Asset Securitization Report articles from June 2003

Asset Securitization Report archives from June 2003

Whispers.(financial news)
June 2, 2003... Westwood Capital, an investment bank specializing in structured finance, securitization and merger advisory work, hired Vinay K. Jindal to join the New York-based office as an associate. Vindal will assist the firm primarily in areas of...

Time to move down in credit?(Wall Street recommends ABS investors look to headline names for yield)
June 2, 2003... With spreads for top-tier ABS issuers offering little value, for the first time in a while the Street is noticeably recommending that investors look to headline names for yield and potential spread tightening. In particular, AmeriCredit Corp.,...

Halftime over for soccer ABS.(Moody's Investors Service downgrades E95 million class A notes of Fiordillate insurance-wrapped Italian football securitization)
June 2, 2003... Moody's Investors Service downgraded the E95 million class A notes of the Fiordillate insurance-wrapped Italian football securitization (see ASR 5/13/2002). The downgrade is a yellow card for the deal, but more significantly, it means that...

NCFE suit targets almost everyone.(National Century Financial Enterprises)
June 2, 2003... Marked by a massive lawsuit against the securitization facilitators of National Century Financial Enterprises, this next wave of NCFE litigation - call it the securities fraud wave - has begun, involving, for perhaps the first time, ABS bank...

BofA launches FIN friendly conduit.
June 2, 2003... Bank of America last week launched Yorktown Funding, a multi-seller ABCP conduit structured to address consolidation criteria set by the Financial Accounting Standards Board in its Financial Interpretation No. 46 (FIN 46). This is believed to...

Bellwether Bowie deal on watch for downgrade, always a hype.(IP bonds )
June 2, 2003... Intellectual property ABS, though often talked up, has never really lived up to the hype, especially as investors became hesitant to venture into the esoteric in recent years. And now the infamous "Bowie Bonds" that got the ball rolling in 1997...

Correction:.(Correction Notice)
June 2, 2003... In last week's ASR, the last name of new Merrill Lynch research strategist Sharon McGarvey was misspelled as McGarver.

Holiday shortened ABS primary slows ahead of Barcelona.
June 2, 2003... New-issue supply slowed in last week's holiday-shortened session that preceded the global ABS conference held this week in Barcelona. U.S. primary market priced just $4.8 billion, as of press time, with an additional $4.9 billion of supply...

In CDOs, secondary market is belle of the ball lately.
June 2, 2003... New issues in the domestic CDO marketplace have declined sharply in recent weeks, prompting speculation that more than just downgrades are clouding the sector's vigor and clogging up the pipeline. While April saw a total of $6.38 billion in...

Down-in-coupon becomes primary investor focus.
June 2, 2003... Over the Wednesday-to-Wednesday period, mortgage spreads were slightly weaker as investors moved to the sidelines on the high price levels and focused more on the long holiday weekend. The week saw 30-year Fannie Mae 5s moving out three basis...

Structured IO issuance to rise significantly.
June 2, 2003... With the significant jump in IO production in the CMO market, investors should be prepared as supply is expected to exceed $15 billion in 5.5% IO equivalents, said a recent report by Lehman Brothers. Other analysts also talked about the...

Curtains to close on Lend Lease.(Brief Article)
June 2, 2003... After undergoing months of a comprehensive review of its real estate investments branch, Australia-based Lend Lease Corp. has made a definitive decision to exit the U.S.-based business, rendering U.S.-based Lend Lease Real Estate Investments...

Will banks support MBS in the near-term?
June 2, 2003... With the recent bull flattener trade, investors have become more concerned about reduced bank demand for mortgages because lower yields and the flatter curve will put pressure on net interest margins. However, despite these concerns, market...

Basel II/Part II: Internal ratings based approach.
June 2, 2003... What follows is the second installment of a two-part series on the potential impact of the new Basel on the structured finance market. See ASR 5/26 for Part I. Basel's third consultative paper has been circulating since the end of April,...

