Asset Securitization Report articles from February 2002

Asset Securitization Report archives from February 2002

MBIA mulls keeping ANC deals alive.
February 4, 2002... In what may be a first for the ABS market, MBIA has considered keeping ANC Rental Corp.'s securitizations afloat, sources indicated, rather than winding the deals down as was initially expected when the company filed for Chapter 11 bankruptcy...

Islamic ABS takes off in Malaysia.
February 4, 2002... Perhaps kicking off a wave of future deals, Islam recently saw its first securitization, $150 million in Sukuk (trust certificates) and Al Ijara (leases) from Malaysian agricultural conglomerate Kumpulan Guthrie Berhad. The deal was...

Ford unveils floorplan conduit.
February 4, 2002... Last Monday Ford Motor Credit closed the first-ever extendable ABCP program, backed exclusively by revolving wholesale floorplan loans, in tandem with a short-term note issuance vehicle dubbed "Motown", which refers to the issuer's Detroit...

Whispers.
February 4, 2002... People John Principe has been named managing executive of First Union Institutional Trust Services, a move that follows the merger between First Union and Wachovia. Principe, a senior vice president and 30-year veteran in the custody and...

Welcome to Arizona: New trade group to be rolled out at IMN event.
February 4, 2002... It's that time of the year again - securitization professionals from around the world are taking a two-week excursion to the desert to attend the back-to-back ABS conferences, IMN/Fabozzi's ABS West 2002 and SRI's Asset Securitization...

A nifty trade: use CDS to exploit corp./ABS spread differential.
February 4, 2002... The unusually narrow gap between unsecured corporate and ABS spreads has Salomon Smith Barney researchers Peter DiMartino and Mary Kane noticing a unique profit-making play - exploiting the disproportionate correlation in spread movements for...

Student-loan sector yet to see supply, but fundamentals healthy.
February 4, 2002... Things look good in the student-loan sector of the ABS market following the recent passage of a bill that fixed lending rates, preventing a plan that was meant to reduce private education lending. There have also been two first-time issuers...

CDO roundup: Slow January promises busy February.
February 4, 2002... The week leading up to the IMN conference saw only one CDO price as of Thursday, although the Credit Suisse First Boston "CDO sausage factory" (as one German investor client dubbed it) had its sights set at printing another structured finance...

Canada tax law changes to spur cross border growth.
February 4, 2002... The Canadian/U.S. cross border market could benefit substantially from the potential dissolution of a current withholding tax, where the Canadian government charges between 10% and 25% on interest and rent paid to non-residents, according to...

Increased average loan size is seen in home-equity pools.
February 4, 2002... As noted in recent UBS Warburg research, average loan size in subprime home-equity pools, both fixed- and floating-rate, increased substantially in 2001, up 25.2% to $91,836 from $73,339 on the fixed-rate side, and up 23.6% to $143,686 from...

CDO Combination Securities: Putting The Pieces Together.
February 4, 2002... By Glen McDermott, head of global structured bond research, Terry Benzschawel, and Adrian Lui, of Salomon Smith Barney Because the multi-tranched investment structure of a CDO may not be flexible enough to address the objectives of some...

January closes out with slower week, market thinking of Az.
February 4, 2002... A record-breaking month of January came to a close last week, as the market priced just under $3 billion, wrapping up a $24 billion month of new-issue supply. This bests January 2001, which had a then-record $23.4 billion, a significant...

New CDO portfolio drill-down product to spur secondary trading.
February 4, 2002... DM Partners and FCS, a leading supplier of analytics to approximately 50 CLO collateral managers, have partnered to launch a Web-based analytics platform, the latest in a steady trickle of new products competing for investors' favor, as market...

Aon's Private Equity Coup: Insurer's $450 million securitization puts investments to work.
February 4, 2002... Private equity has become the place not to be seen. The market is flooded with assets, and the prospect of selling into a buyers' market at a discount of anywhere up to 25% is about as appealing as root canal treatment. The fact that many...

