Asset Securitization Report articles from July 2005

Asset Securitization Report archives from July 2005

Whispers.(Carrington Capital Management)(Fieldstone Investment Corp. )
July 4, 2005... Carrington Capital Management has hired Diane Citron, Esq to work in its Stamford, Conn. offices as general counsel and chief compliance officer, reporting to President and General Partner Bruce Rose. Citron was partner at law firm Mayer Brown...

MBNA issuance seen slowing post merger: Another blow to withering sector...
July 4, 2005... The acquisition of monoline credit card issuer MBNA Corp. by banking mammoth Bank of America likely means MBNA credit card ABS issuance volume will decline significantly, pulling precious volume out of an already floundering sector, sources...

Citigroup leads at the half.(asset backed securities market)
July 4, 2005... If half-year numbers are any indication, the ABS market is on its way to another record-breaking year, with $520 billion priced so far, versus $394 billion priced last year at this time, according to preliminary data maintained by Thomson...

RMS news spurs U.K. subprime tiering.(residential mortgage securities)
July 4, 2005... Kensington Mortgages announced in its latest investor report that its RMS 15 and 16 U.K. nonconforming RMBS deals had tapped the respective reserve accounts supporting the transactions. Although Fitch Ratings said that it would take no...

Credit risk manager put on the block.(Cremac)(Risk Management Group)
July 4, 2005... Asset management firm Cremac is seeking so-called strategic alternatives to sole ownership for its third-party credit risk management subsidiary Risk Management Group, according to Cremac President Joe Cafiero. Cypress Advisors is in the...

Merrill again dominates growing U.S. CDO market.(collateralized debt obligations)
July 4, 2005... As a testament to growing demand from investors for U.S. CDO product, total issuance in the first half of this year totaled $60.4 billion - nearly double the $35.5 billion under management in the first half of last year, according to data...

U.S. ABS primary cools to $9 billion.(asset backed securities)
July 4, 2005... Only in the hottest ABS market in recent history would $9 billion be considered a slow week, but compared to the rest of the month, it seems as if the market slowed a bit last week. The Federal Open Market Committee meeting resulted in another...

Lehman favors seasoned SLABS as rates reset.
July 4, 2005... When it comes to relative value in student loan pools, analysts with Lehman Brothers say the more seasoned the better. Student loan prepayment rates, driven by consolidation, are expected to skyrocket for 2Q05 as the interest rate on Stafford...

BofA parks in whole auto lot.
July 4, 2005... Banc of America Securities broke into the auto whole loan sector last week with an $890 million deal and emerged as the newest member of a cadre of investment banks that have moved into the sector in recent years. The deal, tagged BASAT...

Moody's implementing changes to its asset correlation framework.(Moody's Investors Service)
July 4, 2005... Moody's Investors Service is currently implementing changes to its asset correlation model within cashflow structured finance CDOs backed by ABS, RMBS, CMBS, and other CDO tranches, said Yvonne Fu, a senior vice president in the rating agency's...

Pre-investment information sharing rule could have an ugly side.
July 4, 2005... Securities offering reform legislation passed unanimously by the Securities and Exchange Commission last Wednesday that aims to broaden the ability for written information sharing prior to the final prospectus was the adoption of a rule that...

Home equity sub spreads finally show signs of widening.
July 4, 2005... Subordinate home equity spreads widened this week, as some speculated that investors began to grow nervous of risk involved in the deals, and a number of analysts released sour outlooks on residential mortgage performance, particularly in the...

Guggenheim expands structured finance effort.(Guggenheim Capital Markets, LLC)
July 4, 2005... Just a few weeks after its expansion into aviation finance, Guggenheim Capital Markets, LLC recently announced the hire of Ronald Iervolino as managing director of the company's structured finance unit and Steven Finnk as senior vice president...

MBS originator selling picks up.(mortgage backed securities)
July 4, 2005... Mortgage market activity was steady and two-way last week ahead of Thursday's Federal Open Market Committee statement. There was some early week support from index funds for month-end. Lehman Brothers stated that the MBS Index is set to extend...

Much ado about nothing: Did bank holdings really drop that much?
July 4, 2005... The Federal Reserve's recent report, showing large commercial bank passthrough holdings plunging by $63.5 billion to $367.3 billion, from $430.8 billion in the week ending June 15, spurred a flurry of theories as to how the big dip came about....

