Asset Securitization Report articles from January 2004

Asset Securitization Report archives from January 2004

Whispers.
January 5, 2004... HSBC has hired ABS veteran Mike Normile as a managing director to head its U.S. term origination group, a move in the works for months. Normile, who will report to Managing Director and securitization chief Jon Bottorff, left his post as head...

Cautiously bullish on '04 volume.
January 5, 2004... Unlike the start of last year, when uncertainty reigned, the outlook for the U.S. ABS market is notably positive this year. Some are even predicting a rebound in the beleaguered manufactured housing sector. New issue supply is expected to...

ABCP closes out in turmoil: CIBC banished from conduit activity.
January 5, 2004... In a settlement with Canadian and U.S. regulators, including the Securities and Exchange Commission, Canadian Imperial Bank of Commerce (CIBC) will be precluded for the next three years from using its ABCP conduits to finance "off-balance...

E-cash becomes Elektra.
January 5, 2004... A ubiquitous sector in Latin America's cross-border arena has gone local. In a deal that signals the return of a structured finance pioneer, a unit of Mexican retail giant Grupo Elektra is securitizing fees on electronic money transfers. ...

Down the chimney comes FIN 46-Argh!!! Expect formal commentary on the revision to trickle out this week.
January 5, 2004... A number of significant developments in securitization accounting developed during the last few weeks of December, setting the stage for this year's trials and tribulations. First and foremost, the Financial Accounting Standards Board...

HVB group head resigns.
January 5, 2004... Tom Glynn has resigned from Bayerische HypoVereinsbank (HVB) as of the New Year, marking the end of an era of sorts, as Glynn is credited with establishing HVB's strong presence in the securitization and derivatives space. HVB has been in...

Whole loan market offers liquidity to auto lenders But can they score capital relief?
January 5, 2004... Securitizations stemming from auto whole-loan sales have emerged as an attractive alternative liquidity source for lenders, accounting for $3.3 billion in new-issue term ABS last year, and almost $7.8 billion over the past two years, according...

Hancock's new CDO: A deal called Q.
January 5, 2004... John Hancock Life Insurance Co. recently launched and priced Signature QSPE Limited, a static bond-backed CDO structured to satisfy QSPE criteria as defined by the current version of FAS 140. The CDO market does not often see static, cash...

Citigroup tops JPMorgan, maintains comfortable lead in ABS.
January 5, 2004... Citigroup Global Markets secured the top spot in the ABS underwriter league tables for 2003, maintaining a $10 billion lead on its closest competitor. In 2003, Citigroup sold $65.2 billion of primary ABS volume - a 31.9% increase in...

GMAC-RFC leading ABS issuer for second year running.
January 5, 2004... As expected, mortgage originators dominated the leading ABS issuers in 2003, according to numbers compiled by Thomson Financial. With the mortgage sector accounting for one-half of the entire market, it is hardly surprising that four of the top...

Despite rate concerns, calm predictions for mortgage industry.
January 5, 2004... The outlook in early 2004 looks positive for mortgages due to strong carry, a range-bound rate outlook, a continued steep yield curve, slowing prepayments, higher Treasury issuance with lower mortgage issuance, and a normal uptick in buying...

Credit is the big story in 2004, CMBS analysts say.
January 5, 2004... Into the year, CMBS analysts believe real estate lending has remained reasonably disciplined and safe. However, there are certain sectors that investors should be eyeing for potential trouble. JPMorgan Securities mentioned two "yellow...

UBS conquers 2003 in the RMBS leagues.
January 5, 2004... UBS rounded out the year by once again bagging the No.1 spot, as it emerged at the top of the manager activity rankings for both agency and non-agency MBS, according to the final results from Thomson Financial's RMBS league tables for 2003....

A look into European Fundamentals for 2004.
January 5, 2004... It was business as usual for European market dealers as a number of transactions rushed to price in the brief repose before the New Year's Eve slowdown. That said, a busy start of the year is expected, as already a number of deals have begun to...

Lactose intolerance hits Brazilian Parmalat investors.
January 5, 2004... Things appear to be going sour for a Brazilian deal linked to disgraced dairy company Parmalat, despite a reiteration two weeks ago of its triple-A national-scale rating by Standard & Poor's. "There will probably be an early redemption" of the...

