Repsol Completes Massive Issue Of “Green Bonds”

Spanish oil giant Repsol completed the issue of $559 million in five-year green bonds on Tuesday, making it the first fossil fuel company of its size to benefit from environmentally friendly financing. “The energy industry is a big source of emissions globally,” Repsol spokesperson Kristian Rix told Bloomberg. “If we can make investments in efficiency and do better business, then we’re actually doing this transition in a way that is not only sustainable environmentally, but is also sustainable economically.” The capital…

EIB Governors welcome the EU Bank’s support for investment in Europe

In 2016 the EIB Group provided funding totalling over EUR 83.8 billion to support investment across Europe and around the world. This will help finance projects worth around 280 billion euro. The European Investment Bank (EIB) expects 2017 to be another strong year, building on its robust performance in 2016. The Board of Governors welcomed EIB´s role in strengthening competitiveness and boosting growth and jobs and approved the bank’s accounts for last year.

EIB Governors welcome the EU Bank’s support for investment in Europe

In 2016 the EIB Group provided funding totalling over EUR 83.8 billion to support investment across Europe and around the world. This will help finance projects worth around 280 billion euro. The European Investment Bank (EIB) expects 2017 to be another strong year, building on its robust performance in 2016. The Board of Governors welcomed EIB´s role in strengthening competitiveness and boosting growth and jobs and approved the bank’s accounts for last year.

Biggest Subprime Auto Lender Skipped Income Verification On 92% Of Auto Loans

We first introduced readers to the “New Century of auto finance” (aka “Santander Consumer USA”) several years ago when we first took note of their aggressive auto ABS facilities.  In fact, here is a quick look at one of their ABS deals from 2015 which sported an average FICO of 595, LTV of 110%, APR of 16.2% and a term of 70 months. 

Santander is the largest subprime auto lender in the country with more than $15 billion in outstanding loans to underqualified buyers. Not surprisingly, the company also dominates the subprime auto ABS space accounting for a disproportionate share of YTD issuance. We noted that Santander’s first deal of 2015 (SDART 2015-1) carried an average FICO of 595, an average APR of 16.20%, and an average term of 70 months…

 

 

And if that isn’t enough evidence to convince you that today’s auto sales are nothing more than another subprime, debt-fueled bubble then perhaps you should also take note of today’s Bloomberg article that highlights the fact that Santander USA apparently only took the time to verify income on roughly 8% of the loans they subsequently dumped into ABS facilities and sold off pension and insurance companies. 

Santander Consumer USA Holdings Inc., one of the biggest subprime auto finance companies, verified income on just 8 percent of borrowers whose loans it recently bundled into bonds, according to Moody’s Investors Service.

 

The low level of due diligence on applicants compares with 64 percent for loans in a recent securitization sold by General Motors Financial Co.’s AmeriCredit unit. The lack of checks may be one factor in explaining higher loan losses experienced by Santander Consumer in bond deals that it has sold in recent years, Moody’s analysts Jody Shenn and Nick Monzillo wrote in a May 17 report, which reviewed data required of asset-backed bond issuers that’s recently been made available.

 

Limited verification of loan applicants’ stated incomes and employment “creates more uncertainty around whether borrowers will be able to afford their monthly payments, which becomes particularly important if they have poor credit records and risky loan terms,” the analysts wrote.

Andrew Kang, Santander Consumer’s treasurer, acknowledged the minimal level of income verification and said the company’s practice has been consistent over time even if it’s lower than levels reported among competitors.

Meanwhile, as we pointed out last week (see “UBS Hints At Rampant Auto Lending Fraud; ‘It’s Not Just Smoke And Mirrors Anymore’“), this news comes just as there is growing concern among auto ABS investors that consumers, auto dealers and/or banks have been going beyond simply relaxing underwriting standards and have instead been forced to commit outright fraud in order to attract that incremental auto volume growth.  As UBS Strategist Matthew Mish told Bloomberg, “something is definitely going on under the hood…it’s not just smoke and mirrors anymore.”

The evidence is growing. First, the explosion of technology makes gaining access to information to improve credit scores very simple. Internet searches for ‘credit score’ are at record levels. Second, our survey finds 21% of auto loan borrowers admitted to some form of inaccuracy in their loan applications. Third, there is growing concern reported among auto lenders around fraud, which is the extreme case of this behavior.

 

Overall, the explosion and adoption of technology makes gaining access to “proven” methods for improving credit scores extremely simple. To this point, the popularity of internet searches for “credit score” has been rising consistently and is near peak post-crisis levels (Figure 7). Similarly, our survey finds that 21% of auto loan borrowers admitted to some inaccuracy in their application for non-mortgage related debt (auto, student or credit card loan). More concerning, this trend may be systemic as 29% of other consumer loan (i.e., student loan, credit card) borrowers acknowledged some form of inaccuracy in their applications (Figure 8).

