Asset Securitization Report articles from February 2004

Asset Securitization Report archives from February 2004

Whispers.
February 2, 2004... Maxim Group LLC has hired Barry C. Mohr as a managing director and senior product manager, where he will focus on distressed corporate and private placement debt in the new institutional fixed-income sales and trading group. He joins from...

A reversal of fortunes: Immediate impact seen from revised accounting rules.
February 2, 2004... What a year it was for BlackRock Inc., which consolidated six CDOs onto its balance sheet in September - with assets and liabilities increasing more than $2.5 billion - only to lift it all back off in January following the revision to Financial...

Despite HELs rally, value remains.
February 2, 2004... Even though the home equity and mortgage sectors of the securitization markets have experienced dramatic tightening since 3Q03, there is still room for appreciation in 2004, depending on where investors place their bets. In a pair of conference...

Lenders brace for rising interest rates.
February 2, 2004... SCOTTSDALE, Ariz. - Rising interest rates, the emergence of so-called "Alt-B" mortgage collateral and changing borrower characteristics were all key subjects during last week's "Mortgage Update" panel at the American Securitization Forum's ASF...

Court ruling threatens legality of tobacco MSA.
February 2, 2004... A recent decision from a New York appellate court could cut into cash flows supporting the state's tobacco bond deals, according to a report from Moody's Investors Service. The ruling calls into question the legality of New York state laws...

Large HEL ABS beefs up otherwise slow U.S. ABS market.
February 2, 2004... In the midst of the winter ABS conference season, primary activity slowed last week. The presence of several large offerings, however, kept volume levels respectable. Through last Thursday, the U.S. ABS market had priced $8 billion, with an...

First CDO deal wraps up pre-conferences, while Banc One ramps up a first.
February 2, 2004... A high yield CLO takes the prize for being the first visible U.S. CDO issuance to price in 2004. Sources report Light Point I, a $409 million arbitrage cash flow vehicle, priced in line with spread talk last week. Underwritten by Links...

ASF 2004 kicks off with respectable turnout.
February 2, 2004... For a new kid on the ABS conference block, the American Securitization Forum (ASF) did well for itself as a solid showing flocked to attend ASF 2004, held last week at the Fairmont Scottsdale Princess in Scottsdale, Ariz. In fact, organizers...

Will new players change the student loan sector?
February 2, 2004... The recent trend of capital infusion to the student loan sector, though positive, presents risks, said panelists at American Securitization Forum's ASF 2004 conference last week. After significant capital departure, student loans have...

Panelists discuss how CDOs have weathered change.
February 2, 2004... In the past year, unprecedented downgrades of senior CDO tranches caused many investors to ask: Does a triple-A rating imply less volatility? Rating agencies have typically said no, though there is perhaps agreement that triple-A ABS has...

Panelists ask: Do market participants make the grade?
February 2, 2004... With the recent volatility in the asset-backed market, investors - who get hardest hit when the going gets tough- should let their voices be heard louder, said participants at the "Investors' Perspective" panel at the American Securitization...

CSFB sells first Oakwood MH re-REMIC.
February 2, 2004... The $1 billion manufactured housing portfolio that caused the Federal Home Loan Banks of New York so much trouble late last year - prompting a $169 million loss - resurfaced recently in a $252 million shelf offering from Credit Suisse First...

MBNA/AmEx alliance, Cap One compliance and CompuCredit prices in silence.
February 2, 2004... It was an exciting week of news in credit cards, as five high-profile issuers made the headlines in one way or another. Top-tier card issuers American Express and MBNA America Bank announced a first-of-its kind alliance. Former top-tier issuer...

Supply-induced spread widening attracts some buyers.
February 2, 2004... Last week's mortgage activity was mixed. Originator supply averaged $1.5 billion, less than the $3 billion per day that was expected. At the same time, episodes of widening - from supply or the FOMC surprise - attracted a variety of buyers....

Pari Passu notes the latest CMBS structural development.
February 2, 2004... The use of pari passu notes as a means to dilute the risk associated with single-asset CMBS transactions has become standard practice for large trophy properties, though it raises questions about who controls these loans should they default, as...

MITA responds to FSA designs, looks to a new era in mortgage insurance.
February 2, 2004... The Mortgage Insurance Trade Association (MITA) recently submitted its commentary concerning the Financial Services Authority (FSA) Consultation Paper 189 (CP 189), which was released last year. CP189 outlines the FSA's plans for implementation...