Door opens for unwrapped 10-yr product from Brazilian banks.
January 5, 2004... A recent 10-year transaction by Banco do Brasil augurs well for longer-dated unwrapped Brazilian bank deals, sources said. Despite talk that lead manager Deutsche Bank was initially having trouble getting a chunk of the paper off its book...

Whispers.
January 12, 2004... Moody's Investors Service has named Brian Clarkson as its new executive vice president and co-chief operating officer, in charge of global structured finance and global public finance. Also promoted to Co-Chief Operating Officer, working...

The banged-up best buys in CDOs.
January 12, 2004... Though some argue the "no brainer" buys in the relatively new secondary CDO market disappeared six months ago, structural features of securitization have, in some cases, created a timing/rating arbitrage, whereby savvy investors can pick up...

Brazil returns, Mexico towers.
January 12, 2004... If 2003 had an overarching theme in Latin America's cross-border market, it was the return of Brazil. Having shed anxieties over the election of leftist president Luiz Inacio Lula da Silva, Brazilian issuers turned around the dismal mood of...

Term chief in place, HSBC looks globally.
January 12, 2004... With the hiring of a new managing director to run its term securitization effort, and an affiliated issuance unit that has rival bankers jealous, HSBC Securities aims to become a full-service ABS shop for both its issuer and investor clients....

ASF investor forum to grade' market participants: An interview with Dan Stachel, State Street Global Advisors, and friends.
January 12, 2004... It's no secret that some of the hottest public exchanges on the state of the securitization market have involved a poker-faced Dan Stachel, head of fixed-income research at State Street Global Advisors, typically during panel discussions at ABS...

CSFB launches auto ABS issuer profiles.
January 12, 2004... A new research product from Credit Suisse First Boston, focusing on non-prime auto loan ABS issuers, was unveiled last week. The inaugural Auto ABS Issuer Profile, offering a peek at what the team plans to publish multiple times throughout the...

12b-1 fee ABS faces next challenge.
January 12, 2004... Although mutual fund fees have come under heavy scrutiny from Wall Street's favorite Attorney General, it is unlikely to have a negative impact on the credit quality of any outstanding transactions, sources said. New supply, however, may become...

Lack of supply meets with strong demand to kick off 2004.
January 12, 2004... The U.S. ABS market's first full trading week of 2004 was, while slow, eventful nonetheless. Although just four new issues had priced as of Thursday's market close, for a total of $3.08 billion, market clearing spread levels showed the impact...

Nesbitt nabs from RBC as Canadian firms ramp up.
January 12, 2004... Harris Nesbitt, a unit of the Bank of Montreal, intends to bulk up its presence in the term ABS market with its acquisition of a six-person asset finance team from competitor RBC Dain Rauscher. Harris Nesbitt Head of U.S. Securitization...

Court delays DVI servicing transfer agreement.
January 12, 2004... Although an agreement between all creditors of DVI Inc. has been reached and the servicing transfer has been set for weeks, the proposal is currently being held up by bankruptcy court, sources said, which, for unknown reasons, refuses to hold...

Canadian CMBS market up 32%.
January 12, 2004... Commercial mortgage-backed securities continued to pick up steam in Canada last year, with volume hitting $3.3 billion, an increase of close to 32% over the $2.5 billion that came to market in 2002. Moody's Investor Services Vice President...

Canadian pipeline kicking off in 2004.
January 12, 2004... Two deals are making the rounds in Canada, supporting the view that 2004 will be another record year for the sector. Schooner Trust Series 2004-CCF1 is kicking off the first Canadian CMBS transaction in 2004, and the fifth transaction for...

Supply drops significantly as refi boom ends.
January 12, 2004... With the refinancing boom over, the mortgage fixed-rate supply should plunge, along with the drop in issuance of 15-year product, analysts said. However, an increase in Ginnie Mae paper and a growing hybrid ARM share are on the horizon. In...

Carry us into the New Year.
January 12, 2004... Mortgages awoke from their long winter's nap and took off as investors embraced attractive carry, declining prepayment speeds, less supply and an expected range-bound rate environment. The strong demand more than offset the...

Turnover will drive prepayments, says Lehman.
January 12, 2004... After the refinancing boom that characterized 2003 prepayments, turnover should be the story in 2004. "As long as the economic recovery remains on track, mortgage rates will remain elevated and refinancings will become less of an issue,"...