Lehman conquers the RMBS manager rankings.(residential mortgage backed securities)
July 4, 2005... Lehman Brothers topped the preliminary Thomson Financial first half of the year manager activity rankings for combined agency and non-agency RMBS, outpacing usual top placers UBS and Bear Stearns. Lehman scored top honors with $42.8 billion...

June prepays expected to rise.(Brief Article)
July 4, 2005... For the upcoming June report, current prepayment expectations show speeds increasing around 15% to 20% in 30-year FNMAs, and 10% to 15% in GNMAs. The expected jump is due to a higher day count, seasonals, and the increase in the Refinance Index...

Fannie Mae: The incredible shrinking portfolio.
July 4, 2005... As expected, Fannie Mae continued to shrink its mortgage portfolio in May by a whopping $24 billion, and is expected to do so further in June. This is the seventh consecutive month of Fannie portfolio contraction, bringing it down to the...

Backshop's client base gains momentum.
July 4, 2005... Enterprise software and services company Backshop, Inc. announced last month that eight CMBS, portfolio and B-note lenders have started using Backshop's cUnderwriter to manage their commercial real estate loan production. The lenders - AIG...

Accredited embraces European investor interest.(Accredited Home Lenders)
July 4, 2005... An established player in the U.S. market, Accredited Home Lenders, has been actively promoting its wares across the pond. The subprime mortgage lender travelled to last month's Barcelona Global ABS conference to answer questions from the...

Italy faces further pressure: possible downgrade.
July 4, 2005... More drama has descended on the Republic of Italy's mounting fiscal problems. After the country revised GDP forecasts that breached the fiscal deficit cap imposed by the European Commission, Italy now faces the repercussions from a downward...

June tops issuance volume as deals flood European market.
July 4, 2005... The pace in the primary market picked up last week, making the tally for June issuance the highest in Europe to date. By Thursday the week-to-date total European new issuance reached more than 5.0 billion ($6.04 billion). An aggressive primary...

In Brazil, FIDC players court first-time issuers.(receivable investment funds)
July 4, 2005... Brazil is abuzz with talk of first-time issuers, as a number of ABS greenhorns either award mandates, send out RFPs or thoughtfully consider unsolicited pitches. These potential deals also carry the promise of new asset classes, a welcome...

Turkey's DenizBank Settles Upsized Deal.(Brief Article)
July 4, 2005... Istanbul-based DenizBank, which entered the private placement market earlier this month, settled an upsized deal last week via sole agent Merrill Lynch, sources said. The Turkish bank, which was originally seeking $200 million, walked away...

A CMBS rarity is plucked from Mexican market.(Grupo Inmobiliario Cababie)(Brief Article)
July 4, 2005... Mexican originator GICSA has prepaid the Ps542.5 million ($51 million) outstanding of a seven-year deal issued in March of 2004. Backed by lease contracts from three shopping malls, the transaction was initially Ps620 million and priced at 180...

AIG in joint Japanese real estate venture.(American International Group Inc.)(Brief Article)
July 4, 2005... With activity in the rest of Asia unusually quiet this past week, Japan continued to be the major hub of securitization in the region. In an interesting move, U.S. insurer American International Group has aligned itself with property developer...

Pair of CCABS prepped in Japan.(credit card asset backed securities)(Kokunai Shinpan)(Brief Article)
July 4, 2005... Meanwhile, one of Japan's most frequent issuers, Orient Corp., has launched its latest transaction through its Clare SPV. The consumer finance company will issue 26 billion of bonds backed by loan and credit card receivables. Mizuho Securities...

Easy access to funds for Korean card issuers.(Brief Article)
July 4, 2005... Despite the struggles of Korea's two biggest credit card companies to stay afloat, there seems to be no problem raising money through the securitization markets. After it emerged earlier this month that Merrill Lynch is arranging a second deal...

Whispers.(briefs)
July 11, 2005... XLCA Managing Director David Czerniecki will move internally to XL Capital Investment Partners and serve as a member of the XLCIP investment committee that determines investments in XLCA's overall portfolio allocation to hedge funds and other...