Box Clever highlights servicing problems.
June 2, 2003... Amid scores of controversy in other related areas of WestLB, the triple-B rated notes of Home Technology Receivables (No.1) were placed on review for possible downgrade on May 21 by Moody's Investors Service. This followed a spate of bad news...

Orb finds buyer to settle fraud dispute.
June 2, 2003... Orb Group negotiations to sell off the U.K. hotels backing its HOTELoC deal are underway. A spokesman at Morgan Stanley confirmed that the deal should reach due diligence by next week at the earliest. Moody's Investors Services placed the...

Whispers.(briefs)
June 9, 2003... Nomura Securities recently poached a pair of bankers from ING Barings to bolster its asset-backed effort. Continuing the mass defections among ING's ABS pros, Andy Yuder and Paul Richardson were hired as directors in Nomura'a ABS origination...

Surf & Sand: Barcelona a haven for business and pleasure.(Information Management Network's Global ABS conference)
June 9, 2003... By noon, when the conference attendees had just managed to shake the weight of a prior night of revelry, another promising night of parties takes hold. Stalls are set up to soften the wait, for the sophisticated palate a spot of champagne and,...

Short of 10,000, Refi Index soars.(mortgages)
June 9, 2003... Mortgage applications surged on a seasonally adjusted basis for the week ending May 30, according to the Mortgage Bankers Association (MBA). The Purchase Index jumped 16% to 461 and the Refi Index gained 13% to 9978 - both new record highs. The...

Korea ABS market in turmoil.
June 9, 2003... A total of nine cross-border transactions emerged from Korea in 2002, with a total issuance size of US$2.9 billion, according to Standard & Poor's. S&P has rated a total of US$3.6 billion Korean card securitizations, the majority of which have...

Moody's sees monolines facing "first true test".(financial guarantor industry)
June 9, 2003... While financial guarantors have navigated the rough waters of the current economic downturn reasonably well, questions persist over exposure to troubled sectors of the ABS market as well as increased competition that may lead to decreased...

True Sale - A new German frontier.(trade tax initiative)
June 9, 2003... With the new German trade tax initiative promptly on its way, the Germans were finally able to discuss trends and developments outside of synthetics at their session this year. Last year there were only hints that true sale would some day...

Running with the bulls in Spain.(Global ABS conference)
June 9, 2003... BARCELONA - Though clearly the Global ABS conference in Barcelona was primarily focused on the European markets, a few panels were addressing the state of U.S. ABS - which, from a volume perspective at the very least, is far exceeding...

Conference briefs.(Brief Article)
June 9, 2003... While the first-day sessions at ABS conferences generally take place during the initial meet-and-greet and registration, some of the workshop seminars in Barcelona scored 100-plus in audience attendance. In fact, the mid-day CDO analytics...

ABS primary rebounds to price $12 billion.
June 9, 2003... Primary ABS issuance picked up last week, with over $12.6 billion marketed as many in the market gathered in Barcelona for the global ABS conference being held there (see story p5). A pair of captive auto deals totaling $4.2 billion...

"Yes!" - and it counts - Chase receives approval to amend CHAMT.(Chase Manhattan Bank N.A. to amend credit card master trust)
June 9, 2003... Chase Manhattan Bank N.A. announced last week that it had received majority bondholder approval to amend its credit card master trust. This allows the sharing of excess spread, therefore limiting the early payout risk for three high-coupon,...

New swap hedge seen emerging in CDOs.(Collateralized debt obligations)
June 9, 2003... With correlation being the risk of the moment in credit derivative markets, UBS Warburg CDO researcher Douglas Lucas takes the argument one step further and theorizes that the result of the heightened correlation risk will be an increase in a...

Despite falling recoveries, leveraged loan CDOs still strong.(Collateralized debt obligations)
June 9, 2003... While leveraged loans have proven more stable and less risky CDO collateral than high yield bonds, some might be questioning their presence in structured vehicles, as ultimate recovery rates on bank loans are declining. Actually, bank loan...

