Asset Securitization Report articles from December 2003

Asset Securitization Report archives from December 2003

Whispers.(business currents)
December 8, 2003... Bill Bartmann, co-founder of Consumer Financial Services, was found innocent last Wednesday after a four-day jury deliberation, according to published reports. Bartmann had been charged with money laundering and conspiracy to commit fraud. The...

Realities of the NCFE meltdown: No one here gets out alive.(National Century Financial Enterprises)
December 8, 2003... As part of the ABS holders' planned settlement with National Century Financial Enterprises, ING will likely refund a $43.1 million principal payment it received from NPF VI in November 2002, which is being called a "preferential transfer" by...

Appreciation accuracy improves.
December 8, 2003... Freddie Mac's Conventional Mortgage Home Price Index (CMHPI) reported last week that home values rose by an annualized rate of 4.8% in the third quarter, a figure that is almost flat relative to the previous quarter's revised annualized rate of...

CSFB, Citigroup stoke Mexican fire.(Credit Suisse First Boston)
December 8, 2003... Even for Mexico, on a tear for most of this year, it was a bit much to produce a pair of monumental deals at the start of the holiday season. In a span of two days, Credit Suisse First Boston and Citigroup unit Acciones y Valores debuted...

Brazil's Embraer takes flight with U.S. EETC.
December 8, 2003... Amid a three-deal pick up in aircraft-related activity Embraer-Empresa Brasileira de Aeronutica S.A. sold $409 million of enhanced equipment trust certificates last week, although the offering was named ExpressJet 2003-ERJ1. Backed by payments...

Post-holiday market sees $8 billion.
December 8, 2003... The U.S. ABS primary market remained slow last week, as the market retuned from Thanksgiving to make the final stretch in what is already a record-breaking year for supply. Although the ball took a couple days to get rolling again, by mid-week...

SouthCoast prices largest ABS CDO.(Collateralized debt obligation)(Brief Article)
December 8, 2003... Merrill Lynch is said to have priced the largest ABS CDO seen in the visible market, sources said. South Coast Funding IV, a cash flow deal, circled up at a whopping $1 billion. TCW Advisors Inc. is the collateral manager, and the deal...

Managed synthetic upgraded.(Brief Article)
December 8, 2003... In a rarity for the CDO market, several classes of a synthetic investment-grade CDO were placed on review for upgrade by Moody's Investors Service. Most CDO upgrades have been associated with cash deals delivering as the senior classes pay...

HEL researchers look to 2004 and see extension risk.(Home Equity Loan)
December 8, 2003... With the refinance boom of 2003 seemingly over, extension risk in the home equity sector will be a hot topic in 2004. Although origination volume is expected to remain somewhat constant, as lenders move up the credit spectrum, prepayment...

High yield CDOs: Credit quality up and record new issuance.(Collateralized debt obligations)
December 8, 2003... The credit quality of high yield CDOs, particularly at the senior level, is improving, Merrill Lynch reported last week in research. A recently issued surveillance report from the firm tracked deal performance and coverage test status of 35...

Cap One from finance company to bank.
December 8, 2003... A move toward increasing deposits could affect the level of securitization business done by Capital One, the company said during a presentation at last week's Investors Conference hosted by Friedman, Billings, Ramsey Group. Cap One touted...

AmeriCredit talks triggers and its turnaround.
December 8, 2003... In scaling back a $2 billion loan-origination program by more than half, diversifying its business with monolines and raising FICO targets, it appears a leaner AmeriCredit Corp. has emerged to close out 2003. Speaking to equity investors last...

Steady support, light supply combine to tighten spreads.
December 8, 2003... The week started off slow with limited buying interest; it picked up, however, as the week progressed and supply stalled. Originator selling averaged about $750 million per day, mostly in 30-year 5.5% coupons. Buyers included insurance...

Market dynamics live on, says Moody's in CMBS study.(Moody's Investor Service, commercial mortgage backed securities)
December 8, 2003... The 2000 vintage CMBS was an anomaly with higher-than-expected delinquencies but its lackluster performance shows that the real estate cycle still matters, concluded Moody's Investors Service in a report released last week on CMBS loans. ...

