Asset Securitization Report articles from February 2007

Asset Securitization Report archives from February 2007

Whispers.(briefs)
February 5, 2007... Predicting a growth in ABS deals secured by revenues from natural resources, film royalties and casinos, Fitch Ratings created a structured finance new asset group, and appointed Dan Chambers, a managing director in its CMBS group, to manage...

Talk of growth in SIV market includes pension funds eyeing structured paper.(structured investment vehicle )
February 5, 2007... Las Vegas - The structured investment vehicle (SIV) market came up with several major developments in 2006, including two repeat sponsors that launched new vehicles, and a new type of sponsor, likely the Canadian Teacher's Fund. In the year...

Countrywide, BofA merger unlikely.(Countrywide Financial Corp.)(Bank of America Corp.)
February 5, 2007... Although the rumor was running rampant throughout the industry last week, it appears as though Bank of America Corp. is not interested in acquiring or embarking on a joint venture with mortgage giant Countrywide Financial Corp. Analysts noted...

Cohen opens Asian branch.
February 5, 2007... Las Vegas - Cohen & Co. last week announced it had snagged Taro Masuyama, the former head of Asia Pacific and Japan structured credit products at Merrill Lynch, to head up its new asset management business in the Asian-Pacific region, Cohen...

ABS market gets down to work in Las Vegas.(asset backed securities)
February 5, 2007... Generally considered a setting to indulge brazen debauchery, Las Vegas last week was the scene for an industry conference that, instead, set down to work. "This is where business is getting done," Micah Green, Co-CEO of the Securities...

ASF participants offer views on ABS CDOs.(Collateralized debt obligations)(asset backed securities )
February 5, 2007... From the early morning sessions to the wee morning hours, conversations at last week's ASF 2007 conference held in Las Vegas seemed to inevitably turn to subprime mortgages and the fate of ABS CDOs, among other things - such as the Miss America...

Auto lease ABCP deals reflect bank competition for clients.
February 5, 2007... Las Vegas - Auto lease ABS professionals highlighted several industry trends for the year ahead at the ASF 2007 conference held here last week, including weakened demand for new cars and higher program concentration limits for foreign vehicles....

Good times roll for timeshare deals.
February 5, 2007... Las Vegas - The small, tidy timeshare loan ABS market performed well in 2006, thanks to new product offerings that increased sales. Prospects should be equally good for 2007, said several industry professionals yesterday during a panel...

CDO equity funds step up the pressure.(CDOs (Collateralized debt obligations) )(Brief article)
February 5, 2007... Las Vegas - The growing clout of CDO equity funds is leading to so-called activist equity investors, according to market participants at ASF 2007 held here. Investors are asking for lower management fees, or, in some cases, no management fees,...

SEC official gives feelers on Reg AB implementation.(Securities and Exchange Commission)
February 5, 2007... Las Vegas - Although market participants are still waiting on official word regarding how to implement certain provisions of Regulation AB, Paula Dubberly, Securities and Exchange Commision associate director, gave a good indication of what the...

GSC Analysis goes with the cash flow.(Seth M. Katzenstein)(Interview)
February 5, 2007... The following is an exclusive interview with GSC Group's Seth M. Katzenstein, managing director and head of portfolio management and underwriting, U.S. collateralized corporate debt, and Alexander B. Wright, managing director and head of...

Buyers appear as 10-year moves below 4.90%.(Market share report)
February 5, 2007... Mortgages had some relief last week as selling slowed down and buying picked up. It was a heavy data week with the key reports of fourth-quarter GDP, Chicago PMI, construction spending, personal income and outlays, ISM Index and employment. In...

Is the U.K. consumer resolve too good to be true?(Report)
February 5, 2007... We may have started the year with brimming optimism over the U.K. consumer resolve, but if my January credit card bills - which haven't shrunk as much as expected - are a measure of the common man's burden, then it's likely we could have more...

European CLO downturn on the horizon Do you know who your manager is?(collateralized loan obligation)(Market share report)
February 5, 2007... When the leveraged loan market starts to see defaults you better. It seems easy to get caught up in the leveraged finance bonanza of late, and CLO managers have done just that. According to figures reported by Derivative Fitch, cash CLOs...

