countries for projects or infrastructure. In the end the decision of every sovereign country is made according to various financial and political factors,” Bustillo explains.

"But with the US and other developed countries cutting contributions because of wars and domestic pressures, MDBs are facing what looks like a balance sheet crisis.”

Bustillo notes that while securitisation is not a cure-all, tools such as issuing CLOs can give MDBs greater independence from their sovereign shareholders and help them adapt to a landscape of shrinking funding commitments.

"MDBs are undercapitalised relative to the demands placed on them. People often forget that MDBs somehow exist because the ‘champion’ countries provide them with capital. With securitisation, MDBs would not rely solely on shareholder generosity but could expand into new areas,” Bustillo adds.

Same rationale underpins the IFC’s WESP

WESP’s inaugural deal may not have been perfect, but it lays promising groundwork for future prints. Mahesh Kotecha, president at Structured Credit International, a financial advisory firm, recalls IFC’s first attempt at a CLO-style vehicle, the Asia Latin America Loan Trust in 1994, which took four years to complete.

The long gap since then, he suggests, shows how unreceptive the market has been until now.

With the political climate shifting, the IFC is again turning to CLOs, positioning securitisation as a bigger part of its strategy. Kotecha sees IFC EM Securitisation 2025-1 as a proof of concept, but questions the economics.

Since only the triple-A notes were placed, the IFC retained a large portion of risk on its balance sheet - undermining one of WESP’s goals.

“Although they’re in the public sector, they want to make money, and I don’t know that this deal did,” he says. “If they don’t sell the junior tranches, they take the capital hit, which is substantial.”

By contrast, the African Development Bank’s 2018 Room 2 Run deal achieved greater capital relief by selling the mezzanine piece to a hedge fund. Kotecha warns the IFC may face hurdles with ratings agencies if it continues to retain the riskier portion of deals.

Still, the IFC frames WESP as a market-building initiative, rather than only about balance-sheet relief. Yet Kotecha argues the institution already has other channels to attract co-investment, so unless future transactions can offload more risk, the structure risks missing its mark. 

Ultimately, success will depend on whether the IFC can follow up with further prints and draw mezzanine investors. With around $300bn in MDB-originated loans - of which just $5bn has been securitised so far - the potential pipeline is vast.

Solomon Klappholz

Asset-Backed Finance

Inside Aluna Partners' SME lending bet

Co-founders Victor Rivera and Stefano Sciacca tell SCI how Aluna is leveraging ABF and trade receivables to tap Europe's overlooked SME credit gap

As banks retrench and SMEs across Europe and Latin America increasingly struggle to access credit, London-based Aluna Partners is moving fast to fill the gap. Founded in 2021 by Victor Rivera and Stefano Sciacca, the firm targets underserved SMEs through trade receivables and ABF solutions, offering tailored funding structures at a pace that many traditional lenders can’t match. With 10 new deals in the pipeline and a US$1bn AUM five-year goal, Aluna is carving out its position as an emerging alternative credit provider across Europe, the UK and Latin America.

“When Stefano and I met, we saw an opportunity: we could add value by finding niches that mainstream investors overlooked, applying private-market practices but assessing risk with public-market discipline,” says Rivera.

Originally, Aluna began as an advisory shop, licensed by the FCA to provide equity, M&A and credit advisory services. In 2021, the firm launched an investment management service, focusing on asset-backed and trade receivable financing.

“Three things define us. We’re focused on growth, tailoring solutions to help companies scale successfully. We’re an experienced, considered team, with global expertise, trusted networks and industry-recognised leadership. And we keep the complex simple - clear, accountable and always keeping clients a step ahead. That’s how we create lasting value,” says Rivera.

“Our investment process is digitalised and proprietary. We can close end-to-end in eight to 10 weeks – much faster than traditional lenders. And we rely on deep partnerships with trustees, insurers, FX hedging providers and agents, giving investors added layers of assurance,” adds Sciacca.

Why ABF and trade receivables

Both managing directors point to the SME funding gap across Europe. Despite steady demand, banks have tightened credit, often prioritising large corporates or pushing SMEs toward rigid products that don’t match their needs.

“ECB data shows the gap is widening,” notes Sciacca. “Banks’ terms can be unattractive or too rigid. That leaves strong SMEs underserved, and that’s where we come in.”

For Aluna, ABF and trade receivables represent the two most scalable solutions to this problem. ABF enables SMEs to unlock liquidity by borrowing against tangible assets, including vehicles, machinery and inventory. Trade receivables, on the other hand, monetise invoices and customer contracts - freeing up working capital without forcing businesses into dilutive equity raises.

“We build bespoke structures across both,” explains Sciacca. “Sometimes it’s secured by collateral, sometimes by receivables, and in other cases we blend the two. The flexibility is what makes us valuable compared to banks.”