Itau shows there's no shame in going bare.
December 8, 2003... Brazil's Banco Itau offered a detour from a bout of triple-A product out of Latin America and came unwrapped with a US$105 million securitization of diversified payment rights (DPRs), its first uninsured deal off this program. The legal final...

recently closed a chapter of unprecedented trustee activism when a vehicle under its care sold a 93% stake in Nuevo Banco de Santa Fe to Banco de San Juan.(ABN Amro Trust Argentina )
December 8, 2003... Priced at Ps133 million (US$44.8 million), the holding was snapped up by ABN's trustee division back in May. Regulators approved, as isolating choice banking assets and liabilities into structured vehicles had already proven effective in...

Parmalat deal.(Brief Article)
December 8, 2003... For a year ignored by investor heavyweights, receivables investment funds (FIDCs) are now making friends in the Brazilian domestic market. Santander and Itau BBA closed a R$150 million (US$51 million) FIDC on Nov. 25 for international milkmaid...

Europe ready to wrap up another busy year.
December 8, 2003... On the first day of Christmas the market brought to Europe one Belgium deal, one German true-sale and a whole slate of paper still holding on to the unprecedented year-end tight levels. All jingles aside, investors are gearing up to close books...

Market revisits the question of German Landesbanks ratings.
December 8, 2003... Standard & Poor's revisited the Landesbank credit issue in late November, stating that it will be publishing its stand-alone ratings for the Landesbanks one year ahead of the 2005 deadline. At that point, the German banks will officially lose...

Cosmos hits Taiwan's ABS market.
December 8, 2003... UBS Limited and HVB Singapore structured and brought to market the first cross-border transaction from Taiwan. The deal G&M Finance Limited issued a US$230 million bond rated Aa3' by Moody's Investors Service and AA-' from Standard & Poor's. It...

Whispers.
December 15, 2003... Former National Century Financial Enterprises Director of Compliance Brian J. Stucke recently pleaded guilty to criminal conspiracy fraud charges filed by the U.S. Attorney's Office for the District Court for the Southern District of Ohio,...

Investors forcing changes in auto structure: Swap curve steepness drives move to EDSF...(EuroDollar Spot Forward)
December 15, 2003... A market anomaly in underlying benchmark yield curve dynamics has caused two-year auto paper - historically the most difficult sell in the capital structure - to be shortened slightly and indexed off EDSF rather than interbank swaps. The...

Triple-B HELs tighten up.
December 15, 2003... With the return of the CDO bid, one of the biggest winners of late has been home-equity ABS triple-B minus rated subordinates. Routinely pricing with an 800 basis point margin versus Libor, this year, top-tier triple-B minus bonds have cracked...

Insurance ABS benefits charities.
December 15, 2003... AIG Life Co. is still rolling out deals that capture the arbitrage between life insurance and annuities. And these deals reportedly come with an interesting twist: The cash is destined for charities. Sources said a third deal in the...

FASB pushes the deferral question to this week's agenda.(Financial Accounting Standards Board )
December 15, 2003... Despite the groundswell of comments in support of a broad-based deferral of Financial Interpretation No. 46 until it is finalized, the Financial Accounting Standards Board did not address this possibility at its Dec. 10 meeting due primarily to...

$10.5 billion ABS week sees Providian.
December 15, 2003... With $10.5 billion priced and an additional $1.5 billion set to price late in the week, the U.S. ABS primary market is making its last push of the year. Sources did expect the supply to continue into this week before dying off before Christmas....

Second NCFE conspirator revealed.(National Century Financial Enterprises)(Brief Article)
December 15, 2003... Former National Century Financial Enterprises Director of Compliance Brian J. Stucke recently pleaded guilty to criminal conspiracy fraud charges filed by the U.S. Attorney's Office for the District Court for the Southern District of Ohio,...

New Century to write $30 billion in 2004.
December 15, 2003... Brad A. Morrice, vice chairman of mortgage lender New Century Financial Corp., projects the company's production will grow to $30 billion in 2004, adding that New Century was on track to hit its $27 billion target this year. Morrice recently...

Jump-start guarantor to facilitate IP-backed loans.
December 15, 2003... With a new angle on monetizing intellectual property, IP Innovations Financial Services recently scored $28 million in start-up capital from Principal Financial Group, for the purpose of guaranteeing loans secured by IP assets. IPI intends...