ASF hosts discussion on trustee role.(Brief Article)
June 9, 2003... The American Securitization Forum is hosting a discussion this week on the role of the trustee in ABS transactions. The meeting is scheduled for Wednesday evening at its New York headquarters. The next in the Sunset Seminar series of...

Fitch approaches floating-rate deals with caution.
June 9, 2003... There has been a rapid deterioration of rents and occupancy in commercial real estate over the past two years. This is why Fitch Ratings has taken a cautious approach in rating CMBS transactions that contain properties that are transitional in...

CMBS is the first half's Big Man On Campus.
June 9, 2003... The CMBS market is holding onto impressive spread levels from top to bottom. With new-issue triple-A 10-year paper around 32 basis points over swaps, and triple-Bs at 105 basis points over swaps, the market is wondering how long these levels...

Alt-As still have that prepay advantage.
June 9, 2003... MBS backed by Alt-A mortgages can offer an attractive alternative to regular conforming or jumbo mortgages, said a recent report by Nomura Securities International. It is a situation "where credit risk and prepayment risk combine in a...

Fixed-rate supply in 30s plummets.(Brief Article)
June 9, 2003... The 30-year fixed rate agency MBS market is expected to dip significantly in May. Analysts at JPMorgan Securities believe that the amount of outstanding 30-year agency MBS should decrease by well over $30 billion, based on gross production up...

European credit card indexes unveiled.
June 9, 2003... Both Standard & Poors and Fitch have recently unveiled corresponding credit card indexes to monitor what has so far been the steady performance of European credit card securitizations. "With last week's release of European credit card...

Japanese securitizations secure despite earthquake.(Brief Article)
June 9, 2003... Moody's Investors Service said last week that the earthquake that struck northern Japan on May 26, while registering a 7.0 on the Richter scale, had limited impact on Japanese securitizations. The epicenter of the quake was offshore of the...

Banker hops to IFC from ING.(Surat Maheshwari appointed at International Finance Corp.)(Brief Article)
June 9, 2003... Surat Maheshwari has hopped over to the International Finance Corporation (IFC) in Washington D.C. from ING in New York, according to a source at the IFC. He is assuming the post of principal financial officer in the structured finance group,...

Mexican toll-road deal opens door for more full wraps.
June 9, 2003... The first Mexican peso deal guaranteed by a monoline priced May 30 and the results augur well for more full wraps. "It is encouraging," said Diana Adams, managing director of emerging markets at Ambac. Amounting to Ps1.94 billion (US$183...

Latin Cross-border: Inclement front passes over Caribbean.
June 9, 2003... While Brazil's stellar recovery in global debt markets and Mexico's domestic-darling status has re-centered attention on the big boys of the region, a pair of credits from small Caribbean countries are in a bit of trouble. Last week, Moody's...

Chile's Santander back with public works deal.(Brief Article)
June 9, 2003... Chile's Banco Santander is back with a domestic bond packing government risk. Sized at 1.27 million inflation-indexed units (UF) (US$30 million), the transaction will be backed by future payments to a road concessionaire from the Ministry of...

Whispers.(meshed briefs)
June 16, 2003... ABS salesman Mark Opila has jumped to Barclays Capital from DresdneKleinwortWasserstein, where he had worked since March 2001. Opila will report to Andrew Rankowitz, Director - Head of U.S. Credit Sales. Prior to his stint at Dresdner, he had...

Amendment to 140 the MOAB?
June 16, 2003... Though not entirely unexpected - given the slant that the Financial Accounting Standards Board has already indicated this year - FASB dropped a bomb on the industry last Tuesday when it released its proposed amendment to FAS 140. This...

UBS/BBVA ready Mexico MBS.
June 16, 2003... Over the last several months, housing finance in Mexico has ceded the spotlight to other securitization sectors like sub-nationals and toll roads. But it is creeping out of the shadows, as the nuts and bolts are nearly in place for an MBS...

