Asset Securitization Report articles from February 2006

Asset Securitization Report archives from February 2006

Whispers.(resignations)
February 6, 2006... Goldman Sachs is losing two of its top securitization executives - Joe Marconi, the co-head of the ABS finance group, and Eric Bothwell, the co-head of the CDO/CLO group. Market sources said it appears that Goldman will not hand those titles to...

ABCP issuance heads toward $1 trillion.(asset backed commercial paper )
February 6, 2006... Asset-backed commercial paper issuance could pass the $1 trillion mark in 2006 while outstandings are expected to increase 10%, according to an econometric model generated by Standard & Poor's and a recent survey of nine leading conduit...

ASF attendees vote at Vegas conference.(American Securitization Forum)
February 6, 2006... LAS VEGAS - Attendees at the opening session of the American Securitization Forum's conference last week were given the chance to express views on several industry topics by using handheld voting devices. In game show style, panel members at...

Synthetic CDOs ready for growth.(collateralized debt obligations)
February 6, 2006... Ironing out language-related wrinkles in credit default swap deal documentation along with last month's launch of a new U.S. ABS index means an obscure area of the CDO market may be ready for substantial growth. Volume is growing rapidly...

More CDO issuance, managers and turnover expected in '06.(Collateralized debt obligation)
February 6, 2006... LAS VEGAS - Additional CDO volume is expected this year compared with 2005, according to attendees at the ASF 2006 conference held here last week. About $155 billion of CDO issuance came to the market in 2005, according to United Capital...

Credit card ABS remains strong after bankruptcy reform, Regulation AB.(asset backed securities)
February 6, 2006... LAS VEGAS - After one of the most watched events in the credit card industry unfolded in the last half of 2005 with the implementation of the Bankruptcy Reform Act, credit card ABS performance appears to be holding up well and sources expect...

Industry speaks out on ABS CDS market at ASF 2006 conference.(collateralized debt obligations)(asset backed securities)(American Securitization Forum )
February 6, 2006... LAS VEGAS - This year's release of tradable indices for asset-backed securities credit default swaps - deemed the wild, wild West of ABS - is not only considered a turning point for the rapidly growing CDS of ABS sector, but is thought to be...

Upgrades outpace downgrades for CBOs, CLOs in 2005.
February 6, 2006... Thanks in part to a low default rate, 2005 was a strong year ratings-wise for collateralized bond obligations and collateralized loan obligations, according to a recent report by Standard & Poor's. Only two CLO tranches were downgraded and...

Continued private student loan ABS growth expected.(asset backed securities)
February 6, 2006... LAS VEGAS - The private student loan ABS market is expected to continue its growth in 2006. The skyrocketing cost of tuition, combined with the not-so-rapidly rising level of federal student loan maximums, is causing borrowers to...

Strong selling follows the FOMC's policy firming' statement.(Federal Open Market Committee)
February 6, 2006... Mortgage flows were mixed last week as the news featured a Federal Open Market Committee meeting, the Treasury Quarterly Refunding announcement and January non-farm payrolls. Volume was light at the start of the week as participants waited...

'REITing' the signs reveals more RMBS to come.(Real estate investment trusts)(residential mortgage backed security)
February 6, 2006... Mortgage REITs expect to remain active players in the asset-backed market this year, even with an anticipated decline in loan origination volumes. New Century Financial Corp. announced Thursday that it expects to resume executing...

Prepayment outlook key to MBS valuations.
February 6, 2006... LAS VEGAS - If potential mortgage-backed securities investors at last week's American Securitization Forum's ASF 2006 conference remember one word, it should be "pre-payments," according to Nomura Securities International director and head of...

Home price growth outlook positive.(Brief Article)
February 6, 2006... The December housing sales data was mixed with existing home sales showing a decline - to the lowest level since March 2004 - while new home sales rose nearly 3%. The conflicting data has raised some questions among analysts. Deutsche...

Are prime loans running on thin margins?
February 6, 2006... LAS VEGAS - While the specter of defaults and delinquencies across the lower ends of the home equity ABS credit spectrum disturb more than a few analysts and investors, some are beginning to shift their focus to the credit outlook of the prime...

