Asset Securitization Report articles from January 2003

Asset Securitization Report archives from January 2003

Whispers.(includes multiplearticles)
January 6, 2003... People Former Banc of America banker Luis Araneda, who worked in the bank's credit card and student loan divisions, is starting a new boutique underwriting and asset-backed consulting firm, named Structured Capital Partners LLP, with...

ABS volume growth seen slowing in '03, positive for spreads.(asset backed securities)
January 6, 2003... A banner year for asset-backed supply, combined with a deluge of negative headlines has researchers mixed on the supply outlook for 2003. All agree, however, that current spread levels will contract in most sectors during the first half of the...

Quibbling with mark to market.(collaterized debt reports)
January 6, 2003... As if an odd wind was blowing through the market, several firms released research reports last month surrounding stability in the collateralized debt obligation arena. As it happened, Standard & Poor's issued a Dec. 19, 2002 report aimed...

MBS investors hit '03 cautiously.(mortgage backed securities)
January 6, 2003... With the macroeconomic environment boding well for mortgages and with MBS technicals remaining solid, investors are entering the new year by approaching the sector with caution against skyrocketing prices. "I expect that we are going to...

FASB's "final" draft still chilling: FASB's mid-January start date may be premature, considering the level of criticism of the current draft by market experts.(Financial Accounting Standards Board)
January 6, 2003... Though 2002 had its share of blowups, another defining characteristic of the year was the focus on, and potential threat of sweeping changes in accounting, specifically with regards to off-balance-sheet assets and risk. Center stage was...

BofA predicts principal write-downs in Metris C Classes.(Banc of America Securities)(Metris Companies Inc.)(Brief Article)
January 6, 2003... Slowed portfolio growth and rising delinquencies have troubled credit card ABS issuer The Metris Companies on the ropes. Researchers at Banc of America Securities mapped out a wind down of the trust, in the event that an early amortization is...

UAC's fate hangs in balance of court decision this week.(Union Acceptance Corp.)(Brief Article)
January 6, 2003... The saga continues for embattled independent auto lender Union Acceptance Corp. in its attempts to retain the servicing rights to its auto loan portfolio. The Indianapolis-based lender announced Dec. 17 that it had completed a planned portfolio...

Former GCM pro joins boutique firm.(Greenwich Capital Markets' Charles Forbes)(Brief Article)
January 6, 2003... A new receivables/specialty finance company associated with hedge-fund Old Hill Partners has just begun ramping up a portfolio of assets, and plans to structure private un-rated securitizations as part of its overall funding strategy. The...

Would war with Iraq impact ABS?(Brief Article)
January 6, 2003... A short war in Iraq could push ABS spreads wider, but as was the case in 1991, it would likely have little impact on the market in the long term, says Merrill Lynch managing director Dan Castro. The 1991 Persian Gulf War was the last time...

JPMorgan claims its first ABS crown.(JPMorgan Securities is the top asset-backed underwriters)
January 6, 2003... The most wide open race of asset-backed underwriting in recent memory came to a close last week, won by a nose after JPMorgan Securities priced a $1.5 billion Chase Credit Card Master Trust transaction at the eleventh hour to best Credit Suisse...

Summary of accomplishments in ASF's inaugural year: Comments contributed by the American Securitization Forum.
January 6, 2003... * In 10 short months, the ASF can point to many accomplishments in the midst of a "perfect storm" on the regulatory front, to use the words of one founding member. In addition to growing its membership rapidly to a diverse group of 60...

Groundbreaking Securitizations: ABS provided relief to distressed issuers in 2002.(asset backed securities)
January 6, 2003... In the midst of an economic minefield and a buyside weary of less-than-stellar names, the most significant and hard-won asset securitizations last year were not surprisingly structured financings for distressed issuers. While the top two...

ANC deal not too shabby.(ANC Rental Corp.)
January 6, 2003... A close runner-up to Providian's financings, Deutsche Bank Securities managed to structure a debtor-in-possession securitization for bankrupt rental car concern ANC Rental Corp., parent company of Alamo Rent a Car and National Car Rental. ...