Phase II: What's next for Italy.(Industry Overview)
June 16, 2003... Between 1999 and 2003 the growth in the Italian market reached unprecedented levels, and it emerged as one of the strongest markets in Europe. But the growth in the market has been largely dominated by state-related asset securitizations, lease...

Fed's new numbers show ABCP up $13.8 billion in May.(Brief Article)
June 16, 2003... The Federal Reserve has revised its historical ABCP volume numbers dating back to May 2000 to adjust for previously unaccounted programs that caused a nearly $30 billion spike when added in late April - a jump that initially baffled industry...

Remember FAS 140? Remember QSPEs?
June 16, 2003... If the final release is anything like the Exposure Draft, the amendment to FAS 140 could make the struggles of FIN 46 a fond memory The Financial Accounting Standards Board has issued its Exposure Draft, Qualifying Special-Purpose Entities...

MMCA auto ABS ratings cut: AAA' classes nicked to A+'.(Brief Article)
June 16, 2003... Standard & Poor's downgraded 14 classes of auto lease ABS issued by Mitsubishi Motor Credit of America last week, due to greater-than-expected defaults of the captive lender's zero-down, zero-interest and zero-payments for 15 months subvention...

LordSPV establishes unit in Jersey.(Brief Article)
June 16, 2003... Lord Securities Corp. (LordSPV) and Jersey-based law firm Bailhache Labesse have recently formed a partnership enabling the two to offer multi-jurisdictional SPV administration, under the LordSPV banner. For Lord, the relationship allows it...

DVI ABS widens on auditor resignation.
June 16, 2003... Spreads for DVI Inc. medical equipment lease ABS have widened significantly since accounting firm Deloitte & Touche announced it was stepping down as its independent auditor, which triggered ratings actions from all three rating agencies on the...

Cards lead $14 billion ABS primary week.(Industry Overview)
June 16, 2003... Primary ABS issuance remained strong last week, with $14 billion in supply making the rounds, $11 billion of which had priced as of press time. For the first time in a long time, credit card supply dominated the calendar last week, with high...

ABS CDOs look to snag top billing as summer blockbusters.
June 16, 2003... As the mid-year point rapidly approaches, CDO professionals are not looking forward to the relaxed pace of a summertime market. After all, new issuance slowed early on this year. Market mavens are doing all they can to keep investors from...

Trustee role seen as "minimal" at ASF gathering.
June 16, 2003... Trustees in ABS and MBS have adopted a "don't ask, don't tell" policy in regard to their actions and responsibilities. That was the message put forth at the American Securitization Forum Sunset Seminar held last week discussing the "role of...

MBS in 2003 or How I learned to love the premium bond (with apologies to Dr. Strangelove)'.
June 16, 2003... By Andrew Davidson, president of the Andrew Davidson & Co., Inc. The continuing unrelenting rally has turned all mortgage investors into premium investors. In an upward sloping yield curve environment, premiums have risk and return...

Freddie's woes leave MBS players unperturbed.
June 16, 2003... Though Freddie Mac was embroiled in continuing controversy last week - involving firings of top officials and investigations by the Securities & Exchange Commission and the House Financial Services Committee - MBS players remained unfazed. ...

Sharp tightening in 30-Year 5.5s on roll-related activity.(Industry Overview)
June 16, 2003... At current market levels, mortgages have hit what Deutsche Bank Securities analysts call an "inflection." In other words, further rallies will hurt MBS. At this point, analysts are mostly neutral on the mortgage sector with preference holding...

Freddie's new disclosures welcomed by MBS market.
June 16, 2003... Freddie Mac was the talk of the town last week: not only from the management shake-up but also from the new disclosures that became available on June 5. The GSE provided additional information on original LTV, FICO, loan purpose, occupancy...

Bush's economic stimuli expected to spur real estate.
June 16, 2003... New York - With the employment picture expected to improve as a result of the implementation of the President's economic stimulus program, there are brighter prospects for the real estate markets going forward, according to participants at last...