Rivera adds that insurers play a crucial role in validating the model. “Insurance markets validate our approach. If it were too risky, insurers wouldn’t partner with us. Their willingness to provide credit insurance and guarantees confirms that disciplined private credit can thrive here. It gives comfort to investors and lowers the overall cost of capital for SMEs - a win-win.”

Case studies

Aluna backed a leading Mexican vehicle leasing firm when it had a fleet of a a few dozen cars in its portfolio and limited access to capital. Rivera and Sciacca worked closely with management to professionalise reporting, design scalable funding structures and build credibility with global investors.

Over the course of two years, Aluna’s support helped unlock more than US$200m in equity and debt, positioning the company to expand across Mexico, enter the US market and recently launch operations in Brazil.

“It’s a textbook case of how we like to work: identify growth, tailor ABF solutions, monitor closely, bring in institutional partners and evolve the financing solutions as the company’s ambitions grow,” says Sciacca.

In the UK consumer lending space, Aluna engaged with a fast-growing fintech consumer lender when managing only a few hundred thousand in outstanding loan book. Beyond providing initial funding tailored to its business plan, Rivera and Sciacca acted as advisors-in-residence, holding regular strategy sessions to refine underwriting models and strengthen governance.

Within a few years, the firm grew to nearly £10m in outstanding loans, with a roadmap to scale across the EU through embedded finance partnerships.

In the pipeline

Aluna focuses on five main geographies: the UK, Spain, Italy, Mexico and Colombia. “We’re not expanding wide,” says Sciacca. “We’re narrowing and prioritising.”

Rivera outlines the next 12 months: “We have 10 transactions in the ABF pipeline across consumer, SME and trade finance, worth around US$200m-US$300m. Our ABF portfolio is delivering an annualised yield of approximately 16%. Italy and Spain are a big bet for us in trade finance as we aim to consolidate a securitisation vehicle funding operations in these two countries worth around €100m-€200m, and our five-year goal is to hit US$1bn AUM.”

Marta Canini

Asset-Backed Finance

Intain doubles down on AI and tokenisation for ABF

Intain founder and ceo Siddhartha Siddhartha answers SCI's questions

Q: Earlier this year, Intain announced its partnership with KSD Capital. What’s the ultimate aim behind your marketplace platform and how has it evolved since the Wells Fargo initiative?
A: The end goal has always been to enable structured finance transactions to be done completely digitally – not just for the sake of doing it digitally, but in a way that addresses real issues in the market. Currently in the US, the minimum threshold for a deal is between US$150m-US$200m, which keeps a lot of issuers and investors out. A digital transaction can make exploration more efficient, so investors can find issuers more easily, helping lower that threshold.

Back in 2022, we participated in the Wells Fargo Innovation Initiative to demonstrate what that end state could look like. Which is taking the underlying loans, using AI to conduct due diligence on those loans, tokenise those loans as NFTs – so each loan had its own immutable identity, like a Social Security Number in the US or a National Insurance number in the UK. Then, any transaction that happens based on that loan – which could be a securitisation, whole loan sale or credit facility – can then be done digitally.

But nobody was at that stage ready to do a fully tokenised transaction and utilise that end-state platform. Instead, we focused on two standalone elements of that ecosystem: Intain AI and Intain Admin.

Q: How do these two solutions work in practice?
A: The first, our AI solution, was before the GenAI hype. We've built and run our own AI team for years and we now scale that AI diligence in partnership with custodian banks. That has grown and has reviewed more than 250,000 loans to date.

Intain Admin, the second part, is the standardising data and automating deal operations part. There were tools in that space already, provided by some rating agencies and a number of standalone analytics vendors, but they require users – issuers, investors, trustees – to purchase and run their own separate versions of this software. Our proposition was to run the entire transaction – end-to-end – on one integrated platform.

We borrowed from how ESMA introduced standard templates for each asset class in the European market – residential mortgages, commercial mortgages and so on – and applied that idea to the US. So, the moment a loan tape comes in from the servicer, it’s automatically standardised. The deal terms are modelled into the system, the coupons are calculated – it’s all built in.

That’s how we were able to scale up those two independent solutions. And because they work at scale – across US$20bn of deals and 50-plus transactions – we can now bring people onto the full platform. Not by selling tokenisation, but by offering a working system they’re already familiar with.

Q: And what made KSD Capital the right partner to go public with first?
A: They’re very forward-looking market makers. If you think about a lot of these fintech lenders – traditionally, they’d be funded by private credit. But what KSD is doing is different – they’re helping those fintech lenders get financed by regional and community banks in Texas. That’s not what people expect and it’s not easy to execute. So for us, they were a great fit.

At the start, they gave us a couple of their deals to test. We took the deal documents and were able to model everything onto our platform with no iterations. They were surprised. At Intain, we not only have the software that can handle the complexity, but the understanding of the business too. That made the whole process seamless – fintech lenders could plug into the platform and the financing banks could plug in too.

