Asset Securitization Report articles from June 2004

Asset Securitization Report archives from June 2004

Whispers.
June 7, 2004... Merrill Lynch has hired veteran ABS banker Bill Heskett as a managing director in its non-real estate ABS group, reporting to Managing Director Ted Breck. Heskett moved over from the Chicago office of Banc of America Securities, where he...

Senior/sub back in vogue for resurrected issuers.
June 7, 2004... The improving economy combined with investor demand for yield is allowing some of the more headline-laden issuers, who had needed surety wraps to bring offerings over the past two years, the ability to sell senior/subordinated structures once...

What's brewing in Colombia: Two deals bear the Bavaria name.
June 7, 2004... Colombian ABS players thirsty for action can toast to Bavaria. The regional beer peddler is linked to two transactions: one is a straightforward securitization to raise market funds, the other a CDO linked to arbitrage opportunities. ...

Conn. offers quasi-muni debt RRB.(Rate Reduction Bonds)
June 7, 2004... Municipal bond buyers are getting their first taste of stranded cost ABS, as the state of Connecticut is in the market with the first stranded cost securitization marketed to municipal bond buyers. The bonds, the proceeds for which are being...

Second annual ASF NYC conference.(American Securitization Forum