First Republic rides out the real estate cycle with low losses.
February 4, 2002... Known for being an originator of high-quality jumbo mortgage loans and for focusing on high net-worth clients, three-time MBS issuer, San Francisco-based First Republic Bank, continues to maintain an impressively low loss record. "We try...

MBS Roundup: With better selling seen, mortgages remain favored in week of active two-way flows.
February 4, 2002... Flows in mortgages last week were mixed. Prior to the Federal Open Market Committee announcement, the sector experienced better selling from originators and money managers. Fifteen-year MBS made up about 30% of mortgage banker supply, while...

Ginnie Mae prepayment speeds: Why so slow?
February 4, 2002... With recent Ginnie Mae prepayment speeds considered to be slow (as compared to conventional production), Street analysts are looking at what is causing Ginnie's snail pace. Some sources have pointed to the fact that the continued evolution...

Fitch warns investors about last-ditch sale/leaseback financings.
February 4, 2002... With the onslaught of corporate downgrades, it is becoming more difficult for some firms to get traditional financing. In a last-ditch effort to obtain funding, some of these corporations have turned to sale/leaseback transactions. After...

Looking down the barrel of a loaded gun: Argentine asset-backed deals on the brink of default.
February 4, 2002... The Argentine sting that has been festering and taunting investors over the last several months will likely begin to bleed as early as next month as some deals, especially those tied to multilateral insurers, have begun dying a slow death. ...

Quiet primary European ABS pipeline highlights secondary storm: Value found in Italian and Dutch deals.
February 4, 2002... A timid European primary ABS pipeline highlights good buys from a secondary perspective, said market sources. The best bet right now lies on the side of consumer-related products with competitive bids for Dutch RMBS and Italian state ABS. ...

Citigroup pulls in third yen royalty-backed deal for 7-Eleven.
February 4, 2002... 7-Eleven, Inc. completed its third yen-denominated securitization via Citigroup Corporate & Investment Bank in December. According to Citigroup, the 10 billion ($74.3 million) royalty-backed future flow provides cost-effective funding and...

Lease-backed ABS set pendulum swinging in Italy.
February 4, 2002... The dormant Italian ABS market just barely saw some deal action last month. The slow start in primary issues was jumpstarted by repeat Italian-based issuer Biella Leasing, which launched its EURO199 million ($171 million) deal, Secursel 2, at...

KfW maintains focus on SMEs.
February 4, 2002... With its 2001 group balance-sheet figures up to EURO246 billion ($192.5 billion) from the previous year's EURO224 billion ($211.4 billion), Kreditanstalt fur Wiederaufbau (KfW) plans to continue with its initiative of securing long-term funding...

First Permanent launches fourth high-LTV deal into Australian market, a "Devine" transaction.
February 4, 2002... First Permanent Financial Services has originated its first mortgage securitization which securitizes mortgages with loan-to-value ratios (LTVs) of up to 100%. First Permanent Securities Mortgage Trust 2001-1 issued A$45 million (U.S.$22.8...

Japan's Orico launches first international non-bank card deal.
February 4, 2002... Clare Special Purpose Vehicle has launched a consumer-finance securitization worth the equivalent of 60 billion (U.S.$446 billion), via lead manager Mizuho Securities. Orient Corp (Orico) originated the deal, the first international...

MBS on the horizon in Taiwan.
February 4, 2002... The Executive Yuan of Taiwan is drafting a bill enabling the securitization of real estate. The cabinet has instructed its finance committee to complete the draft within six months, so that it can be submitted to the legislature. The draft...

Whispers.
February 11, 2002... People Mirja Wenski, deputy head of structuring and investment at Bankgesellschaft Berlin, will join ZAIS Group this month to work as a portfolio manager in Dublin. Wenski will report to John O'Grady Walshe, the former head of BGB's...

