Asset Securitization Report articles from April 2004

Asset Securitization Report archives from April 2004

Whispers.
April 5, 2004... Securitization veteran Ed Grant joined HSBC last week as a senior vice president in the asset-backed commercial paper group. In his new position he reports to global securitization chief Jon Bottorff. Grant had worked for ING. ABS trader...

MH sector rattles with life, as secondary market heats up.
April 5, 2004... With the slowdown in new issue ABS supply ahead of quarter-end, secondary trading - particularly for higher-yielding alternatives - picked up significantly last week. At least one bid list per day circulated from both smart-money profit takers...

Lehman leaps but Citi leads.
April 5, 2004... While Citigroup Global Markets maintained its first quarter lead in the ABS league tables, two through five was tossed like a salad in the busy final week of the quarter, according to numbers officially released by Thomson Financial (see full...

KFB marks Korean crossborder return.
April 5, 2004... Despite President Roh Moo-hyun's impeachment, Korea First Bank (KFB) overcame investor concerns to complete South Korea's first public cross-border securitization since Samsung Life's $299.6 million MBS in December 2002. UBS Warburg acted...

FASB leans toward fair value for beneficial interests.
April 5, 2004... The Financial Accounting Standards Board is exploring fair market valuation for both retained and purchased beneficial interests in securitizations. The notion was discussed in last week's session on the application of FAS 133 to...

Is Freedom the future?
April 5, 2004... The recently launched Freedom Park conduit makes use of just about every bell and whistle available to the ABCP market. According to Promontory Group, the parent company of Freedom's administrator, the vehicle is structured to address today's...

Debate ensues over CDO equity returns: are researchers being pressured?
April 5, 2004... The public markets' equity researchers may garner more television appearances, but there's no shortage of commentary swirling from fixed-income CDO think tanks. Equity tranches within CDOs are the new hot topic for the CDO market, as one bank's...

Mellon plans the year's first insurance premium deal.
April 5, 2004... Mellon Bank is gearing up to issue its fourth transaction backed by insurance premium finance loans originated by its AFCO subsidiary, according to an S-1 filing with the Securities and Exchange Commission. Mellon issued its first insurance...

After flurry, market slows to $6.7 billion.
April 5, 2004... After the heaviest quarter the U.S. ABS market has ever seen, players loosened their belts last week for a collective breather. With more than $175 billion of new issue supply pricing during the first three months - an average of $13.5 billion...

Interest-only loans enter subprime.
April 5, 2004... The interest-only loan - a product that used to be the exclusive province of prime borrowers and wealthy homeowners looking to manage their finances - has begun to make inroads in the subprime market, according to a recent report from UBS. ...

DebtX plants feet in German bank loan market.
April 5, 2004... Many U.S. loan market players have been paying more attention to the European loan market over recent months. This is because yield-hungry U.S. loan investors - who are trying to find alternative outlets for investment due to the scanty new...

Backup dampens refis, but expect faster short-term prepays.
April 5, 2004... The Mortgage Bankers Associ-ation (MBA) reported that for the week ending March 26, the Refinancing Index dropped 2.6% to 4857.6 versus 4988.7 the prior week. The drop reflects the rise in mortgage rates week over week. The marginal drop...

Senate bill on GSEs passes first hurdle.
April 5, 2004... Last Thursday afternoon the Senate Banking Committee narrowly approved a bill that strengthens regulation of Freddie Mac and Fannie Mae, further putting into question the fate of the GSEs. This was largely based on an earlier draft legislation...

Credit trends in commercial mortgage loans.
April 5, 2004... Abridged from "An Update of the Credit Profile of Standard & Poor's Rated U.S. Commercial Mortgage Loans" For the credit performance of commercial mortgage loans, 2003 was the most stressful year since the early 1990s. It witnessed a sharp...

Like a broken record, UBS tops the RMBS tables once again.
April 5, 2004... UBS, a perennial first placer, has done it again. The firm topped the manager activity rankings for both agency and non-agency MBS, according to the final results from Thomson Financial's league tables for the first quarter of 2004. This...