Q: Since then, you’ve also announced a second major partnership with FIS. What can you share about this partnership?
A: Yes, the second partnership is with FIS. They’re one of the biggest financial technology firms in the world and they serve 500-600, maybe more, community and regional banks across the US.

We’re integrating our platform directly with their banking systems, so lenders using FIS software will automatically have access to our platform for asset-backed financing. That means trustees are already plugged in, custodians are plugged in and now banks are joining – both as issuers and as investors. It’s all about building a complete ecosystem where everything is connected.

Q: What kind of feedback have you had from people using the platform so far? What are the features or functions that stick with them?
A: If I were to try to sell Intain Markets as a complete solution, it’s tough for people to visualise or believe that these benefits are possible to achieve. If I go to someone today and say: “You can make a US$15m deal viable,” most won’t believe it. The industry is just so conditioned to think that anything below US$150m doesn’t work.

So, what sells today are those two core tools: Intain AI for due diligence and Intain Admin for deal operations.

With Intain AI, if you need to diligence 5,000 loans or verify underwriting guidelines, you’d usually have to keep throwing people at it – or rely on sample-based checks. But with automation, you reduce cost, reduce risk and stay compliant – because you’re reviewing every document, not just a sample.

On the Admin side, this is an industry where investors receive reports 25 days after the month closes. If something happens on 1 May, investors won’t hear about it until 25 June. That’s a 55-day lag.

And every servicer sends data differently, so you have to keep processing, reconciling, chasing clarification and going back and forth with the trustee. Our platform standardises and automates it all. It’s compliant, integrated and delivers reports in near-real time. That’s an easy sell.

So, the AI and Admin tools are what bring people to the table. And once users are there, they see that half-a-dozen other counterparties are already sitting around that table – each for their own reasons – and then they start interacting. That’s how we see the ecosystem growing.

Q: The structured finance market is noted for its scepticism surrounding digital solutions and there are still plenty of people in the space who would be inclined to switch off at any mention of ‘AI’ or ‘blockchain’. Is that something you’re still having to contend with in 2025?
A: Absolutely and we’ve had to make design choices which cater to those habits.

Ideally, we’d want servicers fully plugged into our systems – which is what we’re doing with FIS. But we know many are still sending loan tapes as Excel attachments via email.

So, our platform allows you to upload those Excel spreadsheets and still get the benefits of the platform – automatic standardisation, compliance checks and so on. The same goes for modelling deal terms – the syntax we use is similar to Excel and SQL. So, if someone’s used to reading an indenture clause and typing formulas into Excel, they can do the same thing in our system and the back end will convert it into code.

It’s not a revolution, it’s an evolution. Come in for the benefits you see today and over time we’ll convert you.

Q: Transparency is a hot topic in the ABF space and lots of people are looking to digital platforms to increase it within private credit. How does Intain help with that?
A: There are a lot of standalone analytics tools selling software licenses to investors. But anyone who has worked with data knows that it’s not just about the analytics – it’s about where the data comes from and how it’s handled.

Our analytics also sit on a blockchain network. That means if you’re looking at our dashboard as an investor, you know exactly where the data came from – which servicer, which administrator. It’s fully traceable.

We also bring that same level of transparency to smaller deals. So, a US$5m transaction gets the same rigor and reporting granularity and compliance as a US$250m one.

That ‘zooming effect’ isn’t common - you can look at your portfolio, zoom into a deal, then zoom into an individual loan. Because every loan is recorded as an NFT, you can click on it and see its complete history.

Q: That sounds like it could support market-wide analytics. Why haven’t you gone down the market intelligence route?
A: That’s a deliberate choice. We don’t aggregate data. Each relationship – issuer to investor – is isolated. An investor’s portfolio is isolated. We don’t merge data to create an industry view – we don’t provide aggregated insights or create any sort of market intelligence.

Some competitors do – however, our priority is trust and transparency. We want people to feel this is the most trusted and transparent place to transact and we can leave others to solve the intelligence problem.

Q: And finally, what does growth look like from here? More partnerships? More liquidity?
A: Absolutely, and the FIS partnership is a big part of that. But one big distinction in our approach is that we’re not getting a broker-dealer licence.

We’re not trying to become a market maker. Instead, we’re inviting market makers, placement agents, arrangers, investment banks – people like KSD – to come and use our platform to get their deals done. They will find investors and issuers already on our platform – and even if they bring both, the transaction will still run faster and be easier to execute.

We want to remain a completely neutral software platform and not compete with the people we’re trying to bring in. That’s how we’re building.