CDO analyst Cifuentes alleges pressure from Wachovia.(Arturo Cifuentes)(collateralized debt obligations)(Wachovia Securities Inc.)
July 11, 2005... Research analyst Arturo Cifuentes filed a Sarbanes-Oxley complaint with OSHA last week alleging that his former employer, Wachovia Securities, attempted to influence and in some instances stop the publishing of fixed-income research reports....

EEMEA to serve up non-Turkish fare.(Eastern Europe, the Middle East and Africa)
July 11, 2005... For those who've had enough Turkey (see story p.19), the EEMEA region will soon offer fresh alternatives. Egyptian General Petroleum Corp. is prepping to join the future-flow big leagues, while Kazkommertsbank from Kazakhstan and Vneshtorgbank...

Punch refinancing tavern deal.(Punch Taverns PLC)
July 11, 2005... Punch Taverns announced last week that fixed rate noteholders in Pubmaster Finance Limited would be requested to vote on a restructuring package ahead of a bondholder meeting scheduled for July 25, 2005. The securitization would be increased to...

Law firm sued for its role in CDO structuring.(collateralized debt obligations)(Brief Article)
July 11, 2005... Greenwich NatWest and National Westminster Bank, subsidiaries of The Royal Bank of Scotland, are suing a law firm for its role in the structuring and documentation of a CDO for them some six years ago. Sabre Funding No. 1 was structured by...

Anthracite prices fifth high-yield CMBS CDO.(Anthracite Capital)(collateralized debt obligations)(commercial mortgage backed securities)(Brief Article)
July 11, 2005... Anthracite Capital priced a $249.5 million CDO last week to serve as a matched term funding source for a $478 million portfolio of two recently purchased CMBS deals and REIT debt. The CDO is the fifth for Anthracite, a REIT that invests in...

$7 billion hits U.S. ABS primary as summer rolls on.(asset backed securities)
July 11, 2005... The U.S. ABS primary market priced a trim $7 billion in the holiday shortened week. Last week's hawkish statement by the Federal Open Market Committee and a mild case of the summer doldrums may have conspired to keep the ABS market in decline...

BIS warns of unknowns in CDO, CDS risk.(Bank for International Settlements)(collateralized debt obligations)(credit default swaps)
July 11, 2005... The Bank for International Settlements warned in its 75th annual report that despite the flurry of events triggered by the General Motors and Ford Motor Co. corporate credit rating downgrades this spring, it remains to be seen how the credit...

Few surprises in HEL delinquencies, but change is on the horizon.(home equity loans)(Brief Article)
July 11, 2005... The percent of home equity loans characterized as seriously delinquent continued declining in March, according to data released by Moody's Investors Service. Although, the rating agency pointed out the percent of overall delinquencies were...

Up-in-coupon dominates MBS flows.(mortgage backed securities)
July 11, 2005... MBS flows were modest last week as many participants remained out on vacation. However, in early trading Thursday - following the terrorist bombings in London - mortgage spreads were wider on the flight-to-quality bid in Treasurys and the...

Ease in FNMA 5 squeeze relieves MBS market participants.(Federal National Mortgage Association)
July 11, 2005... The recent easing of the squeeze in 30-year FNMA and Gold 5s has removed some of the pricing and liquidity concerns in the market. "What is easing the squeeze in 5s is that there has been significant new origination in the coupon, helped by...

June 30-year prepay speeds increase.(conditional prepayment rate)
July 11, 2005... The July prepayment reports released last Thursday - reflecting June activity - showed FNMA speeds increasing by a little over 20%, with the highest accelerations coming from 30-year 5s and 5.5s. By contrast, 15-year speeds were quite muted,...

CMBS issuance to surge in 2005.(commercial mortgage backed securities)
July 11, 2005... Due to factors such as low interest rates and significant available capital CMBS issuance is expected to remain robust for the remainder of the year with volume thus far exceeding last year's by 65%. "We expect issuance will continue at its...

Business as usual at MBNA Europe.
July 11, 2005... Bank of America's acquisition of MBNA Corp. spells big changes for the credit card company but it is expected to have no immediate impact on the companies' European operations, as sources say that at the moment it's business as usual for MBNA...

PMI Europe takes mortgage insurance onto Pan-European level.
July 11, 2005... Over the past few years PMI Europe has worked to establish its presence throughout Europe and now the group plans to lobby for the use of mortgage insurance on a continental European platform. Christian Pierotti, PMI Europe's first head of...

