Another Fine Mezz

A jam-packed episode of Another Fine Mezz this week meant a full line-up of podcasters was needed, and they duly delivered. With European securitization reporter, George Smith, away for the last couple of weeks, he was forced to pick his favourite. As ever on the podcast, creativity in the market is rewarded and so it was perhaps unsurprising that the auxmoney-owned Lender & Spender deal named after a dog won out. CLO reporter, Victoria Thiele had been away for most of the week, leaving host Tom Lemmon to straddle both US and European CLO horses. The US market, led by AGL Credit's 140bp over Sofr print, is flying. At the time of recording Euro CLOs was winding down, but a late Friday rush was expected and five managers got a variety of transactions done before the Global ABS conference. In addition, for the second half of the podcast George spoke to Mirco Iacobucci, senior vice president and sector lead of European real estate ratings at Morningstar DBRS for a sponsored interview on CMBS. With CMBS having a mini-revival this year, the pair discussed the birth of data centre CMBS in Europe, performance issues in the sector and the outlook for the rest of the year. 

This week's episode of Another Fine Mezz had a distinctly American flavour to it, owing to CLO reporter, Victoria Thiele's trip to New York and the rapid tightening in the US CLO market. In addition, European securitization reporter, George Smith, was away taking a well-earned rest after his gigantic contribution for GlobalCapital's Global ABS special report (which delegates can get their hands on from June 4). The US CLO market has tightened dramatically in the last couple of weeks. Where once 150bp over Sofr on the triple-As was considered a hard line in the sand for investors, some managers are close to printing at 140bp and many expect it to continue down towards 135bp. Meanwhile, the squeeze on spreads has eroded the tiering premium to all but a couple of basis points for the tier two and three managers, such is the demand for CLO paper. Finally, the Another Fine Mezz team is delighted to announce that they have twisted the arm of Invisso just enough to get the chance to record the podcast live from Global ABS in Barcelona. The podcast is scheduled to go live at 2.10pm CET in the exhibit hall, where all are welcome to enjoy the usual ramblings over lunch. 

This week on Another Fine Mezz, securitization editor Tom Lemmon gave usual podcasters George Smith and Victoria Thiele a well-earned rest. That was to make way for Michael Herzig, senior managing director and head of business development at First Eagle Alternative Credit in the first episode of GlobalCapital's CLO series.The US CLO market is back firing again with some now even contemplating whether 2024 will exceed the banner year of 2021. Herzig discussed how he thinks the rest of the year will play out, how middle-market CLOs will grow in importance, and how the market has helped reinvent itself in the years since the global financial crisis. The second half of the episode discussed Herzig's over 30 years in the industry, including sitting just four desks away from Greg Lippman of Big Short fame as the first rumbles of a looming crisis arrived. Finally, Herzig shares the keys to success in the world of CLOs, perhaps best summarised as "don't be a jerk".  

This week on Another Fine Mezz, the spectre of challenging diaries due to time difference meant usual host and securitization editor Tom Lemmon had to miss out. However, European reporters George Smith and Victoria Thiele went on a whirlwind tour of securitization in super quick time. Although it seems some in the market may need to go back to school because there's a CMBS comprised solely of data centres, rather than the usual commercial real-estate mortgages. But as George said, the 'M' stands for data centre. There's also an update on the booming significant risk transfer market, with issuers beginning to prefer cash deals.Meanwhile in CLOs, Brigade made a roaring return to the market after three years away (who can blame them?). With arbitrage the best it's been in a while, they've even secured third-party equity. 

The UK had a lot going on politically with its local and mayoral elections last week, which perhaps explains why the future of UK securitization regulation wasn't on the front page of the nationals.However, for GlobalCapital's team of securitization podcasting hacks on Another Fine Mezz, it certainly was.European securitization reporter, George Smith discussed what changes have been finalised in the new UK regulations which will come into force on November 1. There is also hope that it will lay the groundwork for more radical reforms in the future. Surely, things can only get better. There is also an unusual pipeline developing in European ABS, with two CMBS transactions in the works alongside a huge Italian RMBS. Finally, CLO reporter, Victoria Thiele has less deal activity to report on but managers are still grinding away to tighten the market. Palmer Square has led the way, dragging the market to pre-Ukraine war levels. 

It was another week of 100% attendance from the Another Fine Mezz team, but such was the quality of stories this week, there was a fair bit of bickering over who got to go first. For the starter, European Securitization reporter, George Smith had Santander's mammoth German consumer ABS to discuss, where investors chose to fill up on mezz. Then, the main course was provided by CLO reporter, Victoria Thiele (and to a lesser degree, securitization editor, Tom Lemmon) as the European market salivates at the prospect of its first CLO ETF after seeing the boom in the US. Continuing with the culinary theme, dessert is learning the lengths to which George Smith will go to watch his beloved Arsenal in the North London Derby. 

A full house again on Another Fine Mezz this week where CLO reporter Victoria Thiele was practically bouncing off the walls with three Euro CLOs to report on. However, host Tom Lemmon didn't quite burst her bubble as much as put into context how small it is with an update on the flood of primary market supply in US CLOs. The question across the Atlantic is whether spreads can tighten with so much in the pipeline. Finally, in less pleasing news, European securitization reporter George Smith explained the issues facing the first ever Green European CMBS, River Green after it was downgraded for the second time by Moody's. 

This week on Another Fine Mezz, the full podcasting trio was on hand to digest yet another hectic week for European Securitization. First up, ABS reporter, George Smith - with his wonderful new microphone - explained why Belmont Green's buy-to-let RMBS deal took the plaudits amongst a packed field, and even got the GlobalCapital cartoon as reward for printing just 40bp wide of UK prime RMBS.In CLOs, reporter Victoria Thiele spent the week continuing to analyse how the Altice debacle would affect CLO managers, and in particular, their triple-C buckets. Securitization Editor, Tom Lemmon also chipped in with more positive news from the US CLO market, where the pipeline is so busy its preventing anyone from tightening their triple-As.

In an admirable effort to bring securitization to the people, George sat down on a Monday morning straight out of a holiday, beard still wild and unkempt, to discuss the latest movements in the ABS and CLO market with Victoria.Unusual activity in the second lien UK RMBS market kept the GlobalCapital reporters busy last week. George dug into the drivers of growth in this niche sector. For listeners who cannot get enough of second charge mortgages, Victoria spoke about Equifinance's recent debut deal on AFM's sister podcast in George's absence on FridayPrimary CLO activity is taking its sweet time to restart after Easter, but great things may lie ahead: Deutsche Bank bumped its new issuance forecast for 2024 up to €37bn off the back of a record first quarter. Victoria discussed how amortisations could increasingly drive supply and demand in the months to come. 

◆ Don't sweat the downgrade ◆ ABS rush ahead ◆ Another Fine Member for the teamThree became four this week on everyone's favourite securitization podcast. GlobalCapital's newest reporter Diana Bravo joined the team from New York to say hello and discuss an interesting development in the US solar ABS market.Rating agencies downgraded Altice in the wake of a fateful investor call. This was bad news for European CLO managers, given that the French telecoms company is the single most widely held name in their portfolios. The situation made for some thunderous headlines, but fears of a major impact on the market are exaggerated, found Victoria Thiele.A wave of ABS issuance kept George Smith on his feet for large parts of March, and it looks like issuers are just getting started. Bankers, investors (and journalists) should prepare for a busy market until the Global ABS conferencein June.