CRE CDO buzz not dampened by limited loan availability.(Collateralized debt obligations)(commercial real estate )
February 5, 2007... More commercial real estate (CRE) CDOs look set to take the stage despite the lack of available collateral needed to fuel market growth. The expansion of European CRE CDOs still heavily depends upon the ability of the commercial loan and CMBS...

ESF predicts increased European ABS issuance.
February 5, 2007... With the favorable macroeconomic environment set to continue into 2007, European securitization market volume is expected to break the record 458 billion ($591 billion) issued in 2006, the European Securitization Forum (ESF) said. Factors...

End of January momentum spills over into February debut.
February 5, 2007... January ended with 24.4 billion ($31.7 billion) deals priced in the European market. This rapid pace is set to continue in February with 15.7 billion already part of this month's deal line-up. The shorter month apparently won't truncate...

Brazil's domestic securitization hits $5.6 billion.
February 5, 2007... Brazil's domestic securitization market plowed on in 2006, with total issuance hitting R$11.9 billion ($5.6 billion), according to data provided by Uqbar, a local consultancy specializing in the securitization business. The three main rating...

Ukraine RMBS might price this week.
February 5, 2007... More details have surfaced on a first-time public securitization from the Ukraine, an RMBS originated by PrivatBank (ASR, 1/29/07) and arranged by UBS. Expected to price towards the end of this week, $134 million in 3.4-year average, class-A...

Moody's: Turkish mortgage law would give rise to deals.
February 5, 2007... Moody's Investors Service predicts that Turkey will produce several mortgage deals this year, provided that a mortgage law is passed, the agency said in a report on EMEA structured finance. The government's failure to enact the completed...

Real estate defies negative headlines.
February 5, 2007... The fourth quarter of 2006 had the same theme that dominated the whole year of 2006 in terms of asset class distribution. As expected, the real estate sector dominated once again despite the negative headlines that plagued subprime issuers...

Whispers.
February 12, 2007... Ifigenia Palimeri of Moody's Investors Service has been promoted to team managing director. Palimeri reports to Detlef Scholz, group managing director of Moody's EMEA securitization group. Palimeri will co-head the CMBS team together with...

BNY, FDIC dispute highlights court confusion over ABS covenants.(Federal Deposit Insurance Corp.)(Bank of New York)
February 12, 2007... The securitization industry is preparing to strike back at a U.S. Court of Appeals ruling that allows the Federal Deposit Insurance Corp. (FDIC) to ignore a credit card ABS trust contract's ipso facto clause, which would have triggered an early...

Hit seen to SLABS in 2008 budget.
February 12, 2007... Just as the student loan ABS sector was digesting proposed cuts to federal student loan subsidies proposed by Congress, it was hit with a Bush administration proposal to cut lenders' special allowance payments (SAP) by 50 basis points in the...

Subprime news stirs '06 concerns.(subprime lenders)
February 12, 2007... Subprime lender stocks fell along with the ABX.HE index last week, as more news of troubled subprime lenders reverberated through the market. And unlike in the recent past, the news affected the second and third-largest U.S. subprime lenders -...

Attractive pricing in ABS sector offsets trauma felt in HEL.(home equity loan)(asset backed securities)
February 12, 2007... Ordinarily, a week of $20 billion in new ABS issuance would be considered a marvelous accomplishment, and one that would be expected for the market, especially after coming off of a major industry conference. Although the consumer ABS sectors...

Derivative counterparties: Read your contracts closely.
February 12, 2007... Credit derivatives market participants following the Aon Corp. versus Societe Generale case - which was on appeal before the United States Court of Appeals for the Second Circuit - were finally able to exhale last week. The court overturned a...

Fitch adds insurance-linked securities business, promotes execs.
February 12, 2007... Fitch Ratings continued its business expansion and substantial reorganization of its executive lineup last week. Fitch appointed John Bonfiglio as head of U.S. structured finance. For Bonfiglio's part, the move expands his duties to...

Domino's tops recap plan with ABS deal up to $1.85 billion.(Brief article)
February 12, 2007... Domino's Pizza is planning to issue up to $1.85 billion in asset-backed securities, funded by franchise fees from its stores. In turn, the company plans to use the funds to finance a stock repurchase plan. The company retained Lehman...