German SMEs get new route to capital markets.
July 11, 2005... Commerzbank plans to launch an alternative funding platform for German small-to-medium sized firms that will give these businesses access to Schuldschein - borrower notes typically only accessible to larger German corporations. Under an...

Record European first half seen leading to slowdown.(asset backed securities issuance)
July 11, 2005... While European ABS issuance for the first half of the year came in at 132 billion ($157 billion) - topping 2004's first-half tally of 103 billion - the more amazing statistic is that approximately 70% of this issuance was printed during the...

Itau uses part of $345 million DPR to retire older securitization.(diversified payment rights)(Calyon Corporate and Investment Bank)
July 11, 2005... Brazil's Banco Itau closed a $345 million deal backed by diversified payment rights (DPRs) on June 30. Proceeds went, at least in part, to prepay an existing series off the bank's securitization program, according to Monica Arruda, a senior...

Turkish delights flood EM in 2Q05 - is there room for more?
July 11, 2005... A lot of investors got a piece of Turkey in the second quarter. The country's largest banks produced about $3.05 billion in deals, a gargantuan size in a market where several million from a single issuer used to impress. The volume of...

Rating agencies expand trustee evaluations into LatAm.
July 11, 2005... The three largest U.S. rating agencies are poised to bring trustee rankings into Latin America, furthering a regional push initiated in Mexico earlier this year. Fitch Ratings, Moody's Investors Service and Standard & Poor's are each at various...

Triumphant return for Hong Kong CMBS.(commercial mortgage backed securities)
July 11, 2005... After a five-year absence, Hong Kong's securitization market will shortly see its first CMBS offering since late 2000. Fortune Real Estate Investment Trust launched last Thursday the HK$2.385 billion ($306.8 million) deal via Triumph Assets Ltd...

Cagmas Islamic ABS increased.(Cagmas)(Asset backed securities)(Brief Article)
July 11, 2005... Cagmas, Malaysia's secondary mortgage agency, is putting the final touches to its eagerly awaited first Islamic RMBS (see ASR, 3/21/05), which is jointly arranged by Commerce International Merchant Bankers and HSBC Securities. The transaction...

Japanese insurance deal lined up.(Brief Article)
July 11, 2005... Japan's biggest life insurance company, Nippon Life Insurance Company, will soon launch a 100 billion ($891 million) deal backed by Kikin obligations - a form of subordinated debt unique to Japanese life insurers, which is issued mainly to...

Second Quarter 2005 Guarantor: Amid yield hunt, investors prefer sr/sub in 2Q05.
July 18, 2005... Not surprisingly, given the sheer volume of the sector, real estate ABS remained the dominant area of business for the guarantor industry in 2Q05 reaching nearly $20 billion of wrapped exposure. "Mortgage-related assets are the biggest asset...

Whispers.(Steven Abrahams promoted at Bear Stearns Companies Inc.)(operating income at Harley-Davidson Inc.)(Paul, Hastings, Janofsky & Walker L.L.P. appoints)
July 18, 2005... After covering rates and MBS strategy at Bear Stearns for the last four years, Steven Abrahams has moved to a position on the mortgage trading desk at the firm, where he will trade mortgage derivatives. In a note to readers of Bear's weekly...

EFG Eurobank prices first Greek revolving credit card ABS: Trend could spread through continental Europe...(Karta 2005-1)
July 18, 2005... EFG Eurobank last week priced its first revolving credit card deal from the Karta Master Trust structure, which through structural enhancements performs much like the U.K. styled credit card master trusts. Its the first credit card deal out of...

Russian auto ABS around the bend.(Bank Soyuz)(asset backed securities)
July 18, 2005... Russia's ABS sector is getting a jolt from an unlikely corner of the world: Greenwich, Connecticut. That's the base of boutique shop Greenwich Financial Services, which has teamed up with the brokerage arm of Moscow Narodny Bank, MNB Capital...

Rail deals safe from London attacks.(Metronet)
July 18, 2005... While London Underground trains have resumed an almost normal schedule after the July 7 terrorist attacks, by the end of last week there were still several routes that remained closed until further notice. These delays are expected to have...

