Asset Securitization Report articles from July 2007

Asset Securitization Report archives from July 2007

Whispers.(Churchill Pacific Asset Management)
July 2, 2007... Churchill Pacific Asset Management, the CDO asset management arm of Churchill Financial, announced the promotion of three senior executives. In addition to his current role as director of research, Stephen Ahearn has been promoted to...

Market Churns Out ABS Despite June Remittances: No monotony in pricing seen amid mixed levels for HEL, auto and credit card issuances.
July 2, 2007... Despite a spike in prepayment rates for resetting loans and dramatic increases in delinquencies, losses to the ABX were relatively contained early last week. Similarly, pricing activity for other securitization sectors was mildly affected. ...

State Farm In $4 Billion Cat Bond.
July 2, 2007... The catastrophe bond asset class is used to tossing around big ideas that manage risk from huge storms. A planned $4 billion transaction from State Farm Mutual Automobile Insurance Co., however, might be the largest transaction that the sector...

FASB Meeting Confirms Loan Mods.
July 2, 2007... At the recent Financial Accounting Standards Board (FASB) meeting on June 22, mortgage market participants - including bank regulatory agencies, investors, accountants, lawyers, the Securities and Exchange Commission (SEC) and the office of its...

Mixed Outlook After June Remits.
July 2, 2007... June remittance reports released Monday reflected a negative trajectory for ABX 06-2 and 07-1 indices that are backed by 2006 collateral - which was expected. Specifically, deals in 07-1 continued to underperform. The referenced transactions...

Bear Stearns' Debacle Saps Tapped-out CDO Market.
July 2, 2007... As if the Bear Stearns liquidation were not enough to ruffle the ABS CDO market, industry participants expect similar meltdowns to occur within the next few weeks. And as difficulties increase in placing portions of ABS CDO issues across the...

UBS Launches Second-Ever Municipal CDO.
July 2, 2007... CDOs are no longer a one-off phenomenon in the municipal market. While some doubt that CDOs will ever become common in the municipal market, dealers have been quietly tinkering with structures to see whether they can find one that works....

Subprime Jitters Still Weigh On MBS Market.
July 2, 2007... Subprime continued to weigh on the MBS market last week. Treasurys strengthened on "flight to quality" related to subprime as well as on weak housing news. On the subprime front, Bear Stearns stock was hit early in the week on fears that...

New U.K. Leader Raises Currency Questions: Gordon Brown, known for big changes, pushes vision for a uniquely English euro.
July 2, 2007... The United Kingdom - home to the CMBS and RMBS juggernaut as well as to London, Europe's financial capital - has a new leader. But the new prime minister, Gordon Brown, is not an average run-of-the-mill replacement for Tony Blair. Brown is a...

Fitch May Drop CDO Ratings With CES Risk.
July 2, 2007... Adding to the investor concern over a bearish ABS CDO market, Derivative Fitch recently announced that it may cut the ratings on classes from three 2003 diversified structured finance CDOs and one high-grade CDO issued last year that have...

Deutsche Hires Five in Global Prime Finance.
July 2, 2007... Deutsche Bank Securities announced the hiring of five senior bankers Thursday. All will be based within the global prime finance field in New York. Anthony Demonte joins as a director in securities lending and will report to co-heads Paul...

Vector Takes On ABCP Default Risk.(asset-backed commercial paper )
July 2, 2007... The world has changed. Traditional approaches used to set the level of program wide credit enhancement (PWCE) for ABCP programs fall short of quantifying the true default risk associated with such portfolios. These approaches such as the fixed...

Eurostat Reveals Updated Stance On Government-Tied ABS.
July 2, 2007... After several rounds of revisions, Eurostat revealed its final rules on the treatment of European Union members' state-related securitizations last week. The EU's statistical body now views all securitizations as borrowing on the part of...

Blowing Off Subprime, Again.
July 2, 2007... Three months ago, when the concern that subprime losses would spill over into other markets was making headlines, I examined the issue through the lens of the emerging world. I saw sporadic puffs of smoke, but no fire. EM ABS was unruffled. ...