How mortgage debt can look like credit cards.
January 6, 2003... Prepayment risk was forefront in the minds of many home-equity ABS investors in 2002, given the refinancing wave that maintained momentum throughout the year. With this as a backdrop, underwriter Banc One Capital Markets and issuer GMAC...

Synthetic consumer debt in the U.S.(Bank of America's Consumer Credit Reference Index Securities Program)
January 6, 2003... One of the most difficult asset-backed transactions for U.S. investors to get their arms around this year was likely Bank of America's Consumer Credit Reference Index Securities Program, dubbed CRISP 2002. While the practice of synthetic...

MBS recap: Record strong performance for mortgages in 2002.
January 6, 2003... Despite record high prepayments, mortgages were the second highest performing sector in 2002. According to researchers from Lehman Brothers, through mid-December, the MBS Index outperformed Treasuries by 150 basis points. Mortgages benefited...

CMBS seen tightening on decreased supply in 2003.(Collateralized mortgage backed securities)
January 6, 2003... With CMBS supply expected to dip in 2003 - causing triple-A CMBS spreads to tighten further -analysts believe technicals will improve for CMBS spreads, as the sector's steady performance in the last couple of years has created a growing...

UBS significantly outpaces competition in 2002 league tables.(Brief Article)
January 6, 2003... In a feat reminiscent of last year's performance, UBS Warburg once again leads the RMBS year-end manager league tables. The firm is in first place in the year-end manager activity rankings for both agency and non-agency mortgage-backeds,...

KfW rides on promise of more.(Kreditanstalt fuer Wiederaufbau)
January 6, 2003... German state-owned development bank Kreditanstalt fuer Wiederaufbau (KfW) launched its first non-German transaction from the PROMISE securitization program at the end of December. Last year, a total of 11 new transactions were completed...

Europe ABS put to the test and stands up strong.
January 6, 2003... The European ABS market continued to demonstrate depth and maturity in 2002, illustrated by a substantial increase in volume. The market saw approximately $130 billion by the end of 2002, according to reports, compared to just a few years ago...

Holiday relief for Southern Cone's embattled producers.(Uruguay and Argentina)
January 6, 2003... Stagnant growth, pervasive unemployment and a maligned currency do not exactly make for a cheery holiday season in any country. But after years of grueling recession, Uruguay and Argentina have seen much worse, to say the least, and two deals...

Solly swipes through US$125-million Central American credit-card deal.(Brief Article)
January 6, 2003... Traditionally the poor cousin to Latin America's larger issuers, Central America won respect in 2002. As deals evaporated elsewhere, New York bankers descended on the sleepy countries of the isthmus. Though some transactions - like Banco...

Colombia's Colpatria gets by with a little help from Fannie Mae and IDB.(Banco Colpatria)
January 6, 2003... Capitalizing on Colombian investors' new familiarity with the residential housing sector, Banco Colpatria issued a Ps73 billion (US$25.8 million) MBS on Dec. 18. The country's homegrown Fannie Mae, Titularizadora Colombiana, gave birth to a...

Whispers.(Asset securitization briefs)(Brief Article)(Calendar)
January 13, 2003... News Last Tuesday, Union Acceptance Corp. received its third extension from a bankruptcy-court order preventing bond insurer MBIA from attempting a forced servicer change since filing Ch. 11 Oct. 31. A press release from the company - also...

Argentina's YPF leaves unmarked gift under Christmas tree: Participants keep oil giant's slippery deal under wraps.
January 13, 2003... Twas two nights before Christmas and all through the markets, not a creature was stirring well, that's at least what Argentina's YPF might have you believe. As quiet as a yuletide mouse, the oil giant crept in with a slick export receivables...

Non-U.K. whole biz deals feasible?(Industry Overview)
January 13, 2003... More companies outside of the U.K. are looking to reap the benefits of whole business securitizations, but with insolvency regimes outside Britannia less bondholder- friendly, getting true whole business structures off the ground will require...