Moody's to issue RMBS presale reports.(Moody's Investor Service)(residential mortgage backed securities)(Brief article)
February 12, 2007... Moody's Investors Service will start publishing presale reports for its rated U.S. subprime RMBS. The reports will offer the market a view of a transaction's rating drivers before the deal closes and, through standardized reporting, allow...

SEC clarifies Reg AB provision on servicer reporting.(Securities and Exchange Commission)
February 12, 2007... The Securities and Exchange Commission has released its telephone interpretations on Item 122 of Regulation AB. These were released after Paula Dubberly, SEC associate director, gave a preview on the Commission's stance on this item at the...

IMN and IFC partner to bring an emerging markets focus.(Information Management Network)(International Finance Corp.)
February 12, 2007... In a move that will make its Spring ABS 2007 have more of an international focus, Information Management Network will be working closely with the International Finance Corp. (IFC) to create a full day of emerging markets coverage at IMN's Miami...

Mortgages feeling heavy as market gained.
February 12, 2007... Mortgages started feeling heavy last week as the market made further gains. After peaking at 4.892% on Jan. 29, the 10-year Treasury note had rallied 14.7 basis points to 4.745% through Feb. 7. Treasurys benefited from several sources,...

Freddie Mac reports fourth quarter cash-out refis at 84%.(Federal Home Loan Mortgage Corp. financial report)(Financial report)
February 12, 2007... Cash-out refinance activity remained strong in the fourth quarter of 2006 though it was down from 3Q06, according to Freddie Mac. The agency reported that in the fourth quarter of last year, 84% of Freddie Mac-owned loans that were...

Speeds on premium coupons slow.
February 12, 2007... FNMA prepayments were down just slightly more than expected in January. In particular, 5% coupon speeds were similar to expectations, while higher coupons slowed more than expected. For example, 5.5s declined about 9% from December versus...

Cracking Mexican wrap culture.(MBIA Inc.)
February 12, 2007... Nearly four years ago, MBIA hit Mexico's peso market, the first monoline to do so. It gave extra vroom to a toll road deal, which priced tighter than any domestic triple-A corporate or ABS before it. The message was clear. Mexican buysiders...

ESF members expect more RMBS tightening.(European Securitization Forum)(residential mortgage-backed securities)(Survey)
February 12, 2007... European RMBS deals could see more price tightening as the market moves toward a full implementation of Basel II. According to results from the European Securitization Forum (ESF) working group issuance forecast survey, although survey...

Slow start for February new deal line-up.(Bear Stearns Companies Inc. )(J.P. Morgan Securities Inc.)(Brief article)
February 12, 2007... Last week got off to a slow start, but dealers promised an uptick in European ABS issuance before month end. Two new deals entered the pipeline, raising the volume of new issues marketing so far this month to 19 billion ($24.6 billion). ...

New decree could stir more early repayments on Italian loans.
February 12, 2007... While early repayments on Italian loans have been a relative nonissue in the past, a new law in the works under the Italian Bersani Decree could provide more incentive for borrowers to pay off loans early. The new regulation, if put into...

Babson closes court on seventh Duchess Series CLO.(Babson Capital Europe)(collateralized loan obligations)(Brief article)
February 12, 2007... Babson Capital Europe announced the close of the 500 million Duchess VII CLO last week, a regally named fund arranged appropriately enough by Royal Bank of Scotland. Duchess VII ancestry dates back to 2001, when the series began as a sister...

S&P ups Russian lease deal thanks to government link.
February 12, 2007... In a move that must have delighted boosters of Russian ABS, Standard & Poor's last week upgraded the class A notes of a Russian leasing deal to BBB+' after it did the same to the long-term corporate rating of the transaction's lessee, Russian...

More trouble for Italian SCIP deal.
February 12, 2007... Fitch Ratings took action on SCIP 2, downgrading the 475 million ($618.6 million) Class B2 notes one notch to AA-' from double-A, following its review of the latest quarterly performance report and a credit analysis of the residual portfolio....

HSBC Mexico coming to market with peso RMBS.(Hongkong and Shanghai Banking Corp.)(residential mortgage backed securities)(Brief article)
February 12, 2007... HSBC Mexico has registered a Ps10 billion ($911 million) RMBS program with the Mexican stock exchange, a first in the local market for the international bank. HSBC is self-arranging, and the legal advisor is White & Case. Details on a first...