IMN lands largest U.S. crowd ever...
February 11, 2002... PHOENIX, Ariz. - More than 2,100 securitization market participants gathered last week at the Arizona Biltmore for IMN/Fabozzi's Seventh Annual ABS West event. This week's follow-up from Strategic Research Institute is expected to carry...

Enron critics target ABS.
February 11, 2002... PHOENIX, Ariz. - The impact on securitization of Enron Corp.'s failure is ultimately unknowable, but is slowly revealing itself, according to industry sources concerned with the contagion. One source at the ABS West conference confirmed...

Fed eyes Ginnie Mae MBS... again.
February 11, 2002... A recurring rumor surfaced again last week after a senior Federal Reserve official reiterated the possibility that the Fed is looking into adding Ginnie Maes to its own account, the System Open Market Account (SOMA). Ginnie MBS strengthened on...

Ford pushes Motown ABCP liquidity backstop down to zero percent.
February 11, 2002... Following the successful reception of the new Motown dealer floorplan conduit and issuance vehicle from Ford Motor Credit, the issuer plans to take the uniquely low liquidity backstop even lower, sources close to the situation confirmed. ...

Monoline wraps to become less common in HEL, says S&P.
February 11, 2002... PHOENIX, Ariz. - With the growing popularity of net-interest margin securitizations and an increasing demand from CDO managers for subordinated HEL paper, monoline-wrapped offerings are expected to decrease in the near term, said Tom Warrack,...

TRUPs, managed synthetics lead new CDO asset classes.
February 11, 2002... PHOENIX - New CDO products are expected to grow rapidly in 2002, outpacing the traditional assets backing the instruments, according to Chris Ricciardi, managing director at Credit Suisse First Boston, who spoke at the "New CDO Products" panel...

Subordinate triple-A CDOs ravaged by rating agencies: two nine-notch drops in two weeks.
February 11, 2002... Looking back on the past two weeks, one might think triple-A arb cashflow HY- bond CDOs in the 1999 vintage appear under siege by the rating agencies: at least 11 tranches across seven transactions saw their triple-A wings clipped between...

Trends and Developments in the Canadian ABS Market.
February 11, 2002... By Martin Fingerhut, a partner at the law firm of Blake, Cassels & Graydon LLP, Toronto, Canada After experiencing a period of breakneck annualized growth exceeding 50%, 2001 saw the Canadian ABS market pause to catch its breath. Total...

A rough ride ahead: More defaults in consumer loans.
February 11, 2002... PART I: ABS market suffers a record number of downgrades in 2001 There is an old saying in the asset-backed securities market that was once a rallying cry but has recently become more of a haunting mantra: "Good assets in good times fare...

Global CDO Volume Outlook: Cash & Synthetics.
February 11, 2002... By Lang Gibson, Director of Research, Structured Credit Products, Banc of America Securities The year 2001 will go down as the first real test period for structured credit products, particularly those backed by corporates. Although...

It's back into ARMs for many consumers...
February 11, 2002... With adjustable-rate mortgage rates benefiting from a steep yield curve, consumers are showing increased interest in applying for ARMs as opposed to fixed-rate mortgages, and that rising interest is reflected in the issuance projections for ARM...

CMBS: January was a banner month for commercials.
February 11, 2002... The CMBS world has been lulled during a rather quiet week, with spreads holding within expected ranges. The new-issue calendar is holding two issues for pricing in coming weeks, and outside of that it looks like March might be the next...

MBS Roundup: Prepayment speeds slow in January, further slowing expected in February.
February 11, 2002... For the most part, mortgage activity was steady and two-way last week. At times, the market was weighed by originator selling and profit taking, especially when Treasurys were firm. However, the spread widening that resulted attracted...

RMBS still the largest asset class in European ABS.
February 11, 2002... As the European structured finance market matures it is becoming evident that asset-backed securitizations are quickly catching up to residential mortgage-backed securities (RMBS) in terms of volume - but the pace is not fast enough to beat...