Fitch joins credit card ABS servicer ratings fold.(asset backed securities)
July 18, 2005... Fitch Ratings last week released its inaugural crop of credit card ABS seller/servicer ratings, making it the third rating agency to use formalized assessments of credit card issuers' servicing capabilities. Fitch released ratings on First...

"ABCP Week" puts spotlight on looming deadline.(Asset-Backed Commercial Paper)
July 18, 2005... ABCP got its share of attention last week as Fitch Ratings, Goldman Sachs and Standard & Poor's all held ABCP conferences in New York in what was dubbed "CP Week" by some. The conferences highlighted a variety of issues affecting the sector,...

Timeshare sector gets a new tenant.(Silverlake Resorts)
July 18, 2005... First-time timeshare issuer Silverlake Resorts made its way into the ABS primary market last week with a $108 million private deal via UBS Securities, and it will likely become a regular issuer in the sector, sources said. Joe Conner, chief...

U.S. ABS primary revives with $13 billion.(asset backed securities)
July 18, 2005... The U.S. ABS primary market generated over $13 billion in new issues last week, ending what was beginning to look like a summer slump. After two consecutively declining sub-$10 billion weeks, the market saw a healthy dose of auto loan and...

SEC, Spitzer take interest in Bear CDO trades.(Securities and Exchange Commission)(Bear Stearns' collateralized debt obligations)(Eliot Spitzer)
July 18, 2005... Both the Securities & Exchange Commission and New York Attorney General Eliot Spitzer are investigating Bear Stearns' CDO trading practices with clients, the market learned last week. The SEC's Miami office is recommending enforcement...

S&P ranks ABS CDO manager performance.(Standard and Poors)(asset backed securities)(collateralized debt obligations)
July 18, 2005... While some CDO managers appear to be doing a better job than others, investors have yet to demand a higher yield for a history of lackluster or poor performance, according to Standard and Poor's. By borrowing performance metrics most familiar...

Merrill: Synthetic SF CDO volume to skyrocket in second half.(structured finance)(Collateralized debt obligations)
July 18, 2005... Synthetic structured finance CDO volume could reach $38 billion in total issuance in the second half of this year - a 483% increase over the $7 billion of issuance seen in this year's first half, according to Merrill Lynch. The investment bank...

Modest flows move up in coupon.(mortgages)
July 18, 2005... Mortgage activity last week was modest, two-ways and mostly up-in-coupon. Real money, including overseas and fast money, were primarily buyers of 5.5s. Meanwhile, 6s also saw good support from certain bank buyers. Originator selling fell back...

MBS supply change expected to continue.(mortgage backed securities)
July 18, 2005... Even with a flattened yield curve, half of all new mortgage originations are still being driven by refinancings rather than purchases. As a consequence, analysts expect the 15-year share of supply to dip and 30-year production to rise. Further...

Shelby bill dims GSE bill prospects.(government sponsored enterprises)
July 18, 2005... With a tougher Senate version of the GSE bill expected this month, the likelihood of legislation passing this year has dimmed considerably, said analysts. Andrew Parmentier, senior policy analyst at Friedman, Billings, Ramsey, said that to...

MBS market reacts positively to FASB decision.(mortgage backed securities)(Financial Accounting Standards Board)(Brief Article)
July 18, 2005... At its June 29, 2005 meeting, the Financial Accounting Standards Board decided that it would not provide additional guidance on the meaning of "other-than-temporary impairment," a decision welcomed by MBS market participants. As an...

Pricing continues ahead of summer lull.
July 18, 2005... The European securitization market kicked off the week in a relatively calm fashion following last week's attacks. Sources at The Royal Bank of Scotland said that they had neither seen a retreat or progression into ABS, adding that secondary...

Germany true-sale legislation expands.
July 18, 2005... Germany's true-sale legislation finally received its seal of approval last week, as legislators unexpectedly passed the new refinance register for German true sale ahead of the summer parliamentary break. The new law is expected to come into...

New Moody's methodology has upside for CVRD and Petrobras.(Companhia Vale do Rio Doce)
July 18, 2005... Moody's Investors Service placed a number of Latin American structured finance transaction on review for an upgrade following the agency's implementation of a new methodology for rating government-related issuers (GRIs). The approach has...