Whispers.(BMO Capital Markets)(promotion of Jan Walker )(Bill Moss will step dowm from Macquarie Bank Ltd.)
February 19, 2007... BMO Capital Markets is looking to add seven or eight associates and junior vice presidents to its securitization group, after seven executives, led by Pete Walsh, former co-head of origination and structuring, left to start the structured...

Not a good week for subprime second liens: S&P watchlists 18 classes.(Standard & Poor's Corp.)
February 19, 2007... Citing a "new paradigm" of subprime credit losses, Standard & Poor's last week stepped up its RMBS credit surveillance and simultaneously placed a negative CreditWatch on ratings of 18 subordinate classes from 11 RMBS deals issued in 2006 -...

Market tackles SLABS prepays.(student loan asset backed securities)
February 19, 2007... Several factors have kept annual student loan ABS issuance in the healthy area of $44 billion for the last few years, including government guarantees that act as enticing forms of credit enhancement for much of the sector's underlying...

Ex BMO execs form Six Degrees.(Six Degrees Capital Management)
February 19, 2007... Hoping to capitalize on the various structured finance growth opportunities beyond securitization, seven ABS senior executives have left BMO Capital Markets to launch Six Degrees Capital Management (SDCM). The Chicago-based company, which...

Hunting for diversity, safety investors pony up for SL, autos.
February 19, 2007... Last week Federal Reserve Chairman Ben Bernanke managed to say something that both the stock market and the Treasurys market wanted to hear. There would be no pressing need to cut the target funds rate to spur economic expansion, and inflation...

CDPCs, eager to play in niche market, line up for ratings.
February 19, 2007... With the blessing of a triple-A rating from Moody's Investors Service, hedge fund Aladdin Capital Management became the proud parent of the newest credit derivative product company on the block. The road to obtaining a CDPC rating is a long,...

S&P develops servicer criteria for CRE CDO deals.(Standard & Poor's Corp.)(Collateralized debt obligations)(Brief article)
February 19, 2007... In response to the inherent complexities of CRE CDO loans, Standard & Poor's released a report last week detailing how it evaluates companies who act as servicers and special servicers in this growing market segment. The report outlines the...

Congress aims to shine spotlight on preferred lender relationships.(Brief article)
February 19, 2007... Lawmakers in the House recently proposed legislation designed to stop unethical practices that private student loan lenders sometimes undertake to gain preferred lender status with universities. Introduced in early February, the legislation...

ASF requests clarification on provision that hits auto sector.(American Securitization Forum)
February 19, 2007... Last week, the American Securitization Forum filed a comment letter with the staff of the State of New York Banking Department regarding New York sales finance licenses, requesting that the department clarify the status under New York Banking...

CDO Breathing Dragon? Industry ponders CDO growth potential in ex-Japan Asia.(Collateralized debt obligations)
February 19, 2007... Los Angeles-based asset management firm Trust Company of the West - the world's largest CDO manager - is preparing to become a classroom of sorts. In the coming months, TCW will open its doors to a group of Chinese investors interested in...

TABX and ABS CDOs: A match made in heaven?(Collateralized debt obligations)
February 19, 2007... The newest spin on the ABX index, the ABX tranche indices (TABX), debuted in the market on Valentine's Day, bringing with it hopes of a benchmark for CDO pricing. Some, however, questioned whether Cupid's arrow misfired when it paired the...

Babson shines up Sapphire hybrid CDO.(Babson Capital Management)(Sapphire Valley Development Co.)(Collateralized debt obligations)(Brief article)
February 19, 2007... Babson Capital Management closed a $600 million CDO last week. The Sapphire Valley CDO, Ltd. portfolio consists of approximately 80% leveraged loans and 20% securities. Of the 20% securities, 40% are expected to be sourced synthetically through...

CDOs drive ABCP liquidity backstop changes.(collateralized debt obligations)(asset-backed commercial paper )
February 19, 2007... Relationship pundits say an indispensable element to any successful connection is communication. In the world of structured finance, where the stakes are higher, a solid liquidity backstop is emerging as the key to a successful relationship...