Tax cut could hit REIT-backed CDOs.
January 13, 2003... If implemented, President Bush's elimination of an investor-side tax on dividends could indirectly impact the ABS market, though not in any sweeping way, analysts said. Existing multi-sector CDOs with real estate investment trust (REIT)...

New study looks at issuance trends.(Moody's Investors Service is releasing a report on ABS supply trends)(Brief Article)
January 13, 2003... Moody's Investors Service this week is releasing a report detailing historical ABS supply trends, breaking down issuance into several subsets, such as tranches per deal, ratings distribution, and collateral backing supply. The study aims...

ABCP spikes in December but still slow behind FASB.
January 13, 2003... As expected, in December outstanding ABCP showed its largest volume gain of the year, climbing more than $12 billion to $726 billion, still almost $20 billion shy of the market's $745 billion peak in December 2001. Historically, December...

GMAC auto deal gets 2003 off and running.(General Motors Acceptance Corp.)
January 13, 2003... The first full week of the New Year was slow to develop, as only top-tier issuers braved the primary market. While $4.7 billion had priced as of market close Thursday, an additional $3.5 billion was on track for a Friday pricing. As was the...

Growing pains and Synthetic CDOs.
January 13, 2003... Following is a Q&A with Bank of America Securities CDO Researcher Lang Gibson, who authors a weekly research report titled Structured Credit Strategy Weekly. Gibson was one of the first bank researchers to specifically incorporate derivatives...

Beacon Hill ousted from CDOs.(Ellington Management replaces Beacon Hill Asset Management)(Brief Article)
January 13, 2003... Hedge fund Beacon Hill Asset Management has been replaced by Ellington Management for all its outstanding vehicles, following the realization that Beacon lost roughly half its asset value late last year, according to reports. While there were...

Canadian hot water deal marketing.(Consumers Waterheater is the firm)(Brief Article)
January 13, 2003... A C$500 million consumer utility receivables deal for Consumers Waterheater began roadshowing last Thursday in Winnipeg, with Vancouver, Montreal and Toronto to follow via joint leads TD Securities and Scotia Capital. Sources noted that...

Troubles at Triton, as key men walk.(Triton Partners)(Brief Article)
January 13, 2003... Three principals of CDO collateral manager Triton Partners, said to be "key" to the firm's CDO of CDOs team, walked out on Triton last week. The defection included Arturo Cifuentes and John Polansky, both former seniors at Moody's...

CDO market verdict: volume up, record setting downgrades.(Industry Overview)
January 13, 2003... As year-end reviews of the CDO market trickle out from the banks and rating agencies, one might best describe the mixed bag of viewpoints as "steady-as-she-goes." While the temptation to pop open a bottle of bubbly was there, market players...

CDO Chatter Box 1/13/03.(Asset securitization news briefs)(Brief Article)
January 13, 2003... * HarbourView Asset Management, a subsidiary of Oppenheimer Funds, is out in the market with its HarbourView CLO V. The CDO is being marketed by Salomon Smith Barney, the firm's first for 2003. Spread talk pegs triple-A pricing at 50 to 55 bps...

Derivatives vet opens discount swaps shop.(Connors International has been started up by Clive Connors)(Brief Article)
January 13, 2003... Clive Connors, a longtime interest-rate swap player, recently started up Connors International, a new over-the-counter discount money broker using a flat, $10 per million fee pricing structure, instead of the standard sliding fee structure used...

Morgan Stanley backs MBIA, warns of further headlines in cards.
January 13, 2003... Morgan Stanley's global director of securitized product research Chip Schorin endorsed bond insurer MBIA Inc., saying that the odds of MBIA having its triple-A ratings cut due to poor CDO performance are unlikely given the senior positions of...

2002 Loan Recovery Rates Fall to All-Time Low.
January 13, 2003... Standard & Poor's annual default recovery survey, released last week, painted a grim picture for holders of defaulted loans. As a result of the record defaults of 2002, recovery rates - both in terms of ultimate recovery and trading price...