Franchise Finance Feeds Whole-Business Securitization.
July 2, 2007... The whole-business securitization sector makes a relatively minor impact on the capital markets, in terms of volume. Just a handful of the deals come to market each year. Yet the asset class has given the capital markets a lot to talk about...

Whispers.
July 9, 2007... Wachovia Securities hired Glen McDermott as a managing director and head of structured credit product distribution for Asia-Pacific. McDermott will work to increase multiple distribution channels as well sales of SCP products into Asia-Pacific,...

New RAAC Series Launches Week's Sole ABS: For the time being, market postpones dealing with hedge fund closures, redemption halts.
July 9, 2007... An order to temporarily suspend redemptions in United Capital Asset Management's group of Horizon hedge funds and the closure of a separate hedge fund managed by Denver-based Braddock Financial, might have been reason enough to shock and subdue...

JPMorgan Snatches Lead in 1H07.
July 9, 2007... In a drastic re-ordering of top ABS bookrunners, JPMorgan Securities became the top-ranked manager for public ABS deals in the first half of 2007, according to a preliminary tally of deals by the ASR Scorecard database. JPMorgan completed...

Merrill Retains Top Manager Title Despite Declining CDO ConditionsIssuance in the U.S. CDO market remained strong through the second quarter of 2007, despite the sour taste in investors' mouths from the ABS vehicles' subprime exposure.
July 9, 2007... Indeed, U.S. CDO issuance was up, totaling $188.3 billion through the first half of 2007, a small but not insignificant rise from $147.3 billion for the same period in 2006, according to Thomson Financial data. Merrill Lynch remained...

Exchanges Launch CDS Products.
July 9, 2007... Three U.S. options and futures exchanges have launched listed products aiming to grab shares of the burgeoning credit-derivatives market, although the new products are facing short-term hurdles and may encounter long-term ones as well. The...

Lehman Takes RMBS Crown.
July 9, 2007... The U.S. RMBS manager league tables played out like a game of musical chairs in the first half of 2007. Lehman Brothers took the lead with a 10.7% share of the market, up from its position at number three in the first half of 2006, according to...

Deutsche Releases 2-yr. Outlook.
July 9, 2007... With the mortgage market currently suffering from headline risk, Street analysts are saying that housing is overvalued. Deutsche Bank recently issued an in-depth report on the outlook for U.S. home prices over the coming two years. The...

Euro Cat Bonds: Banking on Disaster.
July 9, 2007... The catastrophe market is surging, but not without growing pains. In times of peril, people often react with "either/or" responses. When a storm is about to hit a house, occupants of the home will posit such questions as, "Do I leave now, or do...

Bon Vivant' Covered Bonds Emerge in France.
July 9, 2007... France has extended its share of the European covered bond market to 17% in 2007 (year to date) from 11% in 2006. Boosting volume is Credit Mutuel, which entered the field by launching a 15 billion ($20.15 billion) issuance program to...

Brazilian Precatorios Present Kaledeidoscope of Risk.
July 9, 2007... The Brazilian asset class known as precatorios made its debut earlier this year in a receivable investment fund (FIDC) called Polo, which included a foreign investor among the buyers, according to an issuance document. Whether overseas...

A Less-Levered CLO Targets Insurance Companies.
July 9, 2007... A novel CDO structure recently put together by GSC Group, targeted toward insurance companies, pension funds and other investors that might well be interested in the European leveraged marketplace - yet hesitant, perhaps, to go whole hog all at...

Whispers.
July 16, 2007... Societe Generale recruited Jason Kwan as a director in its mortgage-backed securities area, where he reports to Arnaud Denis, managing director of that group. Kwan joined the French bank from Countrywide Securities. Reggie de Villiers, an...

Subprime Downgrades Sideline ABS Issuance.
July 16, 2007... The asset securitization market usually does not stop issuing new deals for any reason, except perhaps the usual holiday breaks. After enduring several days of downgrades on subprime MBS by Moody's Investors Service, and warnings of more from...