RMBS spreads at all-time low over the past weeks in Europe.
February 2, 2004... U.K. RMBS issuance continues to price tightly in heavy demand, setting historical lows for the sector benchmark yields, say industry sources. Spreads are expected to continue tightening, according to JPMorgan Securities, fueled by strong...

Mexico takes baby steps to REITs.
February 2, 2004... Provisions in Mexico's new fiscal law could spell the development of the REIT, or something analogous to the popular U.S. vehicle, sources said. While deeply entrenched to the north of Rio Grande, real estate investment trusts have yet to...

Despite fertile conditions, sparse field for Argentine commodity deals.
February 2, 2004... Two Argentine commodity-related deals are in the pipeline for February, but activity has yet to meet the high expectations kindled last year by the combination of a massive currency devaluation and shortage of financing alternatives. Some...

Petroflex might downsize; word on Brazil securitization group.
February 2, 2004... Talk is percolating that an FIDC for petrochemical producer Petroflex might be downsized. So far, investors have snapped up R$49.5 million worth of shares out of an initially planned volume of R$60 million. For the fund to issue more shares,...

Whispers.
February 9, 2004... Nichol Bakalar is no longer with Wachovia Securities. Bakalar, who joined Wachovia in mid-2002, was a director in the structured products group. She reported to group head Brian Lancaster. Before her stint at Wachovia, Bakalar was head of...

Bancomer shatters five years of silence.
February 9, 2004... Mexico's BBVA Bancomer apparently closed a US$300 million, seven-year deal just days before its Spanish parent company Banco Bilbao Vizcaya Argentaria formally bid on the 40% of the bank it doesn't own. Many players were skeptical that Bancomer...

Arizona concludes with a bang.
February 9, 2004... PHOENIX, Ariz - As many as 2,700 delegates showed up last week for Information Management Network's ABS West, the second round of winter ABS conference season, which has been a market tradition for roughly a decade. With the prior week's...

Market debates double-B HELs.
February 9, 2004... Throughout last year, the triple-B minus class became a routine feature in most mortgage-related ABS deals. Late in 2003, however, the real estate sector began dipping below the investment-grade Mendoza line, flaunting a double-B rated class....

Pre-conference workshop incorporates rate hike concerns.
February 9, 2004... Interest rate-sensitive assets are the focus of ABS investors these days, with most economic forecasts calling for an increase in interest rates sometime this year. For callable securities, the expected interest rate volatility may alter...

Potential first-time issuers flock to Desert Ridge.
February 9, 2004... Issuers are the bread and butter of the ABS industry, and drawing new collateral sources into the market means drawing new personalities - and their firms - into the securitization market. Last week's new issuer workshop, focusing on...

Researchers call for stability.
February 9, 2004... In Phoenix last week, panelists on the non-mortgage research roundtable agreed that 2004 will not likely be "the year of the home run," compared to the massive tightening in just about every asset class throughout last year. Instead of...

Is it still the role of the trustee?
February 9, 2004... If anything, the shakeups and bankruptcies impacting securitization over the last few years have proven that - like everywhere else on Wall Street - anomalies can quickly become trends. Be it Enron Corp. or WorldCom in the corporate world,...

Whole loan auto ABS brings new payment structure Concurrent pay brings extension risk for subs...
February 9, 2004... As auto lenders begin relying more heavily on favorable execution in the whole loan markets, investors are seeing more of an aggressive structure hit the sector. While the concurrent pay structure has obvious benefits to the issuer, it also...

Blackstone $1billion CLO scores 18-month ramp-up period.
February 9, 2004... The Blackstone Group wowed the structured finance world last week when it launched the largest CLO since 1998. At $1.022 billion, Monument Park CDO Ltd. is twice the size of most of the CLOs launched in the last four years. CLOs are...

Aladdin Capital taps market for first loan fund.
February 9, 2004... After wrapping up its Landmark III CDO less than two months ago, Aladdin Capital Manage-ment is busy in the market again, putting together its very first loan fund, which is expected to total more than $500 million. "After receiving...

Small balance CMBS picks up steam.
February 9, 2004... Interest in small balance CMBS - an area that has heretofore been largely neglected - is on the rise, according to buzz generated at last week's Mortgage Bankers Association conference in Buena Vista, Fla. Mary Metz, managing director at...

Slowing home price appreciation on the horizon.
February 9, 2004... With the home price appreciation driving higher turnover rates, mortgage participants have long considered the value of homes as a telling indicator of the state of the housing market. Aside from this, the degree to which house prices rise is...