MBS recap: Technicals dominate fundamentals.(Industry Overview)
January 13, 2003... Mortgages have been on a tear since the start of 2003. Banks, CMO desks, insurance companies and money managers have all been heavy buyers. Spreads in Fannie Mae 30-year 5.5s through 7s have tightened an average of 18 basis points since the...

Mortgage market awaits perfect storm.
January 13, 2003... Despite favorable technicals in the mortgage market, the sector is actually in a "precarious" state as it faces the risk of a downside move. "The downside can come in one of three forms," said Andrew Davidson, president of the Andrew...

Analysts ask why some rolls trade through fail?
January 13, 2003... Rolls trading through fail is seen as an indication of the growing supply/demand imbalance in the mortgage market, said analysts from JPMorgan Securities in a recent report. They said that currently most rolls are trading near 0% implied...

W.P. Carey & Co.'s sale/leaseback success.
January 13, 2003... As banks and the capital markets continued to peer warily through the blinds at corporate borrowers last year, many companies were forced to canvass previously uncharted sources of capital. Since most corporations have at least one address,...

Italian Government looks further down the credit curve.
January 13, 2003... Some skeptical market players predicted the end of securitization as a means of sovereign finance in Europe following the implementation of Eurostat's new, more stringent guidelines on how governments must account for their securitizations. A...

Euro ABS Market slow, but underway.
January 13, 2003... Market predictions hint that 2003 could bring record-high issuance volumes, generated primarily by the strength that European asset securitization structures have exhibited in the face of economic stress. While the pace this month has been slow...

Chilean investors find Santander deposits tough to swallow.(Santander Securitizadora)
January 13, 2003... After discovering scant interest among investors, Chile's Santander Securitizadora has buried plans to issue a bond backed by time deposits. "There wasn't enough interest, so they decided to kill the deal," said a source familiar with the...

Mexico's Santander squeezes in a couple of deals before year-end.
January 13, 2003... Mexico's domestic securitization market kept up a brisk tone through the end of 2002, boding well for a country that is drawing increasing attention from bankers on the Street. As expected, Santander kept the market alive in late December. The...

Brazil's Banco Itau prepares US$200m MT100 via Nomura.(Nomura Securities)(Brief Article)
January 13, 2003... Banco Itau has been preparing the third installment of its MT100 securitization program with an unlikely underwriter, Nomura Securities. The issuer sold a US$150m 3.8-year wrapped securitization of electronic trade payment receivables in July...

Colombia's CBI: cultivating commodities into the New Year.(Commodities & Banca de Inversion)(Brief Article)
January 13, 2003... While the holiday lull lingers in Colombia's domestic market, Commodities & Banca de Inversion (CBI) is upsizing a palm oil securitization, Fidupalma, to Ps50 billion (US$17.4 million) from Ps20 billion (US$7.0 million). "We tinkered with the...

Whispers.
January 20, 2003... People Tom Hourican has joined underwriter Societe General as global head of securitization risk management, reporting to global securitization chief Greg Medcraft. Also, as previously reported, SocGen has hired Jim Frischling to head the...

In tough times, monoline bond insurers must flex their muscles.
January 20, 2003... Even though bond insurer MBIA has its hands full these days, the recently announced interim - but still pending - resolution with bankrupt auto lender Union Acceptance Corp. is one less worry. But how MBIA handles adversity goes a long way in...

Latin cross-border game to recover : While domestic players never left the field.
January 20, 2003... As 2002 came to a close, an audible sigh of relief wafted through the Latin American cross-border market. By all accounts, it was an appalling year for securitizations. Cross-border volume from the region shrank a dismal 43% to US$3.9 billion,...

Two CLOs on upgrade watch.
January 20, 2003... If one debt instrument could be designated a long shot in this environment, distressed debt CLOs might be the frontrunner. So what's the story with the two deals on watch for upgrade - a great rarity for any CDO - that are backed by, primarily,...

FASB says its ready to issue final decisions: Were expected at end of week.
January 20, 2003... As of press time, the Financial Accounting Standards Board (FASB) had not released its final drafting of ARB No. 46, the latest rendition out of the SPE consolidation project, now dubbed "Consolidation of Variable Interest Entities." The...