Argentina's new bankruptcy law: just another blow to investors.
February 11, 2002... A newly proposed Argentine bankruptcy law aimed at helping ailing companies may actually exacerbate investor losses on Argentine bonds, sources say. In an attempt to save struggling companies, the government is desperately searching for a...

Mexican ABS deal nears default.
February 11, 2002... A structured transaction from Mexican-based steel company Ispat Mexicana SA de CV (Imexa), a subsidiary of Ispat International NV (Ispat), is on the brink of default. The future-flow transaction, Imexa Export Trust 1996-1, was originally...

The customer is always right: U.K. ruling favors borrowers in ongoing dispute over unfair lending practices.
February 11, 2002... A recent ruling by the Financial Ombudsman Service - a British regulatory body set up by law to help settle individual disputes between consumers and financial firms - may have set borrowers one point ahead in their ongoing dispute with lenders...

Japan cleans house, using securitization to rid banks of bad loans.
February 11, 2002... In an attempt to encourage Japanese banks to rid themselves of bad debt, the Japanese government is bringing its first non-performing loan securitization to market in which it will act as both trustee and servicer. Marking the first time...

First Aussie CMBS launches with no terrorist insurance: Diversification mitigates terror risk.
February 11, 2002... ING Office Fund has launched the first commercial mortgage-backed securitization of the year, and it is the first CMBS deal in the Australian market to carry no terrorist insurance on the underlying real estate. The A$408 million deal...

SIVs continue to evolve: Rathgar launches new vehicle.
February 11, 2002... Rathgar Capital Management (Bermuda) Ltd. has set up a structured investment vehicle (SIV). It is the first SIV with an investment manager outside the United Kingdom, and one of the first SIVs that can sell capital as well as senior debt into...

Whispers.
February 18, 2002... People Adam Tashman, a Merrill Lynch CDO researcher, has landed at Patriarch Partners, after a reshuffling at the investment bank. Patriarch is part of FleetBoston Financial Corp. and is known for its Ark CLO I, a first-of-its-kind...

SRI conference praised for top-notch content, focus on substantive issues.
February 18, 2002... Scottsdale, Ariz. - Strategic Research Institute's Asset Securitization 2002 Symposium kicked off seamlessly last week, and remarkably well-attended: the tone being a mix of humor and (not surprisingly) market optimism, despite the industry...

Broncos finance stadium via ABS.
February 18, 2002... Scottsdale, Ariz. - Chief Financial Officer of the Denver Broncos, J. Allen Fears, sat on a panel last week led by John Molloy, of Fleet Securities, entitled Rights-Backed Securitization for Sports, Entertainment & Media at Strategic Research...

ABS: In or out of the Wild West?
February 18, 2002... While a large component of the securitization community spent the last two weeks in tumble-weed country, attending either of the two annual Arizona-based conferences, the whole world has gone to hell, so to speak. By that, we are referring to...

The "What if's" in ABS CDOs.
February 18, 2002... PHOENIX, Ariz. - The remarkable growth in ABS CDOs and its impact on the market was a consistent topic of discussion at the Arizona conferences. Interestingly, it was only the year prior that those conference panelists, particularly...

Barclays nabs first lead mandate for an auto deal, looks for more in 2002.
February 18, 2002... Barclays Capital celebrated its first-ever lead mandate for an auto loan deal last week, bearing the fruit of last year's hiring away of three bankers from Salomon Smith Barney. AmeriCredit priced $1.6 billion of subprime retail auto...

JPM launches index-linked CBO.
February 18, 2002... J.P. Morgan is hitting the ground running in 2002 with a cutting edge $7.3 billion notional, 5.25-year bullet, synthetic investment-grade CDO linked to a Moody's Investors Service index of 2,088 corporate entities rated Baa3' to A1'. Moody's...

USA Ed to boost issuance in the future.
February 18, 2002... Scottsdale, Ariz. - During a panel at Strategic Research Institutes' Asset Securitization 2002, it was announced that Sallie Mae/USA Education, as it privatizes itself, will substantially increase its ABS issuance over the next four years. This...

