Securitization Insight

On Tuesday, February 8, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) received favorable court rulings in cases challenging their so-called “valid when made” rules. The plaintiffs in each case were the attorneys general of California, Illinois and New York. The plaintiffs claimed that each rulemaking (1) exceeded their authority, (2) were arbitrary and capricious, and (3) violated federal rulemaking standards.

In this episode of Securitization Insight, Jen Earyes, head of policy at the Structured Finance Association, joins Patrick Dolan to discuss the details of the OCC and FDIC rules at the center of this litigation, and how the court ruled on the plaintiffs’ claims in the cases against the OCC and the FDIC. They also discuss what these rulings mean for other “valid when made” litigation and for the securitization industry, and more.

Patrick Belica, Managing Director of S L Capital Strategies, joins our host Patrick Dolan to discuss student loan securitization, including current and emerging trends in this space. They explore student loan securitization volume, structural nuances between the various student loan sub-asset classes (FFELP, private in-school loan and private refinancing loan), and the conversion of the “income share agreement loan” to the “income-based repayment loan”. They also discuss LIBOR transition for legacy LIBOR student loan securitizations, and what to expect from the CFPB in the student loan space in 2022.

In this episode, our host Patrick Dolan talks to David Meneret, Founder and Chief Investment Officer (CIO) of Mill Hill Capital about the aviation asset-backed securitization (ABS) market. The discussion covers recent market trends and factors to consider when evaluating an aircraft lease portfolio securitization or an enhanced equipment trust certificates (EETC) securitization. They also touch on environmental, social and governance (ESG) considerations and green bonds in the aviation space, as well as hybrid transactions that involve aspects of EETC deals and portfolio lease securitization deals.

In this episode, our host Patrick Dolan talks to Meredith Coffey, Executive Vice President of the Loan Syndications and Trading Association (LSTA), who runs the Research Department and co-heads the LSTA’s regulatory and CLO efforts. The discussion touches on why leveraged loans and Collateralized Loan Obligations (CLOs) are still being syndicated on LIBOR, whether Secured Overnight Financing Rate (SOFR) will become the only replacement rate and how it behaves. They also discuss the pricing mechanics of SOFR loans and CLOs including the future of Credit Spread Adjustments (CSAs), why you might need a Chicago Mercantile Exchange (CME) Term SOFR license and what will happen when LIBOR ends.

Greg Saunders, CFO of Ygrene Energy Fund, joins us to discuss PACE financing and what asset-backed securities (ABS) investors like about the asset class, how Ygrene differentiates itself from competitors, how he foresees the PACE market changing in the coming months and years, given the increased focus on clean energy from the White House, what is really going to create scale in the PACE asset class, and how environmental, social and governance (ESG) plays into securitization.

Jonah Lansky, co-founder and deputy CIO of Varadero Capital, joins us to discuss investing in commercial real estate collateralized loan obligations (CRE CLOs) and commercial mortgage-backed securities (CMBS), as well as the considerations in deciding to lend to a specialty finance lender in the consumer or business marketplace lending space. Jonah will also share his thoughts on , some of the potential issues regarding the “buy now pay later” (BNPL) receivables asset class from an investor’s perspective, and his thoughts regarding housing price inflation.

Brian Foley, Managing Director of Warehouse Finance for SVB, joins us to discuss how warehouse facilities fit into a typical fintech's capital stack, what types of fintech originators, life-stage wise, need warehouse funding, how a warehouse is different from a securitization, the most common regulatory hurdles consumer fintechs face and other non-credit risks to focus on as a lender.

Lain Gutierrez, CEO of CleanFund Commercial PACE Capital, Inc., joins us to discuss national commercial PACE trends. We discuss new developments in the world of commercial PACE, the implication for securitizations with these larger deals, and new trends in the ABS market for CPACE.

Adrian Katz, CEO, President and founder of Finacity Corporation, joins us to discuss his company, the impact of challenged and elongated supply chains due to COVID on trade finance, the impact of increasing inflation and potentially higher interest rates in the future on trade finance, trends and changes Finacity has encountered across different industries that are worth noting and how technology is changing the landscape of trade finance.

Peter Erwin, Associate Director of NYCEEC, joins us to discuss commercial PACE (C-PACE) and some of the barriers that may have delayed launching the program. We discuss incentives to use C-PACE, the similarities and differences in the eligibility requirements for projects in New York City versus other jurisdictions, and the most significant closing costs associated with PACE financings and how the city has tried to minimize these closing costs. Erwin shares the lessons NYCEEC has learned from the first few closed transactions that will inform program design elements going forward, the priorities for NYCEEC and the city in administering this program over the next six to twelve months and any potential changes that may happen under Mayor-Elect Adams.