No summer slowdown in sight for the Europe ABS market.(Industry Overview)
June 16, 2003... The European securitization industry was back in full swing last week after a brief pause for the early June gathering in Barcelona. New issues were the order of the week with over $1.4 billion equivalent of new deals added to the pipeline. ...

French conduits to become more accommodating.
June 16, 2003... The French conduit market is slowly inching its way to incorporating a proposed overhaul of the 10% holding limit imposed on French institutional investor holdings of short-term instruments issued outside of France. This is well within the...

Pipeline picks up in Korea.
June 16, 2003... Market participants say that there are several cross-border Korean deals in the works, which include credit cards and residential mortgage-backed transactions. "Market activity is picking up," comments Stephen Roith, partner in the...

Any potential? Looking at the possibilities in Hong Kong.
June 16, 2003... Despite the negative sentiment surrounding the Korean consumer credit sector, there are still market participants that are more bullish on a Korean securitization revival than they are on the possibilities of an emergence of an active...

Latin America Cross-border: More Brazil, shaky Peru.(Brief Article)
June 16, 2003... On Latin America's cross-border front, Brazilian issuer Unibanco was expected to close a securitization of diversified payment rights (DPR) last week, sources said. Handled by Dresdner Kleinwort Wasserstein, the deal may be as large as US$200...

LOC-backed CP programs close in Latin America.(Brief Article)
June 16, 2003... In the past several weeks, two Latin American issuers have hit the market with letter of credit-backed CP programs. Banco Continental de Panama floated a US$140 million program in a single issue during early June. Structured by...

Whispers.(meshed briefs)
June 23, 2003... Peter Hoffman started last week as a director in ABS origination at Merrill Lynch, reporting to group head Ted Breck. Hoffman joins from Fleet Securities. His responsibilities will be developing asset based finance and securitizations in the...

ARG bankruptcy fleet ABS likely winding down.
June 23, 2003... Following last week's news that ANC Rental opened the bidding for its operations, one of the more innovative securitizations ever will likely enter early amortization. But with a strong need for financing in order to maintain the rental...

Brazil market to shed lazy rep.(Industry Overview)
June 23, 2003... In Brazil, the domestic securitization industry has always been a poor sister to the cross-border, a sad case of unmet potential. A regulatory straightjacket on specialized structurers, hefty taxes and little standardization in key assets have...

Week two of FASB's 140 ED: Market digesting uncertainty in Market Trusts.(Industry Overview)
June 23, 2003... During the second week since the Financial Accounting Standards Board released its Exposure Draft on amendments to FAS 140, the chatter has shifted from ABCP/CDOs to the impact the new rules may have on the broader term market - namely credit...

Amid strong performance, RRB supply seen ahead.(Industry Overview)
June 23, 2003... Stranded cost ABS is expected to pick up in the near term, according to Lehman Brothers, with the bulk of supply coming from New Jersey and Texas - the most favorable states from which to buy RRB ABS. Depending on the legal challenges Lehman...

MH plague to continue.(Brief Article)
June 23, 2003... With both the Conseco Finance and Oakwood Homes situations seemingly resolved, and spreads having stabilized in recent months, Banc of America Securities researchers took a closer look at Oakwood MH transactions and found additional losses and...

After lull, ABS primary in quarter-end rush: V.W., G.E. lead supply.(Industry Overview)
June 23, 2003... The ABS primary priced $9.2 billion last week, in a slow to develop market that was overshadowed by bid lists and secondary activity early in the week. But by Wednesday, with the quarter-end rapidly approaching, new issues flooded into the...

CDOs hit top of the upgrades chart, tobacco leads downgrades.
June 23, 2003... Tallying the upgrades and downgrades for asset-backed vehicles each quarter always yields a mixed bag of emotions. In the CDO sector, however, 1Q 2003 will shine particularly bright - collateralized debt obligations racked up the only upgrades...

