Asset Securitization Report articles from April 2008

Asset Securitization Report archives from April 2008

Whispers.
April 7, 2008... Christopher Beaudet, who was a managing director and co-head of the ABS group at Deutsche Bank Securities, left the company recently. While at Deutsche, much of Beaudet's focus was on the securitization of auto loans and leases, equipment...

Russian Origination- How Tough Can It Be?
April 7, 2008... With origination of securitizable assets slipping among leading developed countries, the vice grip on global liquidity still unshakable, and Western European investors loathe to buy all kinds of ABS and MBS, it would follow that Russian...

Cards and Student Loans Keep ABS Week Moving: FFELP market gets a boost with Nelnet deal, while credit cards make a good showing.
April 7, 2008... ABS market professionals spent much of last week tallying up production from the first quarter. Notwithstanding the typical sluggishness brought about by the opening days of a new fiscal period, volumes were modest. By press time, market...

1Q08 Lead Manager Ranking Bears Scars of Meltdown.
April 7, 2008... The subprime mortgage meltdown continues to alter the asset securitization market. In the first place, issuance was just $63.8 billion, a 71.7% plunge from the $225.6 billion in transactions that the industry completed at the end of the first...

European Mortgage Servicing: The Cleaning Crew Takes Center Stage.
April 7, 2008... U.K. nonconforming lenders continue their exodus from the market. This has left borrowers with little option for refinancing and left lenders facing mounting arrears. One of the only tools the mortgage industry has to rein in the losses on...

CLO Issuance Takes Baby Steps In the First Quarter.
April 7, 2008... Camulos Capital closed Camulos Loan Vehicle 1 last Wednesday, kicking off the second quarter with positive news in the way of new issuance. The $731 million cash flow CLO, which is the first CLO for the manager, offered triple-A to double-B...

Paulson Plan Boosts Morale.(Henry Paulson)
April 7, 2008... Even with the U.S. Treasury making an aggressive attempt to revamp the country's financial system, market experts believe that there is not much chance of this happening in 2008. Secretary of the Treasury Henry Paulson has laid out a...

Argentina's Salta Could Seek Restructuring.
April 7, 2008... Through the worst of Argentina's post-devaluation recession, a securitization of oil and gas royalties originated by the province of Salta made good on its payments. But now, six years after the economy touched bottom and subsequently entered a...

FGIC-wrapped Deals Fall From Mexican Triple-A.
April 7, 2008... Moody's Investors Service last week downgraded domestic deals in Mexico wrapped by FGIC to Aa3.mx' from Aaa.mx.' While the agency had downgraded monoline-wrapped emerging-market deals on its global currency scale before last week, this move...

Lack of New Lending May Increase Arrears.
April 7, 2008... The U.K. nonconforming lending market got smaller last week when the news of two more lenders stepping out of the game hit the European market - Southern Pacific Mortgage Loans (SPML) and Preferred Mortgage Loans (PML), which are both units of...

UBS Downgrade will Not Impact Broadgate Deal.
April 7, 2008... Fitch Ratings said that last week's downgrade of UBS AG to AA-' from AA' does not have a negative impact on the ratings of the Broadgate Financing PLC securitization. According to the rating agency, UBS remains the top tenant in the...

Student Loan ABS Pros Discuss Strategies for Coping with Pullback.
April 7, 2008... Without a doubt, a puzzle looms over the student loan finance business. How will students continue to finance their educations amid the potential withdrawal of $20 billion from Federal Family Education Loan Program (FFELP) programs, reductions...

Troubles Aside, Bear Stearns Tops RMBS: Troubles at Bear did not stop it from leading the rankings of a not-so-impressive quarter.
April 7, 2008... Despite its current difficulties, Bear Stearns took the top spot in the U.S. RMBS manager rankings for 1Q08, according to Thomson Financial data. The bank rose from a second place finish for all of 2007 and third place in the first quarter of...

Whispers.
April 11, 2008... BNP Paribas has tapped a new global head of fixed income and quantitative research from among its own ranks, hiring Guillaume Amblard, the current captain of the company's global interest rate and foreign-exchange trading desk. Amblard,...

From Bad to Worse - Will It Ever Get Better?
April 11, 2008... It's hard to remain optimistic about European securitization activity coming back when virtually nothing is getting done in the primary market. By this time of the year, European ABS should have already seen some sort of recovery, but...