Wait for employment report limits flows.
February 9, 2004... Last week was relatively quiet overall as investors waited for Friday's employment report. Originator selling averaged less than $1 billion per day, which held spreads in a narrow range. Investor activity was mixed with better buying seen early...

Boosted capital ratios don't stunt Freddie growth.
February 9, 2004... Even with the recent Freddie Mac announcement that the Office of Federal Housing Enterprise Oversight (OFHEO) is imposing a higher statutory minimum capital requirement, the GSE's portfolio growth is not expected to significantly slow in the...

Slow February in Europe but pipeline building.
February 9, 2004... The typically slow start to the year was replaced instead by rocketing RMBS activity in Europe. While the pipeline remained relatively stagnant during the first week of February, industry sources were already counting on a variety of deals...

U.K. soccer ABS faces wider exposure to relegation risks.
February 9, 2004... A new penalty system that penalizes clubs incurring out-of-control debt could further dampen appetite for U.K. soccer securitizations. The 20 clubs under the Barclaycard Premiership aim to implement a nine-point penalty system for clubs...

Mexico's Infonavit RMBS to depart from Su Casita/GMAC debut.
February 9, 2004... An accurate picture of an upcoming RMBS from Mexican housing agency Infonavit is coming into focus, based on information gleaned from a prospectus and from sources involved with the deal. In key features, it will differ from the market's first...

Moody's revises emerging market CDO approach.
February 9, 2004... Moody's Investors Service has revised its methodology on emerging market CDOs to reflect a more evolved view toward diversification in these countries. "There is greater confidence in the ability to diversify in emerging markets;...

Humbled Argentina, PRI makes friends again.
February 9, 2004... After falling out with more than a few buyside circles, political risk insurance (PRI) is back. Five bond deals since mid 2003 come with the policy and more are in the works, according to sources. While all of these are more corporate than ABS...

Whispers.
February 16, 2004... Moody's Investors Service has promoted Nicolas Weill to chief credit officer, a newly created role at the rating agency. Weill will be responsible for the constancy of rating decisions and methodologies within the group, as well as with other...

Hyper-tranching sparks rating variances.
February 16, 2004... Split ratings in ABS are not entirely unheard of. The hyper-tranching trend in mortgage ABS, however, has magnified the differences in methodologies, as enhancement is spread thinly out over the entire deal. In some cases, tranches are...

One's loss can be another's gain Distressed assets attract opportunistic buyers in Asia.
February 16, 2004... Nonperforming loan portfolios in Asia are selling cheaply, and some of those assets are expected to end up in securitizations eventually, bankers and analysts say. But most believe the potential issuers are likely to wait out the current...

SF CDOs brave historic tights.
February 16, 2004... With collateral spreads historically rich, some ABS CDOs might never make it through the starting gate, especially if nearing the end of their investment periods, industry sources said. At the very least, the market is less likely to see...

FASB to further refine 9(a).(Financial Accounting Standards Board)(Brief Article)
February 16, 2004... At last week's meeting, the Financial Accounting Standards Board seemed to favor not adding a requirement that a QSPE be used to achieve sale treatment in the transfer of "undivided interests" in financial assets, accounting sources said. ...

Credit risk manager issue pushed to forefront.
February 16, 2004... Thanks to a recent turn of events, what was just six years ago a start-up by the Murrayhill Co. is now poised to be a burgeoning industry within securitization. The Colorado-based credit risk manager has picked up considerable buzz since...

Strong week of supply/demand for autos.
February 16, 2004... The anticipated post-conference explosion in ABS new-issue supply lived up to its billing last week, pricing over $10 billion as of Thursday's close and nearly $3 billion slated for Friday. The auto loan sector finally came out of hibernation,...

One potential innovation left in CCABS.
February 16, 2004... Since de-linked issuance trusts radically changed the credit card sector three years ago, larger, more liquid tranches have led the card ABS to become increasingly corporate bond-like, with Citibank pricing a 12-year deal last year, aimed...

European CDO ratings trend slightly positive in 2003.
February 16, 2004... A positive credit trend occurred in European CDOs in 2003 compared to 2002, according to Standard & Poor's latest transition study. Despite a higher overall percentage of downgrades last year, analysts say the increased number of upgrades...