Swift recoveries hoped for in FFCA deals.
January 20, 2003... ABS investors and credit analysts are awaiting the outcome of the Swifty Serve (EZ-Serve) Chapter 7 liquidation and assets auction, which will directly impact recovery levels in three GE Franchise Finance deals, formerly Franchise Finance Corp....

FIB SBA 7(A) deal downgraded.
January 20, 2003... Last week, Moody's Investors Service downgraded several classes, including former Aaa' rated seniors, of securitizations from First International Bank, a subsidiary of UPS Capital. According to the rating agency, this is the first instance of a...

Fitch restructures ABS ratings group.
January 20, 2003... A shift of responsibilities at Fitch Ratings has moved some familiar names into new roles. Effective Jan 1, the moves include an expansion of the consumer asset group as well as the creation of a credit research group, which will follow...

Conseco bankruptcy triggers Early Am. for private label trust.
January 20, 2003... One month after Conseco Inc. filed for Chapter 11 bankruptcy protection, the company's private label credit card trust entered early amortization last Wednesday. Triggered specifically by the bankruptcy filing rather than any deterioration in...

With prepay penalties discouraged, NIMs may no longer work.
January 20, 2003... Last year net interest margin (NIMs) activity was robust, but views are mixed on the future of the market. As regulators continue zeroing in on lending abuse, lenders could be forced to pare down the use of prepayment penalties, currently the...

Pooled aircraft deals barely out fly EETCs.
January 20, 2003... Last week a number of articles emerged in the press addressing write-downs that companies and investors are facing for exposure to airline enhanced equipment trust certificates (EETCs), following the failure of several major airlines, including...

Maturing investors trend toward CDO customization.
January 20, 2003... Coming off a less than stellar year for CDOs, market watchers are anxious to cast nets in waters teeming with life. Their best fish-finder, it seems, may be the increased use of "customization." As has always been the case, collateralized...

CDO Chatter Box.
January 20, 2003... Some of Stanfield Asset Management's CDO investors are so angered with alleged par building trades that they're spilling the beans about the purported transaction. According to sources, Stanfield purchased a total of $13.75 million in Airplanes...

New Year, but ABS Market sings same song as Jan. 02: Top tier issuers probe the buyside.
January 20, 2003... I t was the best of times, it was the worst of times.... Unlike the last two January's new issuance is hitting the primary market at a moderate pace this year, pricing just over $10 billion in the first two weeks of the New Year, versus...

S&P new asset vet moves to the buyside.
January 20, 2003... Bern Fischer, formerly of the new assets group at Standard & Poor's, has moved over to PartnersRe, joining the firm's "New Solutions" structured finance group, a next-generation ABS buyside firm. PartnersRe plans to research, invest and...

MBS recap: Range-bound market keeps supply at bay, demand steady.
January 20, 2003... Mortgages continued to grind tighter last week as the technical situation remained the dominant theme. Spreads in current coupon 15s and 30s moved in five basis points over the Wednesday-to-Wednesday period. Meanwhile, 6.5% and 7% coupons were...

New policy changes good for Ginnie II program.
January 20, 2003... Street analysts said that recently announced changes to the GNMA II securitization program would give many lenders added flexibility in originating and securitizing Ginnie Mae loans, thereby enhancing issuance in the GNMA II sector. These...

CMBS roundup: Preview for 2003.
January 20, 2003... The year has started off quietly, but since the conclusion of the Commercial Mortgage Securities Association's CMBS Investors Conference on Tuesday last week, there is one marquee deal making the rounds. The first out of the gate appears to be...

Italy charges off balance sheet; analysts wonder "How much is too much?".
January 20, 2003... The Italian Treasury may be signaling that it's on track toward writing some debt off of its balance sheet; market analysts, however, are questioning the prudence of such one-off measures in the long run. The latest development shows that...

European primary lineup builds, but deals are slow to price.
January 20, 2003... Although this month's primary lineup may be somewhat overshadowed by activity in the secondary markets, it's likely that new deal issuance will nonetheless set a January all-time record, market sources said. According to traders, there was...