Claudia Lewis

Structured Finance

Job swaps weekly: Apollo launches sports and events investment division

People moves and key promotions in securitisation

This week’s roundup of securitisation job swaps sees Apollo Global Management launching a sports and live events focused investment division. Elsewhere, Newmark has hired two partners to build out its European data centre activities, while Tikehau Capital has named a new deputy head of private debt. 

Apollo has launched Apollo Sports Capital (ASC), a new investment business providing capital solutions across the global sports and live events ecosystem. Seasoned sports investor Al Tylis has been appointed ceo of ASC, with Apollo partners Rob Givone and Lee Solomon becoming co-portfolio managers of the platform. Sam Porter has been named chief strategy officer for ASC.

ASC will invest predominantly in credit and hybrid opportunities in the sports landscape, spanning franchises, leagues, venues, media and events. The permanent capital holding company is designed to be a stable, long-term partner to the sector, providing patient capital and adding strategic value.

Prior to joining ASC, Tylis led numerous sports investments, including as owner and chairman of Club Necaxa, La Equidad and the Brooklyn Pickleball Team. He also serves on the boards of G2 Esports, United Pickleball Association and Canvas Property Group, and is the co-founder of the Tylis Family Foundation. Tylis is a former real estate executive, having most recently served as president and ceo of NorthStar Asset Management.

Meanwhile, Newmark has hired Hamish Smith and Oliver Weston as partners and European co-heads of data centres. The duo will work alongside the firm’s wider capital markets and debt, equity and structured finance teams across UK and Europe. They will focus on data centre and powered land investment, development, capital raising and refinancing mandates across the UK and Europe, the firm said in a statement. 

Smith leaves his role as director on the data centre capital markets team at JLL after five years with the business. He previously spent six years at Smart4. Weston joins from Knight Frank, where he spent almost four years as an associate on the data centre advisory team. He previously spent two years at Carrowmore Property and six years at Citygrove Securities.

Tikehau Capital has appointed Martino Mauroner as deputy head of private debt, in addition to his current responsibilities as head of private debt Italy. In his expanded role, Mauroner will oversee the management of the private debt teams in Germany and Spain alongside the country heads and will be responsible for coordinating the co-investment process for credit.

He will also join the senior debt investment committee, in addition to his current membership in the direct lending committee. Mauroner will continue to report to Cécile Mayer Lévi and Maxime-Laurent Bellue, co-heads of credit at the firm.

With over 20 years of experience in credit and leveraged finance, Mauroner brings deep expertise in originating, underwriting and managing complex debt transactions. Prior to joining Tikehau Capital in September 2019, he spent more than a decade in the banking industry - primarily at Crédit Agricole, where he held various senior positions in credit and leveraged finance, including as structured finance manager based in Milan.

Fiona Chan has joined Lloyds’ securitised products group in London as a director. Chan was previously head of principal funding and securitisation at Barclays, responsible for structuring and executing secured funding and risk transfer transactions for the bank. Before joining Barclays in June 2010, she was a securitisation manager at Deloitte.

François Belot has joined BBVA's credit solutions trading team in London as a trader responsible for complex/structured lending and associated risk-sharing within the bank’s investor franchise. He was previously executive director, head of SRT solutions at JPMorgan, which he joined in July 2004 as a structurer on synthetic credit products.

Moody’s has named Andreas Wilgen md and head of its European structured finance group, based in London. He was previously md and co-head of Fitch’s global cross sector group, responsible for credit rating analysis for non-traditional securitisations. Wilgen joined Fitch as an associate director in April 2005, focused on European CLO ratings.

TD Securities has appointed Geoffrey Soal as md and head of SRT origination, based in Toronto. Soal was previously director, risk and capital solutions at BMO, which he joined in February 2017 from Lloyds.

Brookfield has acquired a majority stake in asset manager Angel Oak in a strategic credit play. The transaction intends to boost Angel Oak’s growth and broaden Brookfield’s credit reach – particularly into RMBS. The partnership combines Angel Oak’s mortgage-credit expertise with Brookfield’s investment capacity across infrastructure, real estate and corporate credit as well as ABF.

Empire Capital Solutions has recruited Leon Musmann as an associate director on its structured finance and venture debt transactions. Musmann joins the London-based debt advisory firm from Virgin Money, where he operated as a structured finance director on the venture debt team. 

Seyfarth Shaw has poached three New York-based securitisation lawyers from Arnold & Porter. Henry Morriello joins the firm as partner, while Karsten Giesecke and Michael Karol have been named counsel in its corporate finance team.

And finally, Fiona de Lacy has been named md of Arthur Cox Corporate Services, reflecting the firm's expansion into services that complement its core legal, tax and listings offering. The group will provide expert director and corporate services across a wide range of structured finance, securitisation and aircraft leasing transactions. De Lacy previously established and led the Irish corporate services business at Walkers Ireland.

Corinne Smith, Caudia Lewis, Kenny Wastell