Brazil FIDCs get respect in 2H.
January 12, 2004... Mirroring cross-border activity, domestic issuance in Brazil picked up in the second half of 2003. But unlike the large banks and exporters that tap the dollar market, local issuers had to contend with an ugly interest rate environment. Fund...

Whispers.
January 19, 2004... Maxim Group LLC, a boutique shop with offices in New York and Chicago, has hired Rocco Capoccia, Armand Pastine and Brad Young away from Williams Capital with plans to start an institutional fixed-income trading operation. All three will be...

CFN's senior servicing fees stress Conseco deals, Radian takes a hit.
January 19, 2004... The Conseco Finance servicing fee restructuring delivered its first visible blow to the industry last week. Double-A rated guarantor Radian Asset Assurance, acting as reinsurer in a deal wrapped by Radian Insurance, announced it would likely...

Brazil's milk dud.
January 19, 2004... The world's most notorious dairy queen Parmalat might be leaving a bitter aftertaste in the mouths of some analysts. Last week, Brazilian stand-alone agency SR Rating publicly weighed in on a rating by rival Standard & Poor's on a...

JP Morgan Chase Bank One, can I help you?
January 19, 2004... The planned merger of JPMorgan Chase and Bank One Corp. would likely create an ABS powerhouse, with a captive credit card origination unit rivaling Citigroup, which was 2003's lead ABS underwriter by nearly $10 billion. JP/One's underwriting...

ABS has best year in 03, lags corporates.
January 19, 2004... The asset-backed market posted its best year of relative value in 2003, according to returns tracked by researchers at Lehman Brothers. However, it was trounced by the unsecured credit market, which also enjoyed its best year to date. Driven by...

FSA surety, backup servicer nullify LG Card ABS worries.
January 19, 2004... State-run Korea Development Bank said that it would provide $4.5 billion in relief to distressed local credit card provider LG Card, which was one of the first Korean issuers to enter the cross-border ABS market with its Credipia 2001-1 class A...

U.S. ABS sees continued strong demand in heavy supply.
January 19, 2004... U.S. ABS activity picked up last week, as $4.45 billion of supply priced as of press time with an additional $6.67 billion slated for completion Friday. Including the $1.6 billion of non-conforming MBS to hit, the primary market saw $12.7...

CDO exposure to Parmalat continues.
January 19, 2004... The mess Parmalat has spilled across the capital markets continues to spread, as Fitch Ratings downgraded Tullas CDO last week, an action largely stemming - though not entirely - from its exposure to the Italian milk maker. The CDO, however,...

TBMA redesigns trustee reports, but will market adopt a new format?
January 19, 2004... A new standardized CDO trustee report could make life a bit easier for investors before the end of the first quarter. The trick is getting market participants to use it. The Bond Market Association just released its final draft of a...

Moody's: 4Q03downgrades of ABS more than double 3Q03.
January 19, 2004... Moody's Investors Service has been hard at work keeping tabs on the ups and downs in structured finance - namely in the form of upgrades and downgrades. In a report due out this week, analysts at the agency found the number of downgrades...

After 5-year delay, Peachtree completes legal settlement ABS.
January 19, 2004... With the completion of its long awaited, first-ever term securitizations, Peachtree Settlement Funding has hopes to become a regular ABS issuer, a company source confirmed. Following last week's $70 million private placement - Settlement...

ING considers new CLO with distressed basket.
January 19, 2004... ING Capital Advisors, an investment advisor specializing in managing floating-rate senior secured loan portfolios and high-yield bonds, has been talking to underwriters and plans to launch a new collateralized loan obligation (CLO) by the end...

The nth rally, and life goes on.
January 19, 2004... After the recent really wacky rally resulting from disappointing employment figures, analysts last week, once again, warned about refinancing and convexity triggers being hit. As of last Wednesday, JPMorgan Securities turned neutral on the...

Patent granted for securitization of distressed loan platform Wachovia analyst raises red flag.
January 19, 2004... The structured finance market represents a world of entrepreneurship, churning out new asset classes since the 1980s. Yet a newly minted patent from the United States Patent Office sheds light on how that innovation may soon be affected, should...

Convexity, prepayment risks rise as 10-year yield slips below 4%.
January 19, 2004... Mortgage spreads were hit as buying slowed down following the weak employment report. The 10-year yield rallied 18 basis points on Jan. 9 to close at 4.08%. Last week, the market stayed firm and finally closed below 4% on Wednesday. Originator...

