Excess Spread — Take the bull by the horns, the risk nobody wants?


Market Wrap

Excess Spread — Take the bull by the horns, the risk nobody wants?

Owen Sanderson's avatar
  1. Owen Sanderson
11 min read

Take the bull by the horns

The Gedesco saga isn’t over, but some of the loose ends are starting to be tied up. The class A note in Gedesco Trade Receivables 2020-1 repaid at the January payment date (securitisation works!) though the rest of the capital stack is triple-C rated and replete with defaults.

Now it is over to backup servicer Copernicus, with noteholders approving a result to waive some of the servicer transition provisions and allow the backup to step up straight away. Perhaps Copernicus, as an entity whose management is not embroiled in a multi-jurisdictional fight for control, will be able to find some value in the portfolio and get some of the factoring transactions current again.

The extensive legal docket keeps extending, though next week brings a New York hearing which will rule on a Motion to Discontinue and a Motion to Amend in the case over promissory notes — so I guess the Motion to Discontinue could signal peace ahead?

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