Asian activity down to a trickle from brisk pace.
July 18, 2005... With many bankers on summer vacation, activity from Asia has seemingly gone on holiday with them in recent weeks. Despite the lull, the region is still on course for its best year since the Korean consumer finance boom sparked a wave of...

Whispers.(Alex Gress joins Wachovia Securities)(Randolph Snook appointed as the vice president of The Bond Market Association)(CIT Group Inc. earnings report)
July 25, 2005... Alex Gress has joined Wachovia Securities in a newly created role responsible for working with leveraged finance and private equity sponsor coverage offering structured finance alternatives to traditional debt financings. In the new...

State SLABS issuers turn to floating-rate market.(student loan asset backed securities)
July 25, 2005... Not-for-profit state education finance companies are slowly but surely turning away from the auction rate bond market and migrating to the floating-rate ABS market for financing. Rating analysts attribute the shift to a troubled year in the...

HSBC CC program trips spread triggers.(credit card)(HSBC Holdings PLC)
July 25, 2005... HSBC's U.K card program, Affinity 001, saw its 4% excess spread trigger breached last week, causing further cash trapping, but analysts at Fitch Ratings said the breach was not a cause for concern. The transaction has seen negative trends...

China MBS buying to slow on revaluation.(mortgage backed securities)
July 25, 2005... With China unexpectedly announcing the revaluation of the yuan (RMB) last Thursday, MBS analysts expect the People's Bank of China to buy fewer U.S. dollar fixed-income assets, including mortgage-backed securities. The lower demand should not...

First time issuer AmeriFirst with home improvement deal.(AmeriFirst Home Improvement Co.)(Brief Article)
July 25, 2005... Optimus Corp., through its wholly owned subsidiary AmeriFirst Home Improvement Co., entered the term ABS market last week with an $81 million deal backed by subprime home improvement loans. The deal was led by investment bank Harris Nesbitt...

U.S. ABS primary soldiers forth with $14 billion week.(asset backed securities)
July 25, 2005... In the midst of the dog days of summer, the ABS primary market generated a solid $14 billion in new issue supply last week, a slight improvement over the previous week and another step out of the summer doldrums as the market attempts to get...

Lehman quantifies MH exposure in home equity ABS.(Lehman Brothers Holdings Inc.)(asset backed securities)(mobile home loans)
July 25, 2005... In the wake of the Moody's Investors Service announcement that it would increase overcollateralization levels for subordinated home equity and subprime MBS transactions containing a certain percentage of manufactured housing loans, Lehman...

Predatory lending suits raise specter of assignee liability.
July 25, 2005... Ameriquest Mortgage agreed last week to pay at least $7 million to settle predatory lending allegations in Connecticut, one of some two dozen states that are investigating the subprime lender's business practices. Whether the inquiries are a...

Fitch: Hedge funds shaping global credit market.(Fitch Ratings)
July 25, 2005... Hedge funds are growing increasingly prevalent across various market sectors, as the overall size and scope of the alternative investment vehicles require more capital to grow. But the tightened correlation hedge funds are causing among various...

Economic news roils MBS.(mortgage backed securities)
July 25, 2005... With Federal Reserve Chairman Alan Greenspan's Congressional testimony yielding nothing especially new, it appeared that last week would turn out to be a yawn. China, of course, changed that. The China headline news - regarding pegging its...

Lehman to launch agency hybrid ARM Index.(adjustable rate mortgages)(Lehman Brothers Holdings Inc.)
July 25, 2005... Lehman Brothers will be launching a stand-alone agency hybrid ARM Index - separate from the US Aggregate - next Monday, citing the remarkable hybrid ARM growth in recent years. "The hybrid ARM market has come a long way from being a small,...

Future GSE portfolio reduction still up in the air.(Government Sponsored Enterprise)
July 25, 2005... Last week Senate Banking Committee Chairman Richard Shelby, (R., Ala.), announced that his committee will meet this Thursday to mark up the GSE regulatory reform bill. Shelby did not specify what the legislation would require in terms of...

Piggybacks weigh on credit fundamentals.(piggyback loans)(loan to value)
July 25, 2005... With affordability mortgage products on the rise, one sector that has seen considerable growth is piggyback loans. The higher LTV associated with these loans implies greater credit risk, analysts said. Glenn Costello, a managing director at...