Ep72 - Synthetic Credit Risk Transfers: A Growing Market

Rahel Avigdor, Managing Director of Consumer ABS at KBRA, joins host Patrick Dolan to discuss trends in auto loan securitizations. Rahel provides her perspective on how the prime and sub-prime auto loan securitization markets performed in 2024, changes she may expect in these markets in 2025 under the Trump Administration, key ratings criteria for rating auto loan securitizations and any new features that she is seeing in auto loan securitizations.

Michael Bright, CEO at Structured Finance Association joins host Patrick Dolan to discus the complexities of GSE reform. We explore key issues including the balance between nurturing the private RMBS market and ending conservatorship, adjustments to loan limits, and restrictions on GSE activities. Fred provides his insight on administrative reform risks, the role of credit risk transfers, capital requirements, government guarantees, and the SEC's oversight on reporting standards.

Alan Todd, CFA, Head of US Commercial Mortgage Backed Securities (CMBS) Research at BofA Securities, joins host Patrick Dolan to discuss the trends and expectations for the CMBS market in 2025. Alan shares his outlook on CMBS delinquency rates, special servicing rates, investor interest in alternatives such as data centers, single family rentals and self-storage and CRE CLO issuance as compared to 2024 levels. We also cover the office market dynamics in major cities, including quality shifts, supply shortages and tenant demand for second-tier office space as well as the outlook for the multifamily sector.

Robin Wigglesworth, editor of Alphaville, the Financial Times financial blog, joins host Patrick Dolan to discuss the differences between synthetic and non-synthetic CRTs, common types of CRTs and their appeal to investors. Robin also reviews the historical developments and differences of the European and US markets, and their impact on the private credit market. We'll also cover regulatory changes like Basel III, and explore the current and future market trends.

Sergey Moiseenko, Managing Director, Credit Ratings of the US ABS group at DBRS Morningstar joins host Patrick Dolan to discuss recent trends and developments in the equipment finance sector, including the performance and credit quality of equipment ABS, M&A activity, loans vs. leasing and more. Sergey examines the evolving funding strategies for programmatic issuers in comparison to one-off issuers and the best entry methods for lessors. He also shares his thoughts on the equipment finance sector’s outlook, including the impact of increasing private credit adoption.

Leslie Sack, Director of Advocacy at the Structured Finance Association, joins host Patrick Dolan to review the latest shifts in financial regulation and leadership. Sack provides her perspective on French Hill's expected agenda as the new chair of the House Financial Services Committee, the challenges facing Caroline Crenshaw’s renomination to the SEC, and Tim Scott's priorities as the new chair of the Senate Banking Committee. We also examine the potential candidates for leading the CFPB, OCC, FDIC, and the SEC.

Alison Bisbey, Senior Writer at Green Street News, joins host Patrick Dolan to discuss the potential for increase in Federal Family Education Loan Program (FFELP) Asset-Backed Securities (ABS) issuance as prepayments rise. She explores the impact of prepayments on FFELP ABS, the factors behind them, and whether sponsors may wait for spreads to narrow. This episode also highlights the continued dialogue between insurers and bank regulators about unfunded guarantees in bank credit risk transfer (CRT) and synthetic risk transfer transactions and the concerns raised by regulators. Alison examineswhether the revised Basel III proposal will address these issues.

Greg Hertrich, Managing Director at Nomura Securities International, Inc., joins host Patrick Dolan to discuss the changing world of Synthetic Risk Transfers (SRTs) and Credit Risk Transfers (CRTs). Greg explores the potential impact of increased regulation under a Trump administration on SRTs and CRTs, and how Basel III and other regulatory changes could shape these sectors, including both current and future issuance volumes. Additionally, we look at risk profiles for different loan and asset types, such as large corporate, SME, consumer and commercial sectors.

Van Hesser, Senior Managing Director and Chief Strategist at KBRA, joins host Patrick Dolan to discuss the current state of credit markets. Van provides his perspective on how investors are interacting with the market and whether their appetite for risk has shifted.  Listen and subscribe to the Securitization Insight podcast on Apple Podcasts, Spotify, or your preferred podcast app.

Mansoor Ghori, Chief Executive Officer and Founder of Petros PACE Finance, joins host Patrick Dolan to discuss the state of the Commercial Property Assessed Clean Energy (C-PACE) financing market. Mansoor shares his insights on current trends and the unique challenges the commercial sector may face over the next five years. We also discuss the recent IRS private letter ruling in regards to C-PACE, and Mansoor provides his thoughts on the recent changes to the NYC C-PACE program.