ACA gives mandate to CSFB for SF CDO in first half.
February 18, 2002... ACA Management is well under way with its plans to issue five to six CDOs, mostly investment-grade, per annum, according to senior company officials. The firm, created in 2001, closed a $1 billion notional pure synthetic managed...

CIBC launches balance-sheet CLO.
February 18, 2002... Two months after CIBC closed its first visible balance-sheet synthetic CLO, the bank is preparing to launch a second $1 billion-area deal within the next couple of weeks, once again seeking regulatory capital relief. Rating agency sources...

Eureka issues MTNs for liquidity relief.
February 18, 2002... Scottsdale, Ariz. In the ongoing quest to reduce liquidity requirements, Citibank's Eureka Securitization Inc. has been re-tinkered to issue medium term notes (MTNs), the first of which will be sold by the end of the month, according to...

Market takes off following conference.
February 18, 2002... The U.S.ABS market shot better than par in post-conference primary trading last week, pricing $5.2 billion amid continued spread tightening in most sectors. Supply came from the auto loan, credit card and home-equity sectors of the market, and...

Investors ponder ABS relative value in the new economy.
February 18, 2002... For many market participants at the recent IMN/Fabozzi ABS West conference - especially investors - the issue of avoiding more blowups and finding relative value in a continually tightening ABS market took primacy over other topics. ...

A rough ride ahead: More defaults in consumer loans.
February 18, 2002... PART II: Is the sky falling... or is it just tiering? Despite all the ink spilled during the last two months regarding record downgrades, defaults and delinquencies, many ABS veterans contend that the market is not entering new territory,...

Corporate woes promote more CMBS buying.
February 18, 2002... With conferences at both ends of the country over the last week or so, commercial mortgage activity has been conspicuously quiet. Secondary market flows were limited to just a couple of bid lists, most notably a $250 million triple-A list....

Nonprime mortgage default index steady as it goes.
February 18, 2002... The risk of defaults relating to newly originated nonprime mortgages is holding steady despite negative economic conditions, according to the most recent Nonprime Mortgage Report (NMR) Default Risk Index for Winter 2002. This quaterly...

Housing still robust despite fourth quarter dip.
February 18, 2002... With the economy expected to rebound in the second half of this year, home sales are also expected to go back up to near-record or record levels during this time period, said economists at the National Association of Realtors (NAR). But...

With originator pipelines cleared, can the market expect another round of refinancings?
February 18, 2002... With originator pipelines much more cleared than they were late last year, MBS analysts are expecting shorter lag times for refinancings and quicker reaction times to low-rate environments. Having the pipelines cleared means higher short-term...

CMBS delinquencies trend up, Merrill Lynch says.
February 18, 2002... As expected, the delinquency rate on CMBS conduit deals has gone up in January, according to a recent report by Merrill Lynch. The uptick that was seen over the last month is part of a continuing trend that heated up post-Sept 11. According...

New Argentine regulation may offer a glimmer of hope.
February 18, 2002... A recent regulation from the government of Argentina that lifts payment restrictions to multilateral institutions may put the onus of timely payments to investors back onto private companies, rather than the government itself. While the...

Italian INPS deal won't cause any angst.
February 18, 2002... It no longer looks like the Italian SCC INPS transaction will be causing further problems, as was previously suspected based on a 25% fall in collections at the last reporting period, which covered collections from August 2001 to October 2001....

Secondary liquidity freezes for European esoteric classes.
February 18, 2002... While the European primary ABS market for vanilla issues has been quite healthy, analysts say that esoteric asset classes have suffered in the secondary markets - with nearly frozen secondary trading on these deals. "Primary issuance [of...

GMAC-RFC expands its business further into continental Europe.
February 18, 2002... GMAC-RFC Europe Ltd has extended its European focus to include the French and German markets. And while the scope of its efforts in this preliminary stage will be limited to brokering mortgages, the depth of these growing markets is certain to...