Conference Subdues Market's Issuance Activity: Super duper senior Alt-A hybrid gets UBS nod, but consumer ABS to lead issuance for now.(Conference news)
April 11, 2008... Last week's issuance haul did not amount to much. Most market participants chalked the persistent slowdown to untenable market conditions that kept issuers and investors out of the fray. On Monday and Tuesday of last week, though, Claris...

SLM Corp. Comes Under Fire.
April 11, 2008... Fresh off securing $31 billion in financing from a syndicate led by Bank of America and JPMorgan Chase, SLM Corp. walked into a tough week. On a corporate level, the company's counterparty credit rating was downgraded, and it remained on watch...

New Jersey Gov. Corzine Unveils Toll Road Financing Plan.(Governor Jon Corzine)
April 11, 2008... Last week New Jersey Governor Jon Corzine published his Financial Restructuring and Debt Reduction Proposal, which would use structured finance techniques to issue up to $37.6 billion to pay down half of the state's $32 billion debt and fund...

ASF 08: Reflecting on the Past, Coming to Terms with New Reality.(American Securitization Forum)
April 11, 2008... At the American Securitization Forum's (ASF) conference held in Las Vegas last week, many of the industry panels looked back at 2007 and reflected on how the market got to the state it's at right now. Participants also looked ahead to this...

Steel Sees Results in HOPE NOW Program.(Treasury for Domestic Finance)
April 11, 2008... Given higher oil prices, contraction in the capital markets and a downturn in the housing sector, a slowing economy appears imminent, said Robert Steel, undersecretary of the Treasury for Domestic Finance, who gave the keynote speech last...

Investor Responsibility to Play Bigger Role in CDO Market.
April 11, 2008... Demands for more personal responsibility on the part of the CDO investor and the portfolio manager gave the rating agencies a break from the hot seat at the ASF's annual conference in Las Vegas last week. While panelist Mark Gold, chief...

CLO Troubles Not Due to Fundamentals.
April 11, 2008... Blame it on the New York Giants' Super Bowl victory or a streak of luck at the blackjack tables, but panelists at last week's American Securitization Forum's annual conference in Vegas were optimistic about liquidity returning to certain parts...

Fed Governor Vows Crackdown On Abusive Lending.
April 11, 2008... The industry must give priority to curbing abusive lending practices that have devastated the housing market and wreaked havoc on the securities market, Federal Reserve Board Governor Randall Krozner said in a keynote speech at last week's ASF...

Let's Get Back to Basics, MBA Panelists Say.(Discussion)
April 11, 2008... The Mortgage Banker Association's (MBA) Commercial Real Estate Finance (CREF) and Multifamily Housing Convention & Expo 2008 held last week began with opening remarks from MBA President and CEO Jonathan Kempner. Kempner's comments drew a...

February Speeds to Reflect Low Rates: February prepayment report to show mortgage market refinancing capability.
April 11, 2008... January speeds reported last week came out tame January prepayment reports released last Wednesday showed speeds that were generally in-line with previous Street projections. According to research from Merrill Lynch, FNMA 30s increased by...

Week Sees Modest and Mixed MBS Flows.
April 11, 2008... Through midweek last week, tapebombs were absent, so the markets reacted to mixed economic data and some earnings news. The negative headlines included stunningly weak results for the ISM Non-Manufacturing Index on Tuesday, which came in at...

Investors Turn Increasingly to CMBS in Slow PP Market.
April 11, 2008... Investors in traditional private placements are turning more and more to commercial mortgage backed securities to find value amid a private placement market that has been slow to take off in 2008. Though it is no secret that insurance...

CMBX Causes Lack of Pricing Clarity.
April 11, 2008... CMBS market participants have been talking about the negative effect that the CMBX has had on spreads in the absence of cash markets flow and or issuance. This was also a hot topic at the Mortgage Bankers Association's (MBA) Commercial Real...

New Opportunities for Euro Covered Bonds: Euro players are keen to get their systems updated as the market starts normalizing.
April 11, 2008... Traditionally liquid triple-A products, European covered bonds have not escaped the credit market turmoil. Covered bond market-making came under scrutiny last year as secondary activity was suspended to avoid undue acceleration of spread...

U.K. Moves Toward New Covered Bond Legislation.
April 11, 2008... The U.K. is looking toward an early March implementation date for its new covered bond regime that uses a statutory framework instead of a contractual one. Under a statutory framework, covered bond deals are structured under a specific...