Bally to extend receivables program two years.(Bally Total Fitness)(Brief Article)
June 23, 2003... Bally Total Fitness disclosed in an 8-K with the Securities and Exchange Commission last week that is in the process of renewing a $155 million receivables facility, currently funded on a revolving basis and held in an asset-backed commercial...

ABS CDOs Reach Full Girth: Is Mullberry King?
June 23, 2003... What's an extra half a mill amongst friends? Investors who bought into the Clinton Group's most recent CDO, Mulberry Street II, nearly unseated a PIMCO-backed deal as the largest ABS CDO reportedly to come to market. Weighing in at $700 million...

Originator selling finally picks up.(Industry Overview)
June 23, 2003... Originator selling last week averaged nearly $4 billion per day, mostly in 5% coupons, as the market sell-off finally provided originators with an opportunity to sell. Mortgage spreads widened on the supply early in the week as investors showed...

Fannie Mae releases new data on its pools.
June 23, 2003... On the heels of its rival Freddie Mac, Fannie Mae also recently released additional disclosure data for its pools. Having the new data available from both GSEs makes a comparison of credit-related characteristics between the agencies possible...

Ginnie Mae's new program to improve predictability.
June 23, 2003... The implementation of significant changes in the pooling requirements of the Ginnie Mae II program will begin on July 1. Specifically the new WAC ranges for Ginnie II securities will go into effect. The sector will be more attractive to both...

CMBS is simply smooth sailing.
June 23, 2003... The recent Commercial Mortgage Securities Association (CMSA) conference in New York was considered successful, not only because of the ample attendance of around 1000, but also for the increased dialogue of hot issues and the inclusion of a...

Tough sale in Chile gets through, cuts debt costs for university.(Brief Article)
June 23, 2003... Chilean brokerage Larrain Vial made a tough sale on June 19, placing a securitization of future tuition flows rated A-' on the national scale. Universidad de Concepcion is the originator. Structured by American International Group (AIG) company...

Brazil's Unibanco brings second MT-100 this year.
June 23, 2003... Last week Unibanco became the second Brazilian bank this year to issue a deal backed by diversified payment rights (DPR). And, like its predecessor, Banco do Brasil, the choice was to go unwrapped. "They felt that the right sentiment was...

RMBS order of the week.
June 23, 2003... RMBS from all over Europe continues to flood the market. According to Dresdner Kleinwort Wasserstein there is over E9 billion (US$10.4 billion) of European prime RMBS expected to price before the end of summer. New on the scene is the E1...

Netherlands proposes important legal changes to Dutch RMBS.
June 23, 2003... The proposal for the new Draft Act,' which will make changes to the Dutch law with regard to borrower notification of any asset transfer, was submitted to parliament on May 14, 2003. Although it is not possible to predict when the new Draft Act...

Lebanon keeps Middle Eastern activity alive.
June 23, 2003... The socioeconomic and political turmoil that maintains its grip on the Middle Eastern region may be enough to keep cross-border securitization interests at bay, but it hasn't stalled domestic developments in Lebanon. This year, Lebanon has...

Bank of Japan adds ABS to its shopping list.
June 23, 2003... The Bank of Japan's Monetary Policy Meeting confirmed on June 11 the details which will allow it to purchase ABS and ABCP. This is a temporary measure: the Bank of Japan (BOJ) intends to start purchasing ABS from the end of July 2003 through...

Whispers.(Asset securitization briefs)
June 30, 2003... ABN Amro is said to be beefing up its capital markets effort in the U.S., and will likely announce a few significant hires over the next few weeks. On the structured finance side, ABN Amro is close to placing a key piece in its re-vamped...

ASF gathering offers mid-year review, advice for future.(American Securitization Forum)
June 30, 2003... * EW YORK - With a laid-back, interactive environment, more akin to a late-night talk show than an industry conference, roughly 325 participants gathered in New York last week for the American Securitization Forum's First Annual Meeting to...