Interest in new HEAT deal as hot as ever.(Deutsche Bank AG)
February 19, 2007... With a year of credit mishaps behind, the nascent mezzanine German SME CLO sector is seeing the first deal marketing in 2007 via HSBC Trinkaus & Burkhardt's HEAT Mezzanine -1 2007. Where the deal prices will tell the tale of where current...

BNP's ZOO kicks off a good year for CFO CDOs.(collateralized fund obligations)(Collateralized debt obligations)(BNP Paribas S.A.)
February 19, 2007... While the securitization of hedge funds might not be the newest concept on the block, it's certainly an area that has seen limited expansion in Europe. However, as investors gain an appetite for this paper, the sector is expected to see more...

SunTrust bulks up in all areas of its business.(Suntrust Robinson Humphrey plans for growth)
February 19, 2007... SunTrust Robinson Humphrey is a company that wears various hats in structured products - an investor, investment bank and asset manager. It is currently embarking on growing its business by hiring aggressively throughout the first half of the...

Fed Chairman comments inspire active MBS buying.(mortgage backed securities)(Industry overview)
February 19, 2007... Federal Reserve Chairman Ben Bernanke gave the markets a Valentine's Day gift with his upbeat tone on the economy and inflation at his semiannual report to the Senate Banking Committee. "So far, the incoming data have supported the view that...

Merrill Lynch: Will ABS widening mean trouble for CMBS?(Merrill Lynch and Company Inc. to provide services for Asset backed securities and commercial mortgage backed securities )
February 19, 2007... In a research report released Thursday, Merrill Lynch looked at whether ABS widening will spell trouble for the CMBS sector. Analysts specifically addressed market concerns about the residential housing downturn and how this event could impact...

EU pitched as single mortgage market.(European Union. European Commission)
February 19, 2007... The European Commission last week ended its consultation period on the reports of two expert groups established in April 2006. These groups were created to explore the issues of mortgage funding and consumer protection integration. If plans...

All eyes are on U.S. subprime developments in Europe.
February 19, 2007... Last week, European market players focused on developments in the U.S. subprime market. They were concerned about the possible contagion risks resulting from the recent problems in this sector - whether the U.S. subprime woes will negatively...

European structured finance shows continued improvement, Moody's said.
February 19, 2007... In its fifth annual European structured finance rating transition study, Moody's Investor's Service found that the average credit quality of European structured finance securities continued to improve in 2006 compared to 2005. The number...

ABN continues with its SME CLO strategy.(ABN AMRO Bank N.V. to provide loan facility for small and medium sized companies)(Brief article)
February 19, 2007... ABN Amro priced its SMILE 2007 - a 4.9 billion ($6.4 billion) true sale cash securitization of Dutch loans to small and medium-sized enterprises (SMEs). The transaction is the third SME loan securitization under the SMILE program The...

BMO Capital Markets takes Fairway Finance abroad.(Brief article)
February 19, 2007... BMO Capital Markets is restructuring Fairway Finance, its nearly 10-year-old asset-backed commercial paper conduit, implementing changes that will allow it to issue ABCP in pounds, sterling and euros. Currently, the multiseller vehicle issues...

Rio Bravo takes passengers for Sao Paulo commuter fund.(Rio Bravo Investimentos)(Companhia Paulista de Trens)
February 19, 2007... Brazilian arranger Rio Bravo Investimentos has started building the book for a transport-related receivable investment fund (FIDC), with global money a major target. "We are pretty positive that the pricing on this deal is going to be...

Ukraine's Privatbank prices debut RMBS.
February 19, 2007... Last week, the Ukraine produced the country's first residential mortgage-backed deal in the public market. With industry leader Privatbank as originator, a $134 million, 3.4-average life A piece priced at 210 basis points over one-month Libor,...

Deutsche Bank brews first ever CDO of RMBS in Mexico.(collateralized debt obligations)(Brief article)
February 19, 2007... Deutsche Bank has filed with Mexican regulators a first-ever collateralization of local mortgage-backed securities. The prospectus doesn't disclose a size for the transaction but it does list five RMBS as collateral (see table). Only the senior...