Investor Outcries Raise Questions.
July 16, 2007... One can hardly escape the home-buying process without passing several important milestones. During the closing of our own house purchase several years ago, the attorney said he was very concerned about the steady stream of "strange" mortgages...

Legislation Overshadows Sallie's First Deal in Months.
July 16, 2007... SLM Corp.'s planned $2.5 billion securitization of FFELP loan receivables made news for a couple of reasons. The student-loan ABS issuer broke its four-month abstention from the ABS market, just as the House of Representatives passed...

RMBS Downgrades Feed Subprime Market Frenzy.
July 16, 2007... Standard & Poor's placed about $7.3 billion worth of subprime bonds on CreditWatch with negative implications last Tuesday, a dose of consolation to a market that originally thought the rating agency would downgrade $12 billion of bonds. ...

Big Week for Small-balance Commercial ABS.
July 16, 2007... Small-balance commercial loans generally have a minor impact on overall securitization production, but the sector came out with a couple of significant developments last week. Not only did Lehman Brothers market a $500 million transaction; a...

Hedge Fund Quake May Be Isolated.
July 16, 2007... The recent troubles of the Bear Stearns Asset Management Funds, the halt on redemptions at United Capital Asset Management and the shutdown of a hedge fund at Braddock Financial might only be the first of many market rumbles to clock in on the...

Subprime Derails MBS Market Once Again.
July 16, 2007... Subprime caught the markets' attention again last week, leading to a flight to quality that moved the 10-year Treasury yield back to 5.04% at Tuesday's close. This happened after it hit 5.195% when the June employment report was released on...

Fannie Mae, Freddie Mac Could Be Subprime Powers.
July 16, 2007... Fannie Mae and Freddie Mac could become key players in the subprime mortgage market as a number of private lenders flee the sector or tighten up their lending requirements. The sector has experienced one calamity after another this year,...

June Speeds Slightly Slower Than Expected for FNMAs.(Federal National Mortgage Association compared with GNMA Mortgage-Backed Securities Trust Inc)(Brief article)
July 16, 2007... Speeds on 30-year FNMAs slowed about 5% to 10% in June compared with previous expectations that speeds would remain the same in the lower coupons or decrease by up to 5% in 6.5s. The largest percentage of slowing was recorded in 6s and higher....

RMBS Firms Hail FSA Crack Down.
July 16, 2007... The Financial Services Authority (FSA), the U.K. nongovernment finance regulator, recently concluded that several subprime mortgage lenders and intermediaries use weak and irresponsible lending practices, and it questioned the ability of...

Markit Launches First Integrated Euro ABS Service.
July 16, 2007... Independent data provider Markit has successfully implemented the first integrated pricing and performance monitoring service for the European ABS market, covering CMBS, RMBS and CDO transactions. The service offers financial institutions the...

2nd Quarter 2007 New Issues Guide: Autos shine, as other asset classes experience volume drop.
July 23, 2007... Despite contraction in the major asset classes, industry totals were still higher compared to last quarter. In 2Q07, volumes reached $196.07 billion, rising from $183.01 billion in 1Q07, according to the ASR Scorecard database. Real estate...

Whispers.
July 23, 2007... UBS Global Asset Mana-gement recruited Liz Ward to shore up its fixed-income team. Ward will be based in London and will manage the global team of fixed-income capabilities managers. In this capacity, Ward forms the key link between UBS...

RMBS Takes Backseat To Cards and Autos.
July 23, 2007... Pricing guidance on auto and credit card transactions became more snug last week, as a pronounced liquidity dearth all but forced the RMBS-driven securitization market into a hiatus. For the past couples of weeks, all three rating agencies...

Opportunity Knocks: For current and future Mexican servicers.
July 23, 2007... More ABS in Mexico means higher demand for better servicing - that's the message that some market players are putting out there. There are certainly servicers striving to meet the challenge, particularly in the mortgage space, which is where...

IHOP in Buyout Play for Applebee's.
July 23, 2007... Hoping to duplicate its successful transformation into a major franchise brand, IHOP Corp. is using familiar securitization techniques to finance its $2.1 billion buyout and subsequent revamping of Applebee's International. IHOP announced...