ECB amends criteria for repo operations.(European Central Bank)
February 6, 2006... The European Central Bank has published amendments to its rules on money market operations that will increase the number of asset-backed securities eligible to be used as collateral for repo operations. The new rules, which are slated to go...

European market launches multicontributor index.(International Index Company)(iBoxx ABS-50 index)
February 6, 2006... The International Index Company last week officially launched the iBoxx ABS-50 index that will provide a benchmark for European triple-A rated paper and also hedge future spread direction. It's the first instrument that provides this...

January prices $13.2 billion worth of paper.(Brief Article)
February 6, 2006... Though January primary volumes in Europe closed at 11 billion ($13.2 billion), most of the activity resulted from the giant Northern Rock Granite transaction that accounted for almost 8.7 billion ($10.5 billion) of total issuance volume. ...

Swiss Re, AXA lead wave of innovation.(AXA Asset Management Europe)(Swiss Reinsurance Company Ltd.)
February 6, 2006... among European insurance deals A recent study led by the Group of Thirty - an international body that includes senior representatives of the private and public sectors and academia - found that insurers must more aggressively tune into...

MBIA's Mexican conduit casts wide net, perhaps like Meridian.(MBIA Inc.)(Banco de Bajio)
February 6, 2006... Mexico provided plenty of news last week to fill the lull in emerging markets chatter occasioned by the ASF conference in Las Vegas. Apart from action on the mortgage front, MBIA has been working on a conduit program registered with local...

Su Casita is diverted on first-time trip to straight peso RMBS.(residential mortgage backed securities )
February 6, 2006... Grinding toward a milestone in Mexico's mortgage sector, Su Casita appears to have hit a small detour. The originator was understood to be ready to float the private sector's first straight peso RMBS last week when state agency Sociedad...

Credito y Casa bites into fat portfolio for RMBS debut.
February 6, 2006... Despite its stature as Mexico's third largest mortgage originator in the private sector, Credito y Casa has kept RMBS at arm's length, letting its peers pioneer the business domestically over the last couple of years and limiting its...

Korea's SCFB, Samsung plan cross-border raids.(Standard Chartered First Bank)(Samsung Card)
February 6, 2006... Consumer credit provider Samsung Card and Standard Chartered First Bank - the South Korean arm of Standard Chartered - are likely to tap the cross-border ABS market in the first quarter, sources said. Samsung is rumored to have hired Royal...

AEON completes Thai card ABS.
February 6, 2006... AEON Thana Sinsap, the Thai subsidiary of Japanese consumer finance company AEON Credit Service, last week priced its third ABS. Citigroup Global Markets is handling the sale of the THB2.3 billion ($57.4 million) credit card offering, with...

Whispers.(appointments)
February 13, 2006... Late last week rumblings surfaced that Chris Ricciardi, the head of CDO orginiation and structuring at Merrill Lynch, has left the firm. When reached on his mobile phone, Ricciardi declined to comment, as did officials at Merrill. But talk on...

Russian bank said to issue RMBS deal.(residential mortgage backed securities )
February 13, 2006... Longing is an emotion romanticized in the renowned works of Russian literature, but not by time-pressured players of high finance stalking Moscow for deals. So chances are few of them will miss pining for a market-based Russian RMBS when...

ESF offers positive outlook for Europe.
February 13, 2006... The European securitization market is expected to expand 15% this year over the estimated volumes predicted for 2005, which could set year-end 2006 volume at 325 billion ($389.2 billion), according to survey results published by the European...

ABX.HE index may hurt CDO managers.(collateralized debt obligations)
February 13, 2006... PHOENIX - As an increasing number of investors are expected to pour into the still-green ABX.HE index, liquidity once focused on a wider array of issuer deals could begin to dry up on the single-name ABS credit default swap front, at least in...

ABS experts see drop in issuance this year.(asset backed securities)
February 13, 2006... PHOENIX - According to some asset-backed securities experts, issuance will be down about 10% in 2006, from record levels seen last year. Craig Platt, a director at Keybank, anticipates issuance volume will be flat in 2006 compared to the...