Industry group on road show with Bermuda: Future ABS hot spot.
February 16, 2004... A consortium of high-ranking bankers and lawyers are eagerly pitching the tax and legal benefits offered by doing business in the nation of Bermuda. Coordinated by the Bermuda International Business Bureau (BIBA), representatives from some of...

Mortgages tighten on light supply, better buying and Greenspan.
February 16, 2004... Mortgages benefited last week from very light supply - less than $1 billion per day on average - steady investor buying and favorable comments from Fed Chairman Alan Greenspan. Investor support came from a variety of account types including...

L.A. County loans fared well through downturn.
February 16, 2004... Los Angles County has proved a reliable bulwark against the rising delinquencies seen in CMBS backed by U.S. industrial properties during the past several years, according to Standard & Poor's research. As of late 2003, California...

Burnout in premiums hinder refinancing activity.
February 16, 2004... Analysts have identified burnout in seasoned higher-rate mortgages as a source of last week's drop in the Mortgage Bankers Association (MBA) Refinancing Index. In a report, Countrywide Securities said seasoned high coupons usually...

Fannie offers 5% down MH loans.
February 16, 2004... Fannie Mae announced last week that it is working with nine lenders to "transform" the manufactured housing sector. A key goal would be to offer 30-year manufactured housing loans with down payments as low as 5%. In related news, GMAC-RFC...

Planned fund of FIDCs underscores high faith in Brazilian structure.
February 16, 2004... There's a new faith in Brazil and it has nothing do with the annual Carnaval ritual that peaks next week. Receivables investment funds (FIDCs) are on the lips of every structured banker in Sao Paulo, though the volume of closed deals remains...

In Mexico, asset pools seen beckoning smaller municipalities.
February 16, 2004... States and municipalities in Mexico tripled their volume of securitization issuance in 2003 from 2002, to Ps8.1 billion (US$739 million) (see table, p. 21). Activity will creep higher this year, though its pace is unlikely to hold, sources...

Ariztia hatches first accounts receivables deal in Chile.
February 16, 2004... The Chilean market has started 2004 with a new asset. Last week, Banchile Securitizadora closed a Ps6.35 billion (US$11 million) deal backed by accounts receivables. The originator was Ariztia Comercial, a food company that specializes in...

EU directive could dictate use of IAS for U.S. companies.
February 16, 2004... The European Union is on a fast track to implement a new transparency obligation directive that would require the more than 600 U.S. securities firms trading on EU exchanges to adapt to new guidelines from the International Accounting Standards...

Conclusion on the latest changes to IAS 39.
February 16, 2004... The IAS 39 standard applies effective Jan. 1, 2005; and the EU requires that all EU exchange-listed companies use IAS for the year ending December 2005. According to Merrill Lynch: * The IAS 39 standard is like FIN 46 in the U.S., a...

Steady volume holds in Europe: New issues continue to see strong demand in the European marketplace.
February 16, 2004... The euro market crave continues. The latest deal to ride the wave of buyside interest was Kensington Mortgages RMS 17. Kensington was oversubscribed and increased by GBP200 million (US$377 million) to GBP340 million (US$642 million), and priced...

Whispers.
February 23, 2004... With a recent research report, Standard & Poor's is the latest to throw its hat into the correlation risk arena. In a special report entitled Loss Correlations Among U.S. Consumer Assets, S&P looks at both the correlation risk between asset...

Railcar leases from three countries back Top Cat deal.
February 23, 2004... The Andersons Inc., an Ohio-based agribusiness, raised roughly $86.4 million through a railcar lease securitization. The deal funds the acquisition of three fleets of railcars operated in three countries - Mexico, Canada and the U.S. - by three...

Saudi auto fleet deal debuts.
February 23, 2004... For some time now the securitization market has looked hopefully to the region governed by the Gulf Cooperation Council (GCC) - which includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates - but the absence of...

Tobacco lights up in Argentina.
February 23, 2004... Taking up the torch of export-related issuance in Argentina, a leading tobacco processor funds this week. The one-year, US$12.4 million deal might lend some heat to a sector that's gone cold over the last few months. The country's largest...

Deal focus: BNP finances 90% of Camber via conduit.
February 23, 2004... Starbird Funding Corp., an ABCP conduit sponsored by BNP Paribas, financed $900 million of the $1 billion Camber I ABS-backed CDO that priced on Jan. 31, according to market sources. BNP Paribas is underwriter on Camber I, with collateral...