Two Canadian CMBS price.
January 19, 2004... Both Falcon Trust and Schooner Trust priced their Canadian CMBS transactions last week, marking an auspicious start to the New Year. The C$172.65 million Falcon Trust deal is divided into four classes of securities: C$125.6 million of...

New test established to confirm existence of housing bubbles.
January 19, 2004... With a potential housing bubble still a possibility in the minds of a few, analysts at GMAC RFC Securities recently issued a new quantitative measure to determine which metropolitan statistical areas (MSAs) may be subject to a drop in housing...

Cautious optimism to drive European CDO market in 2004.
January 19, 2004... Investors will continue to be cautious in Europe's CDO land this year. The credit deterioration that defined the first half of 2003 and the tightening collateral spreads that limited issuance for the second half of the year have produced a...

European market still keen on RMBS.
January 19, 2004... The equivalent of more than US$21 billion of RMBS is expected to price in the coming months. If the tight spread levels forecast for the new deals are any indication of the market's appetite, buyers are more than willing to rekindle a love...

Brazilian pay TV tunes into popular investment vehicle.
January 19, 2004... A pay-TV unit of Brazilian publishing powerhouse Editora Abril is looking to tap a new audience. The latest issuer to tune into FIDCs - the nation's most popular investment vehicle - TVA has an R$120 million (US$43 million) program in the...

Uruguayan rice producers find nourishment from market.
January 19, 2004... Emerging from a few years of hostile conditions, Uruguayan rice producers are now tilling the field of high finance. As part of a US$35 million securitization of future flows into a government-administered rice fund, debt-addled farmers will...

Mexican state of Sinaloa to tap market this week.
January 19, 2004... This week in the Mexican market, the state of Sinaloa is slated to price a 10-year deal. Sized at Ps830 million (US$76 million) in inflation-indexed units (UDIs), the transaction will be the first off of a Ps1.5 billion (US$138 million) program...

Whispers.
January 26, 2004... The American Securitization Forum expects more than 1,000 attendees for its inaugural ASF 2004 ABS Summit in Scottsdale, Arizona this week. This tops the goal of 750 the ASF had initially hoped would attend. ABS strategist Anne Kari is no...

Strong demand for U.K. RMBS drives overseas spreads tighter Bonds aimed at U.S. buyers, however.
January 26, 2004... Although the European pipeline remains sparsely populated, with just four new issues marketing, the sheer size of the offerings more than makes up for any lack of supply. The four transactions circulating last week totaled GBP12 billion (E17.4...

Colombian e-cash boom.
January 26, 2004... Regulatory changes in Colombia are bound to add fuel to the hot remittance business among local banks. That appears to be piquing the interest of players familiar with the securitization of e-money transfers in the cross-border market, an asset...

When to expect convexity hedging?
January 26, 2004... Amid the recent rally, the mortgage market is wondering when or if convexity hedgers will re-enter the flow. Most participants agree that convexity-hedging flows will probably be back soon, though nowhere near the levels seen last summer. ...

The FAS 140 shindig - right of offset?
January 26, 2004... A new wrench has fallen into the FAS 140 amendment project. The Financial Accounting Standards Board has reportedly postponed decisions related to the amendment until several issues are clarified. Last week, FASB had planned to discuss...

FASB: Does 3% equity qualify as trivial?
January 26, 2004... While the securitization accounting community sighed with relief at the revision to Financial Interpretation No. 46, plenty of gripes are still echoing through the market. Last week, for example, researchers from Banc One Capital Markets...

Mortgage ABS continues pre-conference domination.
January 26, 2004... Mortgage ABS supply continued to dominate the U.S. ABS primary market last week, accounting for $10.6 billion of the $13.5 billion that priced throughout the holiday-shortened trading week. Additionally, as of late Thursday, there was...

Final tally for 2003: A phenomenal year for CDO volume.
January 26, 2004... After an extended trip with some pretty heavy baggage, 2003 marked the return of a strong collateralized debt obligation market. A number of positive influences bolstered CDO performance for the year, analysts reported. Record primary and...

Bank One enters retail card market.
January 26, 2004... In the latest round of large banking entities snatching up retail portfolios, Bank One Corp. - itself a central figure in M&A of late - became the proud new owner of Circuit City Stores Inc.'s private label and co-branded credit card...