Alt-A Next Target for Downgrades.
July 23, 2007... Troubles in subprime have begun to creep up the credit spectrum. As expected, after the bloodbath of recent subprime downgrades, the Alt-A RMBS sector took a hit last week. Moody's Investors Service placed 66 tranches from 33 Alt-A RMBS...

Roundtable: ABS Pros Talk elevated risk in structured deals.
July 23, 2007... Structured finance products show no signs of becoming simpler, so learning how to define these instruments is equally as important as understanding how to get the best value out of them. The following roundtable discussion focused on the...

Cracks in Monoline Triple-A Standards?
July 23, 2007... Bond insurers have built a business on paying close attention to risk. For the most part, these monolines have earned their esteem by establishing triple-A portfolios. However, recent drops in the ABX index and the widening of CDO spreads, as...

ABX.07-2 Index Has Muted Debut.
July 23, 2007... The ABX.07-2 index began trading last Thursday, but after a fresh spate of bad news about the subprime mortgage market forced the market into a general slowdown, and with a typical summer Friday looming, the index was not expected to see much...

Bear Comes Clean, What's Next?
July 23, 2007... After Bear Stearns sent a letter to investors regarding the essential collapse of two of its hedge funds, stating that "there is effectively no value left for the investors in the Enhanced Leverage Fund and very little value left for the...

Rating Actions Rise For RMBS.
July 23, 2007... Last week continued the plethora of rating movements - both positive and negative - for the RMBS and CDO sectors. The different rating agencies not only made several rating changes but altered their rating methodologies as well. For its...

Mortgage Market Remains Caught Up in Subprime.
July 23, 2007... Subprime continues to hover over MBS, keeping volume below normal. Two weeks ago, it was the rating agencies placing several billion dollars of subprime RMBS on CreditWatch negative. Last week started out with another flight to quality in...

Dubai Completes First True Sale CMBS: Demand for the product is well on its way.
July 23, 2007... As construction of high-rise commercial properties in Dubai continues to boom, the United Arab Emirates has now been formally introduced to true-sale CMBS, courtesy of HSBC Bank Middle East. And just as tenants are filing into office space as...

Europe Revisits Insurance Solvency.
July 23, 2007... The European Commission is in the process of redefining insurance solvency regulations. The latest draft of this new framework shows a friendly approach to the use of capital market tools. For insurance players, who increasingly look toward...

Euro RMBS: What's the Alternative?
July 23, 2007... The term subprime has become squarely placed in the "ad nauseam" sphere of usage - with sources at European investment banks becoming sick of hearing about (and talking about) the stateside debacle. As a result, firms are beginning to...

In the Subprime Uproar, European Spreads Finally Find Their Place.
July 23, 2007... The hullabaloo created by the recent aggressive U.S. RMBS downgrades has led to some much-needed price repositioning in European trades. Market players say that the credit news is likely to continue to chip away at the tight pricing, which has...

Whispers.
July 30, 2007... Mizuho Securities said it is done hiring people on the structuring side and will begin to bulk up its sales team. The firm said it might make additions in structured credit products sales, which includes CLOs and SIVs. The hires will be based...

Shell-Shocked Investors Suppress ABS Issuance: Meloncholy touches reliable auto, credit card deals.
July 30, 2007... Bad news from the housing and subprime MBS industries suppressed securitization productivity last week - and not just for mortgage-related fixed-income products. After Countrywide Financial told investors that continued weakness in the...

CDO Managers Slip into Spectator Positions.
July 30, 2007... The dislocation in the CDO market right now has posed a number of challenges for CDO managers trying to balance higher returns with palatable risk characteristics. However, there is slow to almost nonexistent activity in ABS CDO new issuance,...

Nomura Analysts Exit Firm.
July 30, 2007... Nomura Securities, for practical purposes, closed its fixed-income research department when it dismissed its six-member team over the course of several weeks, culminating in the departures of three major securitization researchers last week....

