261 Ao us ra snaemx tp lset ebpe, tiwn eTeanb lter a6n. 9c,hwe se or er pi gei anta tt ehde abnyafl ryesqi suoe fn Tt aobrlieg i6n. a8t ob rust, ncoowl u mw ne ss p( 1l i )t and (2), and those originated by infrequent originators, columns (3) and (4). We find some remarkable results. Only for frequent originators, investors seem to adjust their pricing for the different risk retention methods. In column (2), we show that investors lower their spread, with a coefficient of -45.91 (t-stat= -t 3r a. 0n0c )h, ews hweint ht ht he et rVaEnSc hme ertehtoa di ntehraht aa sr ea pi sps lui ee dd tbhye aVfEr eS qmu ee tnht oodr .i gTihnias t ionrdri ec ca et ei vs et ,hoant average, a 45.91 basis points lower issuance spread than tranches with the FLT mO Be St hmo de tthhoadt ,awr ehiesrseu ei ndvbe ys tforresq rueednut coer itghieniar t iosrssu. aWnec ef i snpdrceoands, iws tiet hn tar ceos ue fl tf iscfi oe rn tt hoef -34.23 (t-stat= -3.28), compared to the FLT method. Consistent with Table 6.8, wt r ae nf icnhde sn oo rsiigginniaf itceadn bt yr eisnuf lrtesqfuoer nt ht eo rFiLg Ei nma teotrhso, dc o. Il nu mt e rness (t i3n)g al yn, di f (w4e) , mwoev ef i nt od t nh oe significant results at all for our risk retention method variables. This suggests tr hi sakt ri entveensttioorns md oe t hn oo dt sa dwj hu es tn tthheei rt rsapnrcehaed oarti giisnsautaonr cies fsomr aal lneyr ionf ttehremds i fof ef rsei znet (measured by the number of tranches). Ians se uq mu a, lwl yer if si nk dy. tWh aet f ii nn vdetsht ao tr st adkoi nngoitnvt oa l aucec tohuen dt itfhf eerreantti nrgi ssk, srpert ee andt iso sne me me t thoo bd es ha ri ge hsei gs nt if foi rc aFnLtTl ,y gni ve eg na tti hv ea .t Tf ohri sVrEe Ss ualnt di s Oi nB lSi n( ea nwdi ti hn opua rr tesx fpoercFt aLtEi o) nt hs .eTchoee lf of iscsi eanntds return profile of the OBS and VES method seem to (mathematically) best align tshe ee mi n tt oe rbees tabc he ti ewveeedn f ot hr et hr ee tFaLi nTemr ae nt hdo idn v( Sees ct ot iro on v6e.r2 .t3i ma ne ,dwAhpi pl ee nl edaisxt Ia) .l iIgt nmmi eg nh tt wt heelilr bi nev et hs tamt ei nn vt ecshtooircse so, bt as ek rev ii nn tgo tahcec oausns ti gtnheedo nc r ae vdei tr argaet ibnegtst ebr erfaotrien gmoaf kFi nLTg transactions (see Table 6.5) and compensate for the additional risks that come with the FLT method (e.g., sufficient portfolio management over time). While Chapter 6 - Risk Retention in the European Securitization Market
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