Off record quarter, 2Q04 CMBS deal talk heats up.
April 5, 2004... Just a few days into the second quarter, the CMBS pipeline has apparently hit the front burner. There is $10 billion in fixed-rate issuance currently planned for the quarter, and the way things are shaping up, it looks like it may all get done....

Freddie's revised MultiLender program to improve liquidity.
April 5, 2004... Changes to Freddie Mac's MultiLender swap program should create larger, more predictable and liquid Gold pools, researchers said last week. "A number of investors are reluctant to buy Golds (or will only buy Golds at a significant yield...

Upgrades for seasoned CMBS conduits.
April 5, 2004... Conduit CMBS transactions issued between 1995 and 1999 with sequential pay structures are the most likely to receive positive perspectives and future upgrades, Fitch Ratings told investors during a conference call. In recent weeks, Fitch...

Hot on CSFB's tail, Deutsche in Mexico enters new asset class.
April 5, 2004... Before the ink on a rival prospectus could dry, Deutsche Bank Securities registered with Mexican regulators a US$250 million shelf for local deals backed by foreign bonds. This follows a similar registration by Credit Suisse First Boston and...

Tobacco prices in Argentina, dried fruit up next.
April 5, 2004... Argentina's Cooperativa de Tabacaleros de Jujuy (CTJ) is now known for something other than churning out smokes, at least among investors. The tobacco processor priced a US$12.4 million, one-year bond at 6.75%. Fitch Ratings gave the export...

New investors continue crunching spreads.
April 5, 2004... First quarter issuance topped the 61 billion (US$75 billion) level, though the mountain of new issues has had little impact on the tightening bias that took hold this quarter. Things cooled down last week as the market visited Geneva en masse,...

European pros await D-Day'.
April 5, 2004... GENEVA - While the European market enjoys its most active year, accounting and regulatory concerns still blur the horizon. The European Securitisation Forum kicked off its 2004 ABS Summit with many of the themes that have stolen the show over...

Whispers.
April 12, 2004... Moody's Investors Service has reorganized its CDO and derivatives group, which will still be led by group Managing Director Noel Kirnon. Gus Harris, managing director, is heading up CDO service, monitoring and SME CDOs; Gary Witt, managing...

New issue CDOs priced at a furious clip, with the pipeline replenishing.(collateralised debt obligation)
April 12, 2004... A flurry of CDOs priced during the last few days of March and the first few days of April, for about $9.5 billion in proceeds in a single Monday-to-Friday period - a tally that includes one rather massive euro-denominated deal. Still, who...

1Q04 LatAm wrap: Mexico leaves Cross-border in the dust.
April 12, 2004... The trend shift of Latin American securitization activity from international issuance to Brazil and Mexico's local markets was amplified in the first quarter when only one originator dropped into the cross-border market. The ramp-up in Mexico...

Searching for value in aircraft ABS...(asset backed securities)
April 12, 2004... The aircraft sector of the ABS market is still grasping at straws when it comes to mapping out its future and deciding on what changes should be implemented, panelists said at a recent gathering hosted by UBS. As a result, differences in...

SEC looking to bulk up pro sups.(Securities and Exchange Commission)
April 12, 2004... A proposal from the Securities and Exchange Commission designed to increase transparency for ABS investors could require issuers to include static pool statistics in prospectuses, which had generally been deemed unnecessary. The regulator...

FDIC recognizes impact of securitization on credit market.(Federal Deposit Insurance Corp)(Brief Article)
April 12, 2004... An economist at the Federal Deposit Insurance Corp. released a study on the evolution of the banking industry post-WWII acknowledging the significant role securitization and the credit markets have played in dramatically reshaping commercial...

Metris sets first credit card ABS since 02.(asset backed securities)
April 12, 2004... The Metris Companies returns to the ABS primary market this week with a $200 million, three-year MBIA-wrapped series 2004-1, led by Banc of America Securities and Deutsche Bank Securities. This is another positive step for the issuer following...

