Another Fine Mezz

First up our new hire, Tom Hall, gets into the weeds of what to expect in UK prime RMBS this year. Meanwhile, George Smith gets stuck into the surge of CLO ETFs in Europe and whether their impact will match up to how they have change the market in America. Tom is making his Another Fine Mezz debut this week, to cap a flying start to life at GlobalCapital. There’s lots more to come from both of Tom and George, so connect with Tom on LinkedIn or send him an email and get him to buy you a coffee.

European ABS reporter George Smith and freelance CLO reporter Victoria Thiele discuss whether 2025 can live up to a stellar 2024. Both discuss the features they wrote for GlobalCapital’s review of the year (ABS here and CLOs here).In CLOs, there might be a bit more of an ebb and flow to issuance next year, but expectations are for another strong year of supply, with a quick start in January. The European middle market CLO market could also take off, after Barings priced the first deal earlier this year.There is a similar optimism in ABS, with new issuers, new asset classes and heavy supply expected. Data centres are one standout area where growth is expected, while bank supply is also likely to continue to increase.Optimism abounds, but risks do remain particularly because of macro uncertainty. This is the final episode of Another Fine Mezz for the year, but the show will return to cover how 2025 unfolds with regular episodes in January.

For the final episode of the Another Fine Mezz SRT Series, former securitization editor Tom Lemmon was joined by Natascha Winberg, MUFG’s head of financial institutions for Germany, Austria and Switzerland.They discuss what the next decade will look like for the SRT market, with regulators likely to push for more transparency. The investor base may also continue to grow, particularly as banks use more ESG assets to access impact funds.Natascha highlights the importance of third party arrangership for smaller issuers and debut issuers, or in deals with more unusual assets, like project finance, infrastructure, CRE or fund finance.In the second half of the show, they reflect on Natascha’s career so far and discuss how the perception of bankers has changed since the GFC and how to manage the challenges of being a working parent. Finally, for anyone just starting out in the market today, Natascha emphasises the importance of learning, being curious and asking questions.

In the latest installment of GlobalCapital's SRT podcast series, host George Smith was joined by Georgi Stoev and Thomas Lupbrand from the European Investment Fund.The guests explored the unique role of the EIF in the SRT market, as well as reflecting on their careers to date. The pair discuss how the EIF has been instrumental in expanding the SRT market into new jurisdictions, by leveraging preexisting relationships with issuers.Georgi and Thomas also explain how, in a time of abundant liquidity, taking a more junior position in the capital structure helps the EIF achieve maximum impact for its money and produces several times more lending than its initial investment.Finally they discuss how they got into structured finance, what appeals about working at the EIF and the importance maintaining a long term view.

For a special episode of Another Fine Mezz this week, GlobalCapital’s senior securitization reporter George Smith was joined by Dipesh Mehta, Funding Circle’s chief capital officer.Funding Circle is one of limited number of issuers offering European ABS investors the opportunity to get SME exposure. Of late however, with regulators making the right noises and with more issuers bringing different types of deals online, the SME ABS market is deepening.Mehta was keen to see that continue, to bring more points of comparison and more liquidity to the market. He also said Funding Circle was keen to keep its public issuance going, with eight deals so far, the latest in May 2024.In the second half of the show, Mehta reflected on his career so far. He shared his memories of a dramatic moment during the GFC, when the entire Barclays trading fell silent. He also discussed the experience of going through the upheaval of the pandemic working in SME lending.Another Fine Mezz will be back with more special episodes before Christmas, including more from the SRT series, before the regular weekly episodes resume in January.

GlobalCapital's securitization podcasting trio reunite for one last episode. Former CLO reporter, now freelancer, Victoria Thiele is back on the show, but host Tom Lemmon said goodbye. George Smith meanwhile remains in post, stoic as ever. He attended DealCatalyst's ABSF conference in London on November 25 and shared his take on the big themes under discussion.There was also exciting news in the CLO market. Barings won the race for Europe's first middle market deal. Victoria explained the many challenges of getting the deal away.In ABS, 2024 has produced a bumper crop of ESG issuance. For a sector of the market that has seen a few false dawns, Tom explained why the boost in supply will hopefully be permanent this time.

With a host of special guests dominating the Another Fine Mezz podcast in recent weeks, this week's normal episode with host Tom Lemmon and European ABS reporter, George Smith, felt almost unusual. As was long-predicted, European securitization markets have been fairly quiet since Donald Trump's second election victory on November 5. However, a ruling by the UK Court of Appeal on motor finance meant there was plenty to chew over. The ruling found unexpectedly in the favour of the consumer and is broader than first considered by many auto ABS market participants. As a result, it brings into question whether UK auto ABS deals that are still outstanding and upcoming transactions could now be hit by a wave of claims from consumers that they were mis-sold car finance. There is still so much that's unclear with appeals to the Supreme Court expected, but there are now genuine fears that this could lead to even bigger total compensation than the Payment Protection Insurance (PPI) scandal of the early 2000's. (And therefore, a new decade of no-win-no-fee lawyer adverts).Meanwhile, George also took a closer look at how UK banks are looking to manage their regulatory capital, particularly their mortgage portfolios, through securitization. 

This week on Another Fine Mezz, host Tom Lemmon welcomed Alantra's SRT specialist, senior advisor, Jeremy Hermant as the third guest in the SRT Series. Hermant discussed the increasing role of arranging banks in SRT transactions as the market increasingly opens itself up to smaller banks who need to efficiently manage their capital requirements. In addition, Hermant spoke about the regulatory changes in the UK making SRT more competitive, and explained why regulators are encouraging SRT as the capital management tool of choice. He also spoke about his own, varied career, having begun as an equity derivatives trader before moving into the precursor to SRT, then known as private debt mobilisation. All this occurred while Hermant was at Santander, learning and developing under the watchful of eye of Steve Gandy, the former Santander stalwart of securitization and 2024 winner of GlobalCapital's Lifetime Achievement Award for European Securitization.Hermant also discussed how the industry has changed for the better, with offices reflecting society more broadly now, as opposed to looking (and smelling) like a men's locker-room. Finally, Alantra's senior advisor explained why particularly in European securitization, building positive relationships based on kindness is key to success. 

There was only one place to start this week's episode of Another Fine Mezz after Enpal's stunning debut solar ABS, the first of its kind in Europe.European ABS reporter, George Smith, explained why the deal from Germany's largest renewable energy provider had such strong demand, although both he and host, Tom Lemmon questioned whether the deal would see a host of others following in the its footsteps. Golden Ray 1 has clearly shown that things like solar ABS can be sold in the European securitization market, but it has also revealed just how difficult it can be to reach the required scale. Away from Enpal, there is the small matter of the US presidential election. Recording took place before Donald Trump's historic victory but with the dust still settling, signs of life in the pipeline are not yet apparent.

This week on Another Fine Mezz, host Tom Lemmon sat down with Man Group's, co-head of credit risk sharing, Matthew Moniot for the second episode of GlobalCapital's SRT Series. Moniot explained how the world of risk sharing has changed since he first started dealing with "SRT-like" products in the late 90's. And now, senior leaders within banks have recognised that it's not just a regulation-driven product, but a key part of their toolkit when looking at efficiency. In the last 12 months, the market has become more competitive and more transactional, Moniot said. But that isn't necessarily good for the long-term health of the market. In the second half of the episode, Moniot looked back on his career in finance, why he enjoys being on the buy-side, and why he calls himself "the last fiduciary in the world". Finally, Moniot reflected on his relatively new role at Man Group, and life in London.