New legislation for student loans as ABS market thrives.(asset backed securities)
February 13, 2006... "The cost of tuition keeps rising at a faster rate than income or inflation," said Claire Mezzanotte, managing director at Fitch Ratings. While students may struggle, the student loan ABS market thrives, achieving record issuance of $73.3...

ABS West 2006 attendees discuss the future of the subprime sector.(asset backed securities)
February 13, 2006... PHOENIX - While subprime lenders try to recoup losses from declining mortgage origination volume, corporate belt tightening and industry consolidation could impact loan performance, according to attendees at last week's ABS West 2006 conference...

Supportive mortgage flows offset poor start in February.
February 13, 2006... Supportive flows during the first part of last week helped mortgages recover from a negative start in February. According to Lehman Brothers, the month-to-date excess return versus Treasurys for the MBS Index was a positive three basis points...

New York Mortgage Trust maintaining its standards as a REIT.(real estate investment trusts)
February 13, 2006... New York Mortgage Trust, which securitizes prime residential mortgages, is eager to stand out from other newbie issuers in its sector. Though it is a real estate investment trust, the company is unlike most REITs, being one of only four to...

Prepayment speeds miss expectations in January.
February 13, 2006... Prepayment speeds on 30-year FNMAs in January fell more than 20% from December's levels, versus consensus expectations of 15% to 16%. The decline was fairly uniform across both discounts and premiums. In comments from JPMorgan Securities,...

Borrowers chose equity in Q4, not lower payments.(Federal Home Loan Mortgage Corp.)(Brief Article)
February 13, 2006... Freddie Mac released its quarterly refinance review for the fourth quarter of 2005 last week and reported that 80% of Freddie-owned loans that were refinanced resulted in new mortgages with loan amounts at least 5% higher than the original...

FTN looks at the impact of an inverted yield curve on MBS.
February 13, 2006... With the market facing an inverted U.S. Treasury yield curve, analysts from FTN Financial examined the implications for the MBS market of a more severe inversion over the next three months. Analysts noted in a report that the U.S. Treasury...

Increasing rates expected to cut application activity.(Brief Article)
February 13, 2006... Mortgage application activity fell just 1% for the week ending Feb. 3, compared with the prior week despite an 11 basis point increase in the 30-year fixed rate. The Refinance Index was essentially unchanged at 1751, versus 1747...

MasterCard facing new investigation in U.K. regarding interchange fees.
February 13, 2006... The U.K. Office of Fair Trading launched a new investigation on Feb. 3, into the recently amended arrangements MasterCard uses for calculating interchange fees that apply to transactions made using its credit cards. On Sept. 6, 2005, the...

Greece securitization moves ahead without helping budget.
February 13, 2006... Greece got the green light last week for its 1.5 billion ($1.7 billion) securitization deal (see ASR, 11/28/05), but reiterated that it will not use proceeds from the transaction to bolster its 2005 and 2006 budgets. The deal could have...

European spreads at tight levels.
February 13, 2006... Primary pricing spread edged closer to the tight levels seen this time last year in Europe with issuance volumes almost on par with levels seen a year ago. A supply of 4.8 billion ($5.7 billion) kicked off last week with 7-year, triple-A...

Ireland's first CMBS reveals market's promise.(commercial mortgage backed securities )
February 13, 2006... Ireland's first-ever CMBS deal in January may not lead to a deluge of Irish CMBS, but it does signal this jurisdiction may be coming into its own as a securitization destination of choice. Eurohypo arranged the 375 million ($448 million)...

No shortage of activity in Malaysia, Japan, Philippines.(Penang Bridge Sdn Bhd.)(Landmarks Bhd.)
February 13, 2006... Details emerged last week regarding an innovative Islamic infrastructure securitization from Malaysia's Penang Bridge Sdn Bhd. The company in March will launch a M$695 million ($186.2 million) deal that will finance the widening of a 13.5...