European investors stay tuned to synthetic CDOs.
January 20, 2003... While the wave of downgrades that toppled a number of CDOs in 2002 should ripple into 2003, appetite is strong, and investors are still willing to test the new renditions of synthetic structures. According to market reports, synthetic deals...

Whispers.(appointments)
January 27, 2003... People Michael Youngblood has joined GMAC-RFC Securities as director of research. He will head research initiatives related to agency and non-agency residential mortgage-backed securities as well as analyze trends in metropolitan housing...

After S&P announcement mortgage lenders have "Georgia On My Mind".
January 27, 2003... In the wake of Standard & Poor's recent announcement that certain loans falling under the Georgia Fair Lending Act (GFLA) will not be allowed in S&P-rated loan pools, several mortgage lenders have publicly announced that they will pare down or...

Down the credit curve in Europe.
January 27, 2003... A new breed of investor has aggressively taken the reins of sub investment grade European securitizations, and banks are prepared to meet the new demand by adding personnel. At the Morgan Stanley investors' roadshow in London last week,...

Market weighs impact of FIN 46.
January 27, 2003... Today the Strategic Research Institute is hosting a one-day conference titled "The Future of Off-Balance Sheet Financing," smartly timed to capture the climax of accounting uncertainty, as it trails the final release of Financial Interpretation...

Trustees look to dodge single-certification role.(Brief Article)
January 27, 2003... Now that the controversial Sarbanes-Oxley Act has taken effect and 1Q03 financial reports are due at the end of the quarter, the trustee community is banding together to clear the hurdles of single-party certification. Along with the American...

Law firms in a close race for ABS, MBS & CDO counsel.
January 27, 2003... Competition is tight for legal fees in this highly litigious society. Last year, very little business separated the top securitization legal shops from the rest of the pack across the ABS, MBS and CDO markets. Law firms Sidley Austin Brown...

Reports surface of ABS-friendly counter to Conseco Ch. 11 re-org.
January 27, 2003... In what could be the most important showdown for the manufactured housing sector of the ABS market, bondholders - led by a practically defaulted B2 class ABS holder - hope to trump CFN Investment Holdings in the reorganization plan of bankrupt...

Wide array of assets represented: focus on earnings.
January 27, 2003... Just $4.5 billion of domestic new-issue ABS supply priced in the holiday-shortened U.S. primary market last week. Assuming trades that had yet to price as of press time, U.S. volume for the week was at $7.9 billion. Supply was fairly balanced...

Europe's CDO market moves, players aren't sure where: Alternative asset classes strike interest abroad.
January 27, 2003... At this point it's old news that the CDO market stumbled about in a stupefied-like manner for most of 2002. However, the size and depth of the CDO market is much larger in scope than just the United States. So what's happened to the overseas...

CDO Chatter Box.(Brief Article)
January 27, 2003... The strong performance of two CDOs containing distressed debt CLOs (see ASR 1/20/03) has gone a long way in putting these new vehicles on the map. Now market sources are talking about the granddaddy of them all, as sources report a rating...

Rough seas for first time issuer in troubled sector.
January 27, 2003... Investors and analysts point out that now might not be the best time for a first-time issuer of equipment assets to make a go at it in the U.S. ABS market. There are no convincing signs that the economy is improving markedly and, although it...

A closer look at Financial Accounting Interpretation No. 46.
January 27, 2003... Initially conceived in 2002 as an interpretation for consolidation of special purpose entities, FIN 46 instead divides the population of legal entities into those consolidated through voting interests and those consolidated by "variable...

Experts uphold the down in coupon trade.
January 27, 2003... With the 5.5s and 6s currently rolling very special, there is a compelling reason to move down in coupon. In fact, several researchers on the Street last week favored the down-in-coupon trade despite the extension risk on the horizon. ...

MBS Recap: Range bound market keeps things quiet.
January 27, 2003... Last week's trading session was range bound and uneventful. Originator selling held at an average of $1 billion per day, while investor flows were mixed. There was profit-taking, as well as steady interest in lower coupon 30s. Over the...