Kroll Bond Rating Agency held a Structured Finance Investor Forum on November 7, 2013. The event was attended by more than 50 participants, which included buy and hold and total return investors representing firms with portfolio holdings across the capital stack. Opening remarks were made by Jim Nadler, President, and Jules Kroll, CEO, followed by keynote speaker Paul Volcker, former Chairman of the Federal Reserve, who addressed the attendees on the current state of the capital markets and regulation.
The Forum included two break-out sessions that offered interactive dialogue with investors. The first, focused on CMBS, was led by Kim Diamond, who heads KBRA’s Structured Finance effort. Ms. Diamond posed questions to the panelists, members of KBRA’s senior CMBS team, and the audience, to gauge their overall views on the economy and current credit conditions. The audience believed that credit spreads would tighten over the course of the next year as issuance increases to post financial crises highs, as the economy continues along at its current pace or improves. Panelists and investors agreed that credit poses the biggest risk for the CMBS market.
The RMBS breakout session, led by Senior Managing Director Glenn Costello, discussed the state of the RMBS market and REO-to-rental assets. Specific topics included recent collateral trends, Qualified Mortgages (“QM”) and the potential for non-QM transactions in 2014, reps and warranties, home prices, and single-family rental securitizations, in particular the Invitation Homes 2013-SFR1 transaction.
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