Greek ABS to enter the private realm.
February 18, 2002... The growing privatization of many publicly owned Greek companies may encourage these corporate entitities to turn to securitization as a means of diversifying their funding base, thereby expanding Greece's securitization repertoire beyond just...

Whispers.
February 25, 2002... News Banc of America Securities was readying a $100 million commercial trade receivables term deal for Food Services of America, a subsidiary of Services Group of America. The receivables are generated by three of SGA subsidiaries, which...

Market bewildered by timing of Fitch action against Gordian Knot's SIV: Private negotiation is suddenly played out in the public arena: Is it all a misunderstanding?
February 25, 2002... Structured investment vehicle investors, as well as Standard & Poor's and Moody's Investors Service, have been increasingly perplexed over the timing of Fitch Rating's recent decision to place the long- and short-term ratings of Gordian Knot...

WSJ article attacks "Fan and Fred".
February 25, 2002... Last Wednesday's Wall Street Journal editorial, entitled "Fannie Mae Enron?" - which claimed that Fannie Mae and Freddie Mac's risk management techniques, like those of Enron, appear to be "rather frisky" - had no great impact on MBS flows,...

Equity investors scrutinize ABS.
February 25, 2002... In more Enron Corp. backlash, reports surfaced last Wednesday that Circuit City's stock price was being negatively affected because, among other issues, equity investors were concerned with the company's use of securitization as a funding...

Calpoint deal downgraded a la Qwest.
February 25, 2002... Last week Moody's Investors Service downgraded Receivables Structured Trust 2001-Calpoint to Baa2 from Baa1, based on the corporate downgrade of Qwest Communications, which had guaranteed cashflows of the transaction. That deal, which...

Banc One, Merrill say: attack investor reporting, not ABS.
February 25, 2002... In light of the recent challenges to the securitization markets, prominent researchers from various firms have embarked on a wave of retaliation, pointing out that many of those aligning the ABS market with Enron do not fully understanding the...

Top-tier issuers see strong demand as $3.3 billion prices.
February 25, 2002... The U.S. ABS market was led last week by a trio of top-tier issuers, as sector benchmarks Sallie Mae, Saxon and MBNA all brought deals. As has been the case early this year, investors have had a strong bid for leading issuers, as deals priced...

Emerging market CDO flow picking up.
February 25, 2002... Despite Argentina's recent plight, including a sovereign default and currency devaluation, several CDOs backed by emerging market sovereign and corporate debt are underfoot. But don't expect the flood gates to open: "Maybe we'll see six to...

CP refusing issuers is a boost for ABCP.
February 25, 2002... The trend of companies moving from the unsecured corporate CP market to the ABCP market has accelerated lately, driven by recent headline risk and the increased tiering from in today's skittish investor community. Cited from Credit Suisse...

Correction.
February 25, 2002... The ASR New Issues Guide wrongly reported that the only credit card deal in October came from MBNA America Bank, when in actuality, Metris Companies priced a $500 million bankcard deal on Oct. 11, making it the first credit card deal in...

ABS players take the plunge...
February 25, 2002... While most relationship-building activity at the recent Arizona conferences centered around client dinners and nights out at Christie's Cabaret, some chose off-the-run activities for bonding. For example, mega-issuer GMAC-RFC and the...

Business-loan sector evolves in 2002, more deals expected.
February 25, 2002... The number of securitizations in the "business loan" sector is expected to nearly double this year, up to as many as 10 deals from the five seen in 2001, according to a consensus of panelists at the recent securitization conferences in Arizona....

CDOs of CDOs only offer debt classes single-A and up.
February 25, 2002... A handful of deals backed by mezzanine CDO tranches are currently in the market, two of which structured with no triple-B or double-B debt classes, typically the most difficult to sell in an a CDO-of-CDO - especially of late, as there seems no...