Brazilian water company's deal to precede Carnaval.
February 13, 2006... Brazilian water company Companhia de Saneamento Basico do Estado de Sao Paulo (Sabesp) looks to issue a R$263 million ($120.1 million) receivable investment fund (FIDC) shortly before Carnaval, which this year falls on Feb. 28, according to a...

Mexico's subsovereigns warm up to banks.
February 13, 2006... Compared with the more fertile terrain of other asset classes, deals backed by the Mexican government's revenue to states and municipalities have grown sparse. The culprit is a stable of cash-rich banks happy to provide financing to...

No end to string of Argentina's consumer ABS.
February 13, 2006... The consumer ABS sector appears to be bustling with undiminished vigor in Argentina. Fitch Argentina recently rated the XLII series of the Consubond trust. The senior notes, totaling Ps35.5 million ($11.6 million), are rated AAA(arg).' The...

Whispers.(surveys )
February 20, 2006... Merrill Lynch & Co. next month plans to bring to the market a $1 billion high-grade cash CDO, the Monterey CDO Ltd. Dynamic Credit Partners LLC, a New York-based privately held CDO and hedge fund manager, will manage the deal, which is backed...

A first in shipping ABS is anchored.
February 20, 2006... CMA CGM S.A., the world's third largest container shipping company, completed the first public shipping securitization in the industry last week. The transaction builds on European aircraft securitization structures, enabling the issuer to...

Dunkin's new twist on an old recipe.
February 20, 2006... The planned $1.5 billion asset backed securities offering to finance the $2.43 billion purchase of Dunkin' Brands Inc. from Pernod Ricard by Bain Capital, Carlyle Group and T.H. Lee Partners is indicative of the increased role of intellectual...

SLIMS are putting on plenty of weight.(student loans)(savings and loan information management systems )
February 20, 2006... Net interest margin securities have become a standard structure, occasionally used in various asset classes such as mortgages or (infrequently) autos. The principal involves securitizing the residual cash flows of a trust, which imputes...

Vegas conference outdraws Phoenix event.(Brief Article)
February 20, 2006... Information Management Network employees in charge of the annual ABS West conference met last week to decide how, or if, the conference will change next year in an effort to attract more attendees. The securitization conference, held in...

40-year offering to eat away' at IO market share.(interest-only)(surveys on loans)
February 20, 2006... As an increasing number of subprime borrowers choose the 40-year mortgage - and an increasing number of issuers offer them - investors are wondering how they stack up against an interest-only loan. According to UBS, anecdotal evidence...

How healthy is the foreign appetite for U.S. real estate?(surveys on real estate invvestments)
February 20, 2006... As foreign capital continues to pour into the U.S. housing market - in no small part through investment in U.S. residential-mortgage backed securities and CDOs - investors, analysts and others continue to search for indications of when, or if,...

CORRECTION.(Correction Notice)
February 20, 2006... In "ABCP issuance heads toward $1 trillion" (ASR, 2/6/06), Felicia Graham, a partner at Orrick, Herrington & Sutcliffe LLP, was quoted in the story but was incorrectly identified as Felicia Watson. Also, the firm was identified as Orrick...

Some RMBS deals feeling the Louisiana blues.(surveys )
February 20, 2006... A dramatic spike in loan delinquencies across Louisiana is a worrisome trend for investors in subprime RMBS, according to analysts at Credit Suisse. "Even modest concentration in Louisiana should present a concern to subordinate...

No shocks from Bernanke, who offers no surprises on the Hill.(surveys )
February 20, 2006... Mortgage performance was mixed last week. The sector lagged ahead of new Federal Reserve chairman Ben Bernanke's appearance before the House Financial Services Committee Wednesday on concerns of how his remarks could impact interest rates and...

Survey suggests some cooling in the housing market.(surveys)
February 20, 2006... In the latest quarterly Senior Loan Officer Opinion Survey on Bank Lending Practices, there was an increase in the number of domestic banks reporting weaker demand for home mortgages compared to the October survey. The recent survey...