CDO volume down for 2003; overall outlook stable for 2004.(collateralized debt obligations)
December 15, 2003... What a difference a year makes, particularly regarding structured finance. After cycling through a record wave of downgrades in 2002, the CDO market has finally begun to show some ratings stability. On the new issue side, however, it looks...

Citigroup closing on return to No. 1 ABS spot.(Brief Article)
December 15, 2003... As 2003 draws to a close, Citigroup Global Markets has a seemingly insurmountable lead on its competitors in the U.S. asset-backed underwriter rankings, according to preliminary numbers maintained by Thomson Financial. With $62.4 billion of ABS...

Another first for life insurance: New CAT bond covers extreme mortality.
December 15, 2003... For the most part, all the talk a few years ago about securitizing terrorism risk remained just that - talk. New developments, and an indirect reference, could help these deals along. Swiss Re, a prolific issuer of bonds covering property...

N.W. Air debt to EETC exchange drums up scant interest.(Northwest Airlines)(Brief Article)
December 15, 2003... Northwest Airlines announced that it had successfully exchanged $59.06 million of its outstanding debt due through 2006 for newly issued Class D EETC notes due April 2009. Northwest expects to have closed $64.4 million of series 2003-1 EETC as...

MS structures AIRPT repackaging.(Morgan Stanley and Company Inc., Airplanes Pass-Through Trust)(Brief Article)
December 15, 2003... Morgan Stanley recently closed an innovative repackaging of impaired-aircraft ABS notes, issued through the bank's Combination Repackaged Asset Backed Securities II shelf, or CRABS II. MS combined an interest portion from the A-9 notes of...

Ginnie releases new data on its pools.(Ginnie Mae)(Brief Article)
December 15, 2003... Ginnie Mae will start to release additional disclosure information on a daily basis for new issues beginning in January. Aside from this, starting on the fourth business day in February 2004, Ginnie will also make these new disclosures...

CSFB revamps mortgage unit once again.
December 15, 2003... After hiring a law firm to investigate perhaps $80 million of losses in its mortgage trading division, Credit Suisse First Boston immediately moved to reorganize its operations with the appointment of three mortgage executives - Andrew Kimura,...

Enjoy the carry while you can.
December 15, 2003... As the year draws to a close, a big concern for MBS investors is the likelihood that strong economic data might result in rapid Fed tightening - an event not expected to bode well for the mortgage sector. In this instance, mortgages will most...

MBA Refinancing Index drops 16%.(Mortgage Bankers Association)
December 15, 2003... The Mortgage Bankers Association (MBA) Refi Index dipped to 1775.5 for the week ending Dec. 5, a 16% decline versus the prior week's holiday-adjusted level of 2100. The drop in the Refi Index was most likely related to the rise in weekly...

Argentina pension funds get fickle, but securitizations flow strong.
December 15, 2003... In Argentina's domestic market, the stream of consumer and export-related deals flows on. Companies in both sectors have benefited from the economic revival and are cashing in on ever cheapening rates. But this brighter picture has its...

More Brazilian companies flex borrowing muscle via funds.
December 15, 2003... At the close of 2002, receivables investment funds in Brazil were no more than a gleam in the eyes of bankers and analysts. Hopeful that the vehicle's tax perks would draw originators, players for months preached the virtues of the so-called...

Sofoles seen pairing but Fincasa goes solo.(Brief Article)
December 15, 2003... Mexican players say the first-ever MBS issued jointly in early December by housing finance companies GMAC Hipotecaria and Su Casita opens the door for smaller originators to similarly pair up. "I think we're going to see some couplings next...

A slowdown in RMBS issuance in 2004 leaves the door open for esoterics.
December 15, 2003... Even those who were most bullish on the RMBS sector at the start of 2003 were surprised by the actual volume that poured into the market this year. At the halfway mark, several investment houses revised their full-year predictions to account...

Europe gets ready to end '03 with a bang.
December 15, 2003... The European pipeline is finally taking a breather, though, with just two weeks left, there's still an estimated E15 billion (US$18.2 billion) of new issues ready to print. Total supply in 2003 should surpass the E180 billion (US$218...