New faces seen in Moody's Latin America group.
February 23, 2004... The Latin American wing of structured finance ratings at Moody's Investors Service has picked up three hires since November, two in New York and one in Sao Paulo. Victoria Moreno returned to the agency as an assistant vice president...

Holiday-shortened ABS week sees $8 billion.
February 23, 2004... New issue volume totaled just $7.9 billion in last week's holiday- shortened trading week, but demand - particularly for auto loan ABS - remains strong. Spreads for the two retail auto loan deals to hit last week cleared in the low single-digit...

Glacier causes spread shrinkage in CDOs.
February 23, 2004... Following a last-minute adjustment, the $296 million Glacier CDO I pushed the spread boundaries for structured finance-backed CDO product, sources said. The deal's 4.1-year $190 million super-senior tranche priced at 41 basis points over...

FTN with second federal credit union ABS.
February 23, 2004... First Tennessee Capital Markets is shopping the second-ever auto ABS backed by loans originated and serviced by a federal credit union, sources confirmed. The deal, which pools loans from Security Service Federal Credit Union, is coming off of...

New Barclays research takes broad look at auto ABS.
February 23, 2004... Barclays Capital last week introduced the inaugural quarterly research piece titled The Smart Guide, focusing on characteristics of the 15 leading prime retail auto loan ABS issuers, which is expected to expand into the subprime arena issuers...

On the record with BLX, one of the last true small-business securitizers.(Business Loan Express)
February 23, 2004... Business Loan Express entered the securitization market in 1997 with a single issuance backed by portions of Small Business Association loans worth just under $20 million. In 2003, the issuer reached nearly $500 million in term ABS volume. ...

Unwinding of carry trade, the biggest risk of all.
February 23, 2004... The first Federal Reserve hike will probably trigger the unwinding of the MBS carry, an event that could lead to a major bear market-induced steepening, said Ifty Islam, head of U.S. fixed income strategy at Deutsche Bank. These remarks were...

Light two-way flows in quiet week.
February 23, 2004... Mortgage flows last week were relatively light reflecting the holiday-shortened session. Originator selling averaged less than $1 billion per day and was focused in 5s and 5.5s. For the most part, buyers were sidelined due to the rich levels...

Fannie experiences shrinkage, but analysts expect better months ahead.
February 23, 2004... Fannie Mae last week revealed that its mortgage portfolio declined by a 14.6% annualized rate, which follows a 10% annualized drop in January. "We believe this reflects a pickup in prepayment speeds as the 10-year yield dipped earlier in...

Freddie names hall of famers.(Federal Home Loan Mortgage Corp.)(Brief Article)
February 23, 2004... Freddie Mac announced last week that it had selected 26 mortgage servicers for its Tier One designation, as well as eight inductees into its Tier One Hall of Fame. Tier One status is granted to servicers that it recognizes for diligent investor...

Steep yield curve may make a difference in current housing turnover rates, says Lehman.
February 23, 2004... As refis die, turnover is the new story in MBS. Researchers are trying to pin down the factors driving speeds, particularly in discount prepayments. In its outlook for turnover rates, Lehman Brothers argues that the next real backup in...

CMBS outlook optimistic as calendar begins to grow.(Commercial Mortgage Backed Securities)
February 23, 2004... Despite declining figures recorded at year-end 2003, CMBS issuance is expected to flourish during the first half of this year with an estimated 2.98 billion (US$3.8 billion) slated. Deals should start to hit the pipeline over the coming month,...

February falls short of pace set previous month.
February 23, 2004... February issuance should fall behind the record-setting 15 billion (US$19 billion) in pricings during January this year, but this is no signal of an overall slowdown. Reports show that more than 10 billion (US$12.7 billion) is already expected...

Eurostat eases views on public private partnerships.
February 23, 2004... The European Union statistics agency Eurostat will adopt a more favourable view on assets securitized under public-private partnerships (PPP), making it possible for EU-governed countries to achieve some level of off-balance sheet treatment for...

Mexico's Fincasa makes market debut, Infonavit roadshow ends.
February 23, 2004... Mexican housing finance company Fincasa Hipotecaria paid its first visit to the market Feb. 18, pricing a Ps500 million (US$46 million), five-year deal backed by bridge loans for construction. The yield came to 152 basis points over three-month...

Issue of auto-loan fund and news of BASF deal beat Carnaval.
February 23, 2004... The arrival of Carnaval in Brazil typically lulls financial markets into a weeklong slumber. So this year domestic issuance won't resume until March, but players still had a few stories to tell before the party drowned them out. Boutique...