Citi looks at impact of lower FHA/VA mortgage rates on prepays.(United States. Federal Housing Administration)(surveys on mortgage rates)
February 20, 2006... In a recent report, Citigroup Global Market analysts examined the current Federal Housing Administration/Department of Veterans Affairs mortgage rates and their impact on prepayment speeds. According to the Mortgage Bankers Association, the...

Smoking ban leaves U. K. pubs with favorable outcome.
February 20, 2006... Last week's long-awaited parliamentary decision in favor of a blanket smoking ban in U.K. pubs left the establishments with their most favorable scenario. The concern had been that while pubs and restaurants would face the ban, private...

In Europe, ebb of deal flow.(securitization prices)
February 20, 2006... The focus last week in Europe was on pricing, with little activity on the primary pipeline by the end of the week. The secondary markets were also quiet. "We hear that the pipeline is quietly building, but given the lackluster volume...

Austria's medium-sized corporates gain capital market access.(reports)
February 20, 2006... Bank financing at favorable rates remains a viable choice for Austria's midsized companies. But with Basel II looming, diversification of funding sources is a reality these corporates must face. Accessing the corporate bond market on a...

Malaysian central bank begins Islamic Sukuk program.(Bank Negara Malaysia)
February 20, 2006... Malaysia's central bank, Bank Negara Malaysia, last week launched its first Sukuk Ijarah (lease-backed notes) deal. The M$400 million ($107.5 million) one-year offering, which uses a securitization-type structure, is the first transaction...

Mexico becomes frontier for mortgage insurers.(mortgage insurance)
February 20, 2006... Foreign investment bankers, guarantors and even cross-border investors have swept into Mexico in recent years to grab a piece of the growing mortgage and RMBS sectors. The freshest faces at the table are mortgage providers Genworth...

HSBC Brasil to tap DPRs in debut deal for $200 million.(diversified payment rights)
February 20, 2006... Brazilian originators haven't offered cross-border investors much lately. That's because the climate remains more receptive to unsecured paper, or, in the case of exporters, dining off revenue that's grown fat off bulging commodity prices....

Fitch predicts more of same for LatAm cross-border.(Latin American)(Fitch Ratings Inc.)(Brief Article)
February 20, 2006... Fitch Ratings has released its 2006 outlook for Latin American structured finance. Its forecast for the cross-border market: expect more of the same. Thinner volumes last year will linger into 2006, as many of the leading candidates for...

Whispers.(structured finance changes)
February 27, 2006... Merrill Lynch announced details of changes in its Asia Pacific structured finance business. Jim Yang will move from New York to Hong Kong to lead the bank's Asian-based finance, securitization and principal investments group. He will report to...

St. George kick starts Aussie MBS market.(St. George Bank Ltd.)(mortgage backed securities)
February 27, 2006... Following an unusually barren January for the Australian securitization market, St. George Bank finally got things rolling with the latest residential mortgage-backed deal from its Crusade program. The A$3 billion-equivalent ($2.2 billion) 144a...

FASB statement deals with hybrids.(Financial Accounting Standards Board )
February 27, 2006... The Financial Accounting Standards Board has amended earlier statements, Nos. 133 and 140, with a recently issued one, No. 155, that addresses the accounting treatment for hybrid financial instruments that contain derivatives. The latest...

ABN builds RMBS base in Kazakhstan.
February 27, 2006... ABN AMRO has crafted the first true sale of Kazakh mortgages to a cross-border SPV, paving the way for an RMBS that could turn out to be Kazakhstan's first in the capital markets. The vehicle, dubbed the First Kazakh Securitization Company,...

Subprime prepayments down, while defaults are up.(adjustable rate mortgages)
February 27, 2006... Fewer subprime borrowers rolled into new loans during the first month of this year compared with December, despite lower interest rates offered by mortgage companies, according to a Friedman Billings Ramsey & Co. report released last week. ...

Subprime rates down again.(Brief Article)
February 27, 2006... The average subprime mortgage rate was 7.73% last week, representing a nine basis point drop from the average in January but still higher than levels seen last summer, according to JPMorgan Securities Inc. "The competition no doubt will...