FGIC into new assets, CDOs.
January 26, 2004... Financial Guaranty Insurance Corp. has big plans in 2004, eyeing asset-backed deals outside of HELOCs - the only ABS sector it has historically dabbled in - said recently named President and Chief Underwriting Officer Howard Pfeffer. The...

Moody's offers trend predictions for 2004.
January 26, 2004... While Moody's Investors Service analysts agree with most of the Street that ABS supply will come in flat to slightly higher in 2004, there are underlying stories to watch for throughout the year. Where will home equity supply come from if,...

RBS Greenwich puts finishing touches on CDO group.
January 26, 2004... With six CDOs under its belt and the team complete, RBS Greenwich Capital is looking to grow into a powerhouse in the sector in 2004. Although the focus of the RBS Greenwich team will remain in its historical areas of expertise - real estate...

Enron-type financial structure may hold surprises.
January 26, 2004... The stench of Enron's accounting games may still be in the air, this time wafting through the credit-linked notes market - a warning to investors not only in the those complicated financial instruments but also in more plain-vanilla loans and...

Is the market on the cusp of a refi boom?
January 26, 2004... Oops, the MBS market might do it again With the 10-year Treasury rate perched on the cusp of the 4% level and with the zero-point 30-year rate currently below 6%, the mortgage market is once again on the verge of prepayment volatility. ...

Good two-way flow keeps spreads firm.
January 26, 2004... Last week saw good two-way flows early on as originators brought nearly $3 billion on Tuesday and Wednesday, mostly in 5.5% coupons. Money managers and hedge funds readily absorbed it. Banks were mixed with profit taking noted; however, they...

Fannie reports fourth quarter results.
January 26, 2004... Fannie Mae last week released earning results for the fourth quarter, as well as its December monthly summary. The GSE reported fourth quarter core business earnings of $1.77 per share, which is up 6.6% from one year ago. The GSE's net...

MBA waxes optimistic on GDP.(Mortgage Bankers Association)(gross domestic product)(Brief Article)
January 26, 2004... The Mortgage Bankers Association is projecting gross domestic product growth rates to exceed 4% each year through 2006. The MBA also predicts that the 10-year Treasury rate will rise to an average 4.5% by the fourth quarter of 2004, and...

Brazil Parmalat deal succumbs, but vehicle prevails.
January 26, 2004... Compared to the billions of euros implicated in the Parmalat scandal and the untold losses already suffered by investors, a R$130 million (US$46 million) securitization in Brazil might seem inconsequential. But to some financial players in Sao...

Trade receivables loom in Uruguay with new law in effect.
January 26, 2004... A deal surfacing in Uruguay might turn out to be the first governed by a trust law that went into effect in late December. Sized at US$20 million, the transaction is a securitization of trade receivables by a public-service company, according...

Brazil's CPFL Piratininga plugs into FIDC.
January 26, 2004... Brazilian power provider Companhia Piratininga de Forca e Luz (CPFL Piratininga) is the latest issuer to join the craze of receivables investment funds (FIDCs) in the country. The company will issue R$284 million (US$100 million) in senior...

UBS & BBVA said to be nearing registration with Infonavit MBS.
January 26, 2004... Mexican housing agency Infonavit is understood to be on the verge of registering an MBS transaction put together by UBS Warburg and BBVA Bancomer, with Deutsche Bank Securities as co-lead, according to sources. The deal is heard at Ps1 billion...

Japan's CDO market volume up.
January 26, 2004... Small and medium-sized enterprise-backed securities (SMEs) made quite a showing in Japan's CDO market last year, Moody's Investors Service has found. Recent research from the rating agency shows that 24 CDOs were released into the market...

Spain implements new synthetic ABS laws.
January 26, 2004... Anticipated legal changes that facilitate synthetic securitizations under Spanish regulations are finally underway. An official amendment introduces, for the first time, rules regarding synthetic securitizations of loans and other credit...

New Basle Accord still on track for June deadline.
January 26, 2004... The Basle Committee signaled last week that it still intends to meet its self-imposed June deadline for the final draft of the new Accord. To that end, the committee released a series of proposed revisions based on recommendations that followed...

Fourth-Quarter 2003 Guarantor: Slim pickings in 4Q03 for the monolines.
January 26, 2004... Surety penetration in the U.S. market - or wrapped proceeds over total proceeds - crept up to 8.3% from 6.4% in the third quarter 2003, down from the 14% recorded for 4Q02. The monolines, however, anticipate an uptick in business as they...