Yapi Kredi includes new names in second DPR issue.(diversified payment rights)
February 19, 2007... Two months after its structured finance debut, Turkey's Yapi ve Kredi (YKB) is ready for an encore. Via leads Standard Chartered and HVB, the bank is bringing to market a mixed euro/dollar placement backed by diversified payment rights (DPRs)...

Whispers.
February 26, 2007... Marathon Asset Management snagged Rick Smith and Steve Paton from bankrupt Mortgage Lenders Network USA to head up a new specialty loans servicing and loss mitigation business to be called Marix, the company announced. Smith was a senior vice...

Subprime servicing shops come under scrutiny from rating agencies.
February 26, 2007... Moody's Investors Service late last Wednesday put on watch for downgrade a handful of subprime lenders' servicing operations, helping to roil the already volatile ABX.HE 06-2 index, which broke below 80 last week. The move prompted perhaps the...

Cap charge for EM class drops.(emerging market )
February 26, 2007... Standard & Poor's last week cut the capital charge applied to monoline insurers across the ratings board for emerging market future flow transactions. While the move is a positive for originators of future flows, it will doubtfully have much of...

SunTrust CDO team departs.
February 26, 2007... SunTrust Robinson Humphrey's CDO team has left the company, despite the firm's plans for growth in the sector in 2007 and a media push to promote it. The Atlanta-based bank lost 13 members of its CDO team, including its head James...

HE ABS deals dominate week marketing begins for SLABS.(Asset backed securities)
February 26, 2007... Home equity loan ABS, as usual, dominated new issuance volume last week, similar to the way that the mortgage market dominated news and investor concerns. A couple of deals from the HE ABS sector cleared by press time late Thursday, the...

Allegheny Energy updates environmental bond plan.
February 26, 2007... Allegheny Energy, which is preparing a $466 million transaction to finance the costs of construction on an emissions control facility at a West Virginia plant, recently specified the amount of registered bonds to be issued under one portion of...

TABX trades wider than expected to ABS CDOs.
February 26, 2007... The TABX index began trading Feb. 14 at spreads much wider than a number of market players had anticipated. While not as shocking as, say, Britney Spears' new buzzcut, aside from structural differences, the trend in the TABX so far could...

FinanSure debuts on student loan ABS market with $925M deal.(loan facility for FinanSure Student Loans)
February 26, 2007... FinanSure Student Loans, a Chicago-based student loan provider, is preparing to launch a $925 million securitization deal primarily backed by FFELP consolidated education loans. This marks the student loan issuer's first time coming to the ABS...

Highland Financial recruits Huang, plans to hire more this year.(Sheila Huang )
February 26, 2007... ABS and MBS hedge fund Highland Financial Holdings Group recruited Sheila Huang as director and portfolio manager of the firm's high-grade strategies division. The move reflects, and continues be part of, ongoing efforts at Highland Financial...

CDO issuers feel sting of MTM losses.(collateralized debt obligations)(Financial report)(Brief article)
February 26, 2007... Subprime lender Novastar Financial Corp. took a $4 million loss in the fourth quarter related to its first CDO issuance. The loss was a public example of what a number of market participants are speculating about - that CDO issuers are being...

Moody's voices concerns over BLX ABS.(Brief article)
February 26, 2007... Moody's Investors Service is reviewing the Business Loan Express SBA Loan Trust 2001-1 transaction, and might downgrade the deal's affected securities. Classes A and M notes, rated Aaa' and A1' respectively, were targeted for the review,...

Come clean, market says on CDO transparency.(Collateralized debt obligations)
February 26, 2007... New York - As the number of commercial real estate CDO transactions increases, analysts and investors are calling for improved surveillance in a market that still lacks transparency, according to speakers at the Information Management Network's...

Debt capital markets experts increasingly in demand as financial institutions bankers.
February 26, 2007... Investment bankers dedicated to the financial institutions sector are making an extra effort to work closely with their debt capital markets teams in order to win a greater share of client business. In many instances reporting lines are getting...

Spreads hold the line as first wave of CMBS supply surfaces.(commercial mortgage backed securities)
February 26, 2007... Leading into the barrage of CMBS deals that were expected this month, three deals hit in rapid-fire succession on Thursday, Feb. 15 and most priced at or inside of guidance as CMBS spreads barely budged on this first real wave of new production...