Holiday slowed ABS trading sees $9.25 billion.
April 12, 2004... The U.S. ABS primary market sprinted to a holiday dampened $9.25 billion of new-issue supply, the overwhelming majority of which - $7.5 billion - came in the home equity sector. While the credit card sector did enjoy an active week of new...

Panel looks to future of aircraft ABS.(asset backed securities)
April 12, 2004... The aircraft finance industry, in a rut unlike any seen in the last 10 years, needs more than structural changes to right itself, according to U.S. regional airlines equity analyst Robert Ashcroft, a director at UBS, offering his conference...

Aircraft rating methodology the same, assumptions change.
April 12, 2004... While ratings methodology has remained the same for aircraft-lease ABS, all three rating agencies have altered their underlying assumptions, panelists said at UBS' Opportunities in Structured Aircraft Debt conference. Assumptions that have been...

The five most visible and liquid aircraft lease ABS are all very similar in nature, but offer differing levels of value, according to Gus Kelly, senior vice president of debis AirFinance. Each of the five selected transactions were issued prior to Sept. 11, 2001, near or above one billion dollars in size and had similar loan-to-value ratios - approximately 90% - upon pricing.(asset backed securities)(Brief Article)
April 12, 2004... Another similarity of these deals is that each has experienced ratings downgrades in the two-and-a-half years since the terrorist attacks. EAST was cited as the worst performer, with Airplanes Passthrough Trust and Aircraft Finance Trust close...

DVI offers update in investor call.(Brief Article)
April 12, 2004... Former triple-As downgraded to junk... Despite the declining portfolio performance and recent wave of downgrades in DVI Inc. medical-equipment lease ABS, new servicer U.S. Bank Portfolio Services tried to quell investor concerns during a...

Fitch sees CDOs Using MTNs.(collateralised debt obligations)
April 12, 2004... In its new bi-weekly market wrap called CDOpinions, Fitch Ratings notes that some CDO issuers are exploring funding in the MTN market. While it's been limited so far, the use of MTNs has become another option for issuers. "Anything that...

CLOs chasing yield, purchasing second lien bank loans.(collateralised loan obligation)
April 12, 2004... Second lien bank loans have been more frequently appearing in new CLOs, especially as managers look for higher yielding collateral during this period of historic tights. Second liens offer between 200 and 500 basis points of pickup over...

Widening on recent Treasury selloff draws strong buying.
April 12, 2004... Following the March employment report - and continuing through most of Monday's trading session - mortgages were hit pretty hard on the rate backup with heavy originator selling, profit-taking and sidelined buyers. The widening, however, drew...

The inevitable impact of the deluge in ARMs.(Adjustable Rate Mortgage )
April 12, 2004... The significant growth in the ARM share in mortgage production has a tremendous impact on all sectors in the market. In a recent report, Countrywide Securities Corp. explores this subject by looking at some recent production data. ARMs...

Analysts duke it out over MBS supply outlook JPMorgan takes issue with other researchers.(mortgage backed securities)
April 12, 2004... The debate on MBS supply going forward heated up last week, following the dramatic change in market conditions. Lehman Brothers remains nervous about net issuance over the coming months. "The magnitude of the supply is a purchase market...

Taishin completes latest Taiwanese MBS.(mortgage-backed securitization)
April 12, 2004... Taishin International Bank has completed Taiwan's second mortgage-backed securitization, a NT$4.4 billion (US$131 million) issue arranged by Citigroup Global Markets with Taiwan Securities and E-Sun Securities co-managers. The three-tranche...

Outlook remains positive as European market flow slows.
April 12, 2004... There was little variation in the pricing scenario last week, as both the European primary and secondary ABS markets quieted down. Spreads held firm and market sources expect activity to resume on the same note after the break. The market...

European Investors look for more CMBS disclosure.(commercial mortgage backed securities)
April 12, 2004... Although European lenders are moving toward harmonizing CMBS reporting standards, a further breakdown of the variations dictated by different jurisdictions is still needed before the market reaches U.S. reporting clarity, investors said at the...