GMAC Launches Successor to MINT.
July 30, 2007... The subprime mortgage market is in a tailspin - even the Alt-A and prime markets are showing signs of strain. However, GMAC Mortgage is moving ahead with plans to finance a variety of mortgage loans. The company is sponsoring another loan...

Subprime Mess Finds Its Way Down Under: Trio of Australian hedge funds incur losses.
July 30, 2007... Late payments by less credit-worthy consumers have hurt U.S. hedge funds, notably funds run by Bear Stearns, but losses recently announced by three Australian hedge funds have fanned concerns that the credit problems on Main Street are...

EM Assets and ABCP Conduits Get Cozy: But Some See Strange Bedfellows.
July 30, 2007... The global ABCP market has been gobbling up more product than ever from the CIS and Turkish emerging markets. Only two conduits, Panterra Funding and Orchid Funding Corp., have a tight focus on this world, but plenty of other international...

Second Liens Altered in Slow Market.
July 30, 2007... As investors anxiously waited last week for Standard & Poor's conference call about rating methodology alterations to closed-end second-lien RMBS, Starship's 1987 hit "Nothing's Gonna Stop Us Now" played over the conference call lines. The...

ABX Remittance Reports Worsen.
July 30, 2007... The July remittance data brought more bad news to an already down and out market, including the deterioration of credit performance for all indices at a faster pace than the previous two months, according to a report from Lehman Brothers. ...

Credit Jitters Result in More Fight-To-Quality.(liquidity crisis in debt market)
July 30, 2007... Investors continued to lose their appetite for risk last week. While losses have been confined mostly to subprime, investor caution became very evident in the high-yield corporate sector as DaimlerChrysler was forced to postpone its $12 billion...

Credit Suisse Proposes Plans for New U.K. Retail Fund.
July 30, 2007... The recently assigned multimanager team at global investment group Credit Suisse plans to launch a Multi Asset Distribution Fund aimed at producing more competitive yields. This move follows a strategic review of all the Credit Suisse...

Corridor-Cap Floaters: An excerpt from Mortgage Backed Securities - Products Structuring and Analytical Technologies.(Excerpt)
July 30, 2007... The relative size of the front-end senior non-NAS cash flows makes their execution highly important to the execution of the entire deal. One structuring variation used in all MBS sectors (both agency and private-label) is to split cash flows...

Rate Impact on Home Prices Seen.
July 30, 2007... With housing market weakness, analysts are starting to examine how rising interest rates could further weaken the borrowers' ability to afford their homes. In their weekly report, Countrywide Securities analysts noted that the increase in...

Housing Slump Trades Advised.
July 30, 2007... The weakness in the housing sector has the impact of reducing cash-out refinancings resulting from low or negative home price appreciation as well as increasing extension risk. With these risks, Street analysts have been recommending trades...

New Law Boosts U.K. Covered Bond Volumes: Covered bonds and SIVs are gaining considerable ground.
July 30, 2007... The new U.K. prime minister, Gordon Brown, said recently that the government will begin to draft new legislation to help regulate and promote covered bonds. Inevitably, the new regulations will boost covered bond issuance, sources say. ...

Participants Make Cloudy Forecast for U.K. Deals.(Residential Mortgage-Backed Security )
July 30, 2007... Investment banks in the U.K. have started to backtrack on earlier statements that U.K. ABS would remain bullish well into August. The forecast looks cloudy, with pricing spreads inching wider on the back of continued negativity resulting from...

CLO Spreads Widen as Market Fear Intensifies.
July 30, 2007... With heightened risk aversion sending spreads in the CDO market to gaping widths, the CLO market has seemed to remain intact. However, spillover from the subprime turmoil and hedge funds' recent attempts to divest their loan positions will push...

Susquehanna Trashes Auto Lease Deal.(Brief article)
July 30, 2007... Susquehanna Bancshares in Lititz, Pa., has scrapped its plan to do a second auto lease securitization this year, but it will be back in the market again next year. The company, which issued a $268 million deal in February, had been...