Russian Factoring Deal Sneaks into Market.
April 11, 2008... An unusual deal from Russia came to light last week. The first public trade receivables ABS to be rated by Standard & Poor's, this transaction collateralizes factoring invoices that are denominated in rubles. It formally closed in December, but...

ABN Closes Synthetic Brazil CLO.
April 11, 2008... ABN AMRO and Dutch pension administrator PGGM have closed a synthetic CLO referencing a portfolio originated by ABN Brazilian unit Banco Real, according to a press release by the European bank. Named after the celebrated Iguacu waterfalls, the...

RBS Appoints Global Heads.
April 11, 2008... Royal Bank of Scotland has appointed Joe Walsh as global co-head of credit markets, Americas. Previously, Walsh was head of mortgage and asset-backed trading, origination and finance at RBS Greenwich Capital. He will run the business with Euan...

Russia's MBS and Auto Loan Losses Still at Nil.
April 11, 2008... None of the MBS or auto loan deals that have come out of Russia, Kazakhstan or the Ukraine has reported losses through the end of 2007, according to a performance report by Moody's Investors Service. RMBS delinquencies remain low as well, with...

Whispers.(high attrition at RBS Greenwich Capital)
April 14, 2008... RBS Greenwich Capital continues to lose high-profile traders in its MBS area. Ronald Weibye, managing director and head of nonagency trading, left the company early last week. The move had some logic to it, since many of the traders who...

Is the U.K. on the Brink of a Recession?
April 14, 2008... U.K. borrowers are beginning to feel the credit pinch a la U.S. style. And it's not just the risky ones that are seeing the doors close on lending. That the nonconforming lending market has had to reshape itself in the wake of the subprime...

CDO Liquidations Raise Stakes: Slight stabilization seen in RMBS, but not enough to inspire confidence.
April 14, 2008... When the subprime RMBS and HEL markets began to fall apart, the market watched as billions in mezzanine CDO liquidations routed spreads, undermined investor confidence and siphoned liquidity from the securitization markets. Another major...

MBS Pros Queue Up Special Servicer Operations.
April 14, 2008... As things fall apart at MBS and CDO operations throughout the securitization industry - creating a void in financial services - small teams of executives have begun to regroup as hedge and distressed-asset funds to start picking up the pieces....

Hand -to- Hand: Players Lock Limbs Over Counterparty Risk.
April 14, 2008... For more than nine months, the market has been attempting to sort through the tangled web of counterparty risk that has entrapped Wall Street. After all, this problem has halted new issuance, slowed trade volume and brought down banking...

Private SLABS Hit New Rocky Patch.
April 14, 2008... Just as one segment of the student loan ABS sector seemed to get a lifeline from federal authorities, the private side of the market took another hit. Last week, The Education Resources Institute. (TERI), filed for Chapter 11 bankruptcy after a...

Moody's: Card Performance Looks Weaker, Outlook Dims.
April 14, 2008... Credit card delinquency and charge-off rates continued their upward climb on a sequential and year-over-year basis in January, according to the latest data gleaned by Moody's Investors Service. In January, charge-off rates reached 5.48%,...

Fed Actions Boost Mortgage Sector: Although mortgages have performed well recently, volume is down.
April 14, 2008... Mortgages continued their tightening trend on Monday for the fifth straight session, but gave it up on Tuesday and Wednesday. Flows on Monday were supportive with better buying from foreign and domestic banks and money managers adding...

Markit Launches LCDX Series 10.
April 14, 2008... Nine is so passe, at least if you track secondary loan trades. Markit launched the LCDX Series 10 index last week, and like its predecessor, the Series 9, it will track 100 issues trading in the secondary market. At midday Tuesday, the Series...

Surveillance Tool Targets CLO Shops.
April 14, 2008... With the current volatile environment, surveillance has become a key feature in the work of collateral managers and investors alike. In this vein, Deloitte & Touche - which has previously come out with the ABCP, ABS and CDO Suite products as...

BAA To Move Ahead with Refinancing: London's Heathrow airport is one BAA asset that will benefit from BAA's accessing the bond market.
April 14, 2008... The British Airport Authority (BAA), which is owned by Grupo Ferrovial, said it is considering a combination of bank and bond financing. By pursuing these options, BAA thinks it could increase the chances of a successful and timely...

