SEC-SA and the death of public securitisation
“Despite a tough couple of years on the macro front, we see from the relative abundance of non-performing loan securitisations that where the SEC-SA isn’t well calibrated relative to the inherent risk of a proposition, the capital markets can be a value-additive instrument for all parties. NPLs are not the sole area where the calibration of the SEC-SA means banks struggle – development loans, fund NAV loans and various other ‘esoterics’ fall into this camp. Just like my generation of structurers innovated with NC2.0 and arranged NPL securitisations before that was a thing, the ball is now in the court of the current crop of arrangers to create exciting new public market offerings and bring those of us who are slightly more jaded back to the table,” suggests Adam Croskery, head of debt financing and structuring at Arrow Global Group.
In SCI’s latest Talking Point column, he warns that sector-agnostic players could leave the securitisation market and pockets of liquidity will be permanently lost. As such, he calls for arrangers to help facilitate a deep and dynamic securitisation sector with new public market offerings.
Read it here.