Whispers.
April 19, 2004... ABS buyside veteran Dennis Kraft has resurfaced as head of consumer ABS research at Wachovia Securities, reporting to Brian Lancaster, head of structured-finance research. In his new role Kraft will cover the auto loan, credit card, home...

ABS an "opiate" for DVI: Convoluted financial relationships and "double-pledging" alleged.(asset-backed securities)
April 19, 2004... ABS investors in DVI Inc. may face their worst fears, as allegations of significant instances of fraud have surfaced. Independent examiner R. Todd Neilson, a CPA and partner at Neilson Elggren LLP, alleges that DVI executives knowingly...

Mexican RMBS entices IDB.(Inter-American Development Bank )(Hipotecaria Nacional)(Residential Mortgage-Backed Securities)
April 19, 2004... Yet another global player has succumbed to the charms of Mexico's RMBS market. The Inter-American Development Bank (IDB) is in talks to provide a liquidity facility for a deal originated by housing finance company Hipotecaria Nacional,...

ICBC launches China NPL deal.
April 19, 2004... Industrial and Commercial Bank of China (ICBC), the largest commercial bank in the People's Republic, last week launched a securitization backed by non-performing and sub-performing loans (NPLs) with a book value of Rmb2.6 billion (US$314...

CMET closing second trading desk deal.(Capital Markets Engineering and Trading)
April 19, 2004... Capital Markets Engineering and Trading (CMET) expects to close its second transaction this week, a $200 million CLO-like hybrid called South Street Securities, which establishes a $15 billion repo trading desk for the benefit of Daiwa...

OCC: New reputation risk guidance imminent.(Office of the Comptroller of the Currency)
April 19, 2004... Regulators are focusing on reputation and legal risk as they prepare to issue guidance seeking to bolster financial institutions' controls and risk management systems that relate to complex structured transactions. Those transactions,...

Not even in a footnote Everyone is talking about Parmalat and Eureka, except Citigroup.
April 19, 2004... Little is known about the fate of the equity buyers in Eureka Securitization - though, through non-confirmable market buzz, it appears the Parmalat receivables have been written down to some extent, and that Citigroup Inc. does not intend to...

Slow market spells spill over this week.
April 19, 2004... For the second consecutive week the U.S. ABS primary market was sluggish and transactions marketed throughout the week looked as though they may be held over to this week. Total supply offered was $12.2 billion, but just $6.9 billion had priced...

Financial Pacific preparing IPO.(Financial Pacific Leasing)
April 19, 2004... Financial Pacific Leasing, the small-ticket leasing company that brought its lone term securitization to market last July, is preparing for an $80.5 million IPO, according to an S-1 filing submitted to the Securities and Exchange Commission on...

Insurers turn to TruPS CDOs.
April 19, 2004... Insurance companies are among the market's busiest investors but a new phenomenon taking root is transforming their own business into collateral for securitizations. Trust preferred securities, or TruPS, have been harnessed as collateral...

Global SF exhibits mixed rating volatility.(structured finance)
April 19, 2004... By Erkan Erturk, Ph.D., director, and Tom Gillis, managing director, Standard & Poor's Ratings Services Global structured securities experienced relatively significant rating volatility, both upward and downward, during the first three...

Supply-induced spread widening attracts investors.
April 19, 2004... Mortgage spreads were hit early in the week on originator and servicer selling, and investor profit-taking to move up in coupon, brought on by a heavy sell-off in Treasurys following strong economic reports. From the April 8 close through...

Shilo Inns a victory for servicers.(Brief Article)
April 19, 2004... Pending amendments to the pooling and servicing agreements of the transactions within which Shilo Inn loans were securitized should pacify servicers on those deals who were concerned over potential interest shortfalls, according to Standard &...

Mortgage originations to trend down.
April 19, 2004... The Mortgage Bankers Association (MBA) expects mortgage originations to trend down to $2.57 trillion in 2004, from an all-time high of $3.8 trillion in 2003. This is part of the association's three-year forecast for the U.S. economy and housing...