Another ratings hit for General Motors.
February 27, 2006... General Motors Corp. took another ratings hit last week when Moody's Investors Service lowered its corporate rating by one notch to B2 with a negative outlook. But ABS analysts focusing on the auto sector seem to be taking the negative...

New tobacco-backed structures prompt rating change.
February 27, 2006... Innovation within the U.S. tobacco settlement bond sector led Fitch Ratings last week to revise a portion of its rating criteria. The move came about due to new structures that have yet to come to the market, according to Jeffrey Prackup, a...

Subprime IO loans boost investors.(interest only loans )
February 27, 2006... The uncertainty surrounding the future performance of subprime interest-only loans is getting a lot of attention from analysts lately, with mostly upbeat news for investors. A Fitch Ratings report offered the most cautious take on the...

Fannie Mega report generates fast money buying.
February 27, 2006... Mortgage outperformance continued last week due to several factors, including the release of the Fannie Mae Mega report, inversion of the swaps curve, low volatility and limited supply. Flows were noted as two-way, with real money showing...

Overseas MBS investing: can it overcome a demand shortfall?(Mortgage backed securities)
February 27, 2006... Lehman Brothers analysts in a recent report said although overseas demand has been robust, it is not enough to absorb any potential shortfall in GSE or bank MBS demand. Lehman added that with the yield curve expected to flatten or even...

Is it time to short CMBS?(commercial mortgage backed securities)
February 27, 2006... As is the case with home equity asset-backed securities investors, those with an eye on commercial mortgage-backed securities share a couple of key concerns - shrinking credit enhancement levels and deteriorating underwriting standards. ...

Barclays examines the causes of fast GNMA discount speeds.(Government National Mortgage Association)
February 27, 2006... Baclays Capital MBS analysts used the new delinquency information released by Ginnie Mae to examine the connection between delinquencies and prepayment speeds. Analysts said in a recent report that although the new data has brought to...

Gap closing between U.S. and European trade receivables.
February 27, 2006... A new study released by securitization research provider Demica plc revealed that 17% of America's top 500 nonfinancial companies have conducted a trade receivables securitization in the last 10 years. The study also revealed that 11% of...

Synthetic SPVs find a home in Germany.(synthetic special purpose vehicles)
February 27, 2006... Synthetic securitizations are a well-established structure in Germany, but synthetic special purpose vehicles have typically been set up outside the country. Dresdner Bank's Promise K 2006-1 brings the vehicle for the first time onto...

Commerzbank plans ABS of its loan exposure.(asset backed securities)(Brief Article)
February 27, 2006... Commerzbank plans to securitize 5 billion ($5.9 billion) of its loan exposure as part of its new credit recycling program. The issue is expected to come to market in the second quarter. But contrary to previous market reports, the...

Greece looking to marry ABS with project loans.(asset backed securities)
February 27, 2006... Greece could be the latest country to fund infrastructure projects via the capital markets. But before the country sports its own brand of project finance/securitization financing, some minor tweaks must be made to Greece's existing...

HSBC Brasil prices DPR.
February 27, 2006... HSBC Brasil has priced a $200 million, 10-year deal backed by diversified payment rights last week. Pricing was 21 basis points over three-month Libor, thanks to a wrap by FGIC. Moody's Investors Service and Standard & Poor's rated the...

BCP back in market with longer DPR deal.(Banco de Credito del Peru )(diversified payment right)(Brief Article)
February 27, 2006... Banco de Credito del Peru is returning to the market with a deal backed by diversified payment rights, and this time the originator is terming out to 10 years on a final basis. This would make the $100 million deal the longest ever wrapped...

Systems upgrade reported in the Philippines.(Brief Article)
February 27, 2006... There are tentative signs that a first securitization deal in the Philippines since the Asian Financial Crisis of 1997 may not be such a pipe dream. The government-supported National Home Mortgage Finance Corporation has upgraded its electronic...

Fitch forecasts more CDO activity in China.
February 27, 2006... Fitch Ratings last week revealed it expects China to generate further issuance of collateralized debt obligations in 2006, following the completion of the country's first CDO by China Development Bank at the end of 2005 (ASR, 1/9/06). ...