Auto

 

All of which helps explain those surging delinquencies….

Subprime

 

…and loss severities in ABS structures…

Subprime

 

…and what increasingly seems to be a long-term trend in SC’s stock.

Santander

 

All great signs of a “plateau.”

The post Biggest Subprime Auto Lender Skipped Income Verification On 92% Of Auto Loans appeared first on crude-oil.news.

US-China economic cooperation plan includes LNG provision

A provision in a new economic cooperation agreement with China
clarified its status as an importer of US LNG that does not have a
free-trade agreement with the US. The provision in the May 11 US-China Economic Cooperation 100-Day Plan
stated that China would be treated “no less favorably than other
non-FTA trade partners with regard to LNG export authorizations.”

John Podesta Unloads On “Absolutely Crazy, Unfit” Trump

John Podesta, Hillary’s former campaign manager and the target of one of the most devastating/embarrassing political email leaks of all time, sat down with Politico for a one-hour interview which served primarily to confirm that he’s still a sore loser who has simply not come to terms with the fact that he backed a flawed candidate in 2016.

One of the many topics covered was Trump’s recent firing of Jim Comey.  On this issue, Podesta seems to be in the ‘Comey was completely incompetent but Trump shouldn’t have fired him’ camp…which is a position that seemingly only makes sense to John Podesta and Maxine Waters.  Per Politico:

“It’s laughable, really laughable that Donald Trump would fire Jim Comey because of his interference which damaged Hillary Clinton. I mean, it was laughable from the very beginning,” Podesta says. “Just a complete misreading of reality.”

 

Like Clinton, Podesta remains adamant that Comey’s late intervention in last year’s campaign—he reopened the closed probe of Clinton’s private email server just 11 days before the voting—likely cost her the presidency. But he thinks Trump mistook their criticism of Comey for a blank check to fire the director amid the current Trump-related probe. “I still think what Jim Comey did last fall was wrong,” Podesta says, “but he shouldn’t have been fired, given the circumstances that he was leading this investigation.”

Of course, attributes like ‘consistency’ and ‘logic’ are seemingly not held in high regard by Podesta.  Take the following two tweets sent within 7 hours of each other by Podesta on May 9th.  The first tweet blasts Comey for his apparent incompetence…

The American public is getting mildly nauseous listening to Jim Comey https://t.co/fiE9zaT0x0

— John Podesta (@johnpodesta) May 9, 2017

 

…and the next, less than 7 hours later, defends him against his wrongful termination.

@realDonaldTrump Didn’t you know you’re supposed to wait til Saturday night to massacre people investigating you? https://t.co/dQpgWsR6ND

— John Podesta (@johnpodesta) May 9, 2017

 

Meanwhile, even Podesta admits that calls for Trump’s impeachment are far-fetched saying that the firing of Comey was “close to an obstruction case,” though not quite.

Ultimately it’s Trump’s fault and not the staff’s, Podesta says, arguing the last couple weeks have proven that Trump is “incapable of doing the job.” Podesta says he believes the new revelations, with Trump linking the firing to the Russia case, amount to “close to an obstruction case, either in the political context of impeachment, or in the context of a criminal grand jury investigation to indict somebody for obstruction.”

But even though he’s not necessarily impeachable, Podesta would like for you to know that Trump is “absolutely crazy” and “unfit for office.”  Frankly, we’re ‘shocked’ he feels that way.

Donald Trump is “unfit for office,” a president whose actions are often “absolutely crazy” and whose White House has “a complete disregard for the truth.” His firing of James Comey as the FBI director was overseeing an investigation of Russian interference in the 2016 campaign and whether Trump’s advisers colluded with it amounts to “close to an obstruction case” against the president.

 

“The problem in the Trump White House is they have no one who really stands up to him,” Podesta says. “He’s impetuous, he’s impulsive, he fires things off and if anything, they enable him rather than trying to contain what are moves that in any other context would seem, you know, absolutely crazy. … If they’re going to try to right this place and be able to be effective, I think they need a much stronger team who can resist his impulses and tell him that he’s wrong.”

 

“It’s hard to imagine how this keeps going for an entire presidential term,” Podesta replied, noting that unlike Nixon, Trump benefits from the protective cocoon of a Republican Congress. “Right now, there’s nothing that compels him to leave. So, we’ll just, you know, it’ll unfold as it unfolds. But every day, there’s kind of new fodder for thinking that he can’t do this job.”

You can listen to the full interview here:

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