MBS investors face various risks after rates move.
April 19, 2004... Some concerns remain in the MBS market that the strengthening economy will lead to a larger and more expedient uptick in interest rates. This poses big risks to mortgage investors and for the housing markets in general. "The rapidity of...

Minimum value for Ginnies removed.
April 19, 2004... The Department of Housing and Urban Development (HUD) is proposing to do away with a regulation specifying the current minimum face amount of any security issued by Ginnie Mae. The existing regulation says the face amount of any security cannot...

Argentina's Molinos pulls through crisis, with a few nicks.
April 19, 2004... One of the rare survivors of the Argentine cross-border universe, a 10-year issue from foodstuffs company Molinos Rio de la Plata via Citibank, has still faced its fair share of blows over the last few years. Fitch Ratings took their local...

Brazil's Aracruz, Banco Salvadoreno award mandates.
April 19, 2004... Following a sterile first quarter, cross-border future-flow deals from Latin America are coming back to life. Brazilian wood pulp producer Aracruz Celulose and Salvadoran bank Banco Salvadoreno have awarded mandates to veteran JPMorgan...

CDO world takes an interest in U.K. PFI paper.(Privet Finance Initiative)
April 19, 2004... Fitch Ratings expects that CDOs may become a funding source in the U.K. private finance initiative (PFI) sector and said it is currently working on a number of proposed CDO transactions that would purchase PFI assets. As the 10-year PFI...

European issuance continues slowdown.(asset backe securities)
April 19, 2004... With the markets closed last Monday to observe Easter, European ABS activity finally took a breather. Just 1 billion (US$1.19 billion) of visible new paper began circulating when activity resumed on Tuesday. Approximately 6.35 billion...

Uncharted financial territory lies ahead for new EU members.(European Union)(Private Public Partnerships)
April 19, 2004... It's possible that Private Public Partnerships (PPPs), a structure used in Europe and endorsed by the European Investment Bank (EIB), will begin to appear as collateral in European collateralized debt obligations down the line. Fitch Ratings...

The Maastricht criteria consist of the following:.(Brief Article)
April 19, 2004... * Price stability. The average rate of inflation observed over the 12 months preceding EMU accession must not exceed the average in the three best-performing EU member states by more than 1.5 percentage points. In practice, this will most...

HK tunnels deal gets launch date.(Hong Kong)(Brief Article)
April 19, 2004... The Hong Kong government's eagerly anticipated HK$6 billion securitization of toll revenues will be launched on April 19, a banker involved on the deal told ASR. Citibank and HSBC are joint lead-managers on the transaction, which will be backed...

Whispers.(appointments)
April 26, 2004... Deutsche Bank Securities appointed managing directors Rich d'Albert and Michael Raynes as global co-heads of the Securitized Products Group, reporting to Rajeev Misra, global head of Integrated Credit Trading. Additionally, the global CDO...

Government officials challenge the GSEs to do more, more, more.
April 26, 2004... WASHINGTON - With the media shining a harsh spotlight these days on Freddie Mac and Fannie Mae, it came as no surprise that the Mortgage Bankers Association (MBA) held a session devoted exclusively to the beleaguered GSEs at the National...

What's the holdup?(securitization from Oncor Electric)
April 26, 2004... New initiatives, which include lobbying European regulators, have been the primary factor in the longer-than-anticipated marketing period for the upcoming stranded cost securitization from Oncor Electric. The $790 million series 2004-1...

Twists & turns mark Uruguayan deal.(Grinor)
April 26, 2004... A deal due out next month in Uruguay comes with a structure that's as baroque as it gets in Latin America. To maneuver around obstacles - including a regulatory prohibition on pension funds' buying straight future flow deals - sole lead Banco...

SEC sets rules proposal discussion.(Asset Backed Securities)(Securities and Exchange Commission)(Brief Article)
April 26, 2004... The Securities and Exchange Commission caught the ABS market off guard last week by announcing that it scheduled an open discussion on, among other things, the offering and reporting reform proposal currently being debated. While a proposal was...

ACE subsidiary aims for a Moody's Aaa.(Assured Guaranty Ltd.)
April 26, 2004... Assured Guaranty Ltd., a newly created holding company and subsidiary of ACE Ltd., has filed an S-1 with the Securities and Exchange Commission for the sale of 49,000,000 shares of common stock with a target price of $18 to $20 per share. With...

FGIC on a tear in first quarter.
April 26, 2004... True to plan, monoline guarantor Financial Guaranty Insurance Co. rapidly grew its book of business in the first quarter, after freeing itself from conservative former parent General Electric and hiring Howard Pfeffer away from rival Ambac (see...

Newborn finance company Gramercy sets sights on securitization.
April 26, 2004... Gramercy Capital Corp., a newly formed specialty finance company, plans to use securitization as a source of funding, according to an S-11 filing with the Securities and Exchange Commission for the sale of $200 million in common stock. Gramercy...

U.S. ABS enjoys variety without volume.
April 26, 2004... The U.S. ABS market continued at a modest pace last week, pricing roughly $9 billion in new-issue supply, focusing on either the mortgage-related or student loan sectors of the market. Aside from a pair of off-the run deals, there were no other...

Ares launches new mezz lending unit.(Brief Article)
April 26, 2004... High yield loan specialist Ares Capital Management - an affiliate of Los Angeles-based investment manager Ares Management LLC - has formed a new entity to lend to the middle market and second lien secured loan market, as well as mezzanine and...

Investors to see normalized reports , if dealers cooperate.
April 26, 2004... A standardized trustee report will soon be on the way to investors' mailrooms as The Bond Market Association released the final version of a template for monthly CDO trustee reports late last week. Historically, non-standardized CDO...

12b-1 ABS emerges from scandal unscarred.
April 26, 2004... Citibank's Hedged Mutual Fund Fee Trust priced its first offering for 2004 last week, and it was also the first 12b-1 fee-backed transaction of the year. The sector appears to be unaffected by the noxious headlines that have plagued the mutual...

Textron offers private placement amid earning release.
April 26, 2004... Last week, Textron Inc. reported earnings as its subsidiary, Textron Financial Corp., which services, finances and manages receivables, had a senior note transaction circulating in the private placement market. Providence, R.I.-based...

Mortgage market looks far better down the road, said panelists.
April 26, 2004... In nearing the tail end of a period of volatility, it becomes clear that this cycle was not nearly as volatile as the comparable cycle in 1993, said MBS analysts on the Wall Street Update panel at the Mortgage Bankers Association's (MBA)...

Good grades for the housing industry.
April 26, 2004... Panelists at the second general session of the Mortgage Bankers Association's (MBA) National Secondary Conference & Expo were all praises for the housing market, while executives from Ginnie Mae, Fannie Mae, Freddie Mac and the Federal Home...

Life after the refi boom is not easy but lenders learn to cope.
April 26, 2004... At the Mortgage Bankers Association's (MBA) National Secondary Conference & Expo third general session last week, the focus turned to coping with the post-refinance boom environment. While volume is not exactly in a downward spiral, Marc...

Ginnie plans to repack and sell excess.(Brief Article)
April 26, 2004... Ginnie Mae plans to introduce an excess servicing security this October, applying it only to excess servicing on GNMA II originated loans. This new program is meant to alleviate the seller's burden in retaining the servicing, as the asset has...

Active flows on reaction to Chairman Greenspan's comments.
April 26, 2004... The mortgage market enjoyed active two-way flows last week. It was a quiet start ahead of appearances on Tuesday and Wednesday by Federal Reserve Chairman Alan Greenspan. In his testimony on Tuesday before the Senate Banking Committee regarding...

No longer virgin, Argentine olive oil becomes versed in ABS.(asset backed security)
April 26, 2004... With the Argentine export machine in overdrive and a convalescent bank sector loath to extend credit, securitization remains the only game in town for many agribusiness companies. Producers of olive oil and olives are the latest to join up....