U.K. Govt. Calls for Rapid Action.
April 14, 2008... Alistair Darling, the U.K. chancellor of the exchequer, said that the G7 leading economies need to take action to ease the ongoing strains on the global financial markets and to strengthen the financial system's resilience. In a letter...

Europe's Last Standing SIV Falls.
April 14, 2008... Moody's Investors Service downgraded Sigma Finance's Gordian Knot-managed SIV senior ratings to A2'/P2' from Aaa'/'P1' following a review of credit enhancement and impending liquidity problems. Sigma was placed on watch negative by both...

RMBS Deal Braves Higher Spreads.
April 14, 2008... There's no doubt that the spread environment in Mexico has turned harsher, but sagging interest rates are mitigating much of the sting of the steeper spreads. More importantly, domestic market investors remain open for business, as...

Whispers.
April 21, 2008... ABN Amro ABS syndicate head Neil McPherson left the bank on April 10, according to people familiar with the bank. Market sources said that several people left along with McPherson, and suggested that the change was probably a result of...

Feds Justly Tapped For SLABS Fix.
April 21, 2008... The student loan ABS sector, usually one of the most stable and reliable of the ABS asset classes, has been putting on some uncharacteristically dramatic behavior lately. Last week alone, SLM Corp., known as the issuer Sallie Mae, reported...

ABS Deals Pick Up, Amid Talk of More Job Cuts: Consumer ABS focus of all transactions as market tries to regain footing.
April 21, 2008... It was not exactly a stunning comeback for the securitization industry, but last week's collection of deals marked something of a stepped up pace of issuance and there was talk of revived investor confidence in the industry. Since April...

Sallie Upbeat Facing "Train Wreck".
April 21, 2008... While it originated a record amount of student loans, the lender acknowledged that current market conditions will force it to make loans at an economic loss. "We've been predicting something of a train wreck, with the absence of credit and...

BofA Set to Launch Enterprise ABCP.
April 21, 2008... Bank of America is planning to launch a partially supported asset-backed commercial paper conduit with the flexibility to buy ABCP debt from other vehicles as well as non-dollar denominated assets. The vehicle is called Enterprise Funding...

Legislation Protecting Servicers Agitates ABS Investors.(asset backed securities)(Emergency Loan Modification Act)
April 21, 2008... With government efforts aimed at stemming the housing crisis in full gear, discussions are heating up regarding the Emergency Loan Modification Act of 2008, which would allow servicers the safe harbor to perform loan modifications. However,...

GSEs Threaten U.S. Economic Stability: Agencies' role in the mortgage market grows, but so does balance sheet risk.
April 21, 2008... The expanded role of the GSEs may be a double-edged sword for the financial stability of the U.S. economy, market participants said last week. Discussion in the market was sparked after a provocative report from Standard & Poor's suggested...

MBS Performance Remains Positive, Although Losing Luster.
April 21, 2008... Last week had a heavy data calendar, along with some earnings news from key MBS players. Data in the first half of the week generally came in worse than expected. For example, the PPI numbers were much stronger than expected at 1.1% versus a...

Spanish Program to Boost Mortgage Deals.
April 21, 2008... The Spanish government has introduced a new mortgage securitization guarantees program. The aim is to inject liquidity into what has become a very stagnant sector. According to Spain's Instituto de Credito Oficial, up to 3 billion ($4.7...

Commercial First Falls Victim to Funding Deficiency.
April 21, 2008... Commercial First has been forced to stop originating loans as a result of funding difficulties. The commercial mortgage lender has fully utilized its warehouse facilities and has thus far not found additional liquidity. Its current...

Basel II Reworked to Address Current Crisis.
April 21, 2008... The Basel committee last Wednesday announced plans to enhance Basel II, a move that involves some extra steps to "strengthen the resilience of the banking system." These steps include changes to the capital treatment of liquidity...

Cap One Job Cuts Impact Servicing.
April 21, 2008... Capital One Bank Europe's announced plans to cut 750 jobs by yearend at its U.K. headquarters located in Nottingham represents roughly 40% of the firm's total number of employees. Job losses are expected in areas such as human resources,...

Fog Up Ahead: New Tax Blurs Future of Mexican Toll Road ABS.
April 21, 2008... With several years of smooth traveling behind them, a group of Mexican toll road transactions have hit potentially shaky ground. A law that went into effect Jan. 1 gives private concessionaires operating toll roads one of two options for...

Financial Guarantors Put Up a Fight in 1Q08.
April 21, 2008... The first quarter of 2008 brought a slew of grim announcements for the financial guarantor industry, including a decision by some to put new business on hold altogether. But despite market troubles, the monolines held on in the beginning of...

Whispers.
April 28, 2008... JPMorgan chase might be buying Bear Stearns' stock at a fire sale price, but the company might have to pony up a bit more to keep its MBS traders. Last week Paul Van Lingen and Scott Eichel, both senior managing directors, and Joseph Steffa all...

What's Portuguese for Caveat Emptor?
April 28, 2008... By any standards, Brazilian consumer debt is exploding. The balance of credit cards, payroll-deductible loans, unsecured loans and auto loans totaled R$264 billion ($1.57 billion) at the end of 2007, up 29% from a year earlier. With...

Market Shrugs off Ambac En Route to Mini-Rally: Now, as investors propose swaps, the Street holds out.
April 28, 2008... What a difference the need for cash makes. The securitization market did a brisk business in consumer ABS paper last week, oversubscribing to a USAA auto deal and blowing out a Discover Financial Services credit card transaction. The...

Well-Heeled CDO Managers Stand Their Ground.
April 28, 2008... At the onset of CDO troubles this past summer, market participants predicted that tough times would weed out the established players from the fly-by-night shops. As the CLO market begins to pick up, it appears the predictions might be coming...

Re-securitization of Junior ABS Contemplated.(asset backed securities)
April 28, 2008... The commoditized CDO market might be kaput, but Avon, Conn.-based Structured Finance Advisors (SFA) is hoping to make a successful turn at putting together a structure secured by junior securitized notes. If the transaction gets...

Fitch Releases Revised MVS Method.
April 28, 2008... Continued downgrades of market value structures (MVS) - and subsequent restructurings in some cases - have called attention to their sensitivity to pricing dislocations. As a result, rating methodologies have been re-evaluated to take into...

Bank of England Answers Industry's SOS Call.
April 28, 2008... The Bank of England threw another lifeline to banks last week, unveiling a new GBP50 billion ($99.3 billion) special liquidity scheme (SLS) The new scheme will allow banks to temporarily swap their high quality, triple-A rated MBS and...

TIAA-CREF Markets U.S. Real Estate Fund.
April 28, 2008... Not all real estate investors are sitting on the sidelines as the mortgage market continues to take a beating. Some players are actually jumping back into the game and taking a longer-term perspective. These players are benefiting from the...

Senate Questions Rating Agency Role in Market Turmoil.
April 28, 2008... The three major rating agencies came under attack again last week when the U.S. Senate Committee on Banking, Housing and Urban Affairs held a meeting about the agencies' role in the current credit markets turmoil. Senator Christopher Dodd...

Mortgage-backeds Gain Due to Strong Buying: Overseas investors were active in a week that saw better buying but below normal supply.
April 28, 2008... Through Tuesday, mortgages had made tremendous gains on better buying, below normal supply, tighter swap spreads and lower volatility from the middle of the previous week. For example, month-to-date through April 17, Lehman Brothers' MBS...

European Primary Still Fully Retained by Issuers: Tightening spreads provide a sign of hope to Europe's stalled securitization market.
April 28, 2008... European cash spreads continue to show signs of tightening. This indicates that investors might be stepping back into the arena. "We observe that bids are starting to include a considerable range of asset classes," UniCredit Markets &...

U.K. CMBS Remains Sound.
April 28, 2008... Fitch Ratings last week highlighted the ability of U.K. CMBS transactions to support significant market value declines. According to Fitch, even if valuation yields for U.K. commercial properties increased to early 1990's recession levels,...

Leaving ABS: Will the Shakeout Become a Walkout?
April 28, 2008... Jefferies & Co. made news last week when it hired 10 senior executives for its mortgage-backed securities trading group, in an effort to expand its fixed-income business. The ABS market was also buzzing with word that JPMorgan Chase used a...

Clarification.(Correction notice)
April 28, 2008... In the April 14 issue of ASR, the terms of the master agreement in a trade were misstated. The application by the pension plan for a minimum funding waiver, if the pension were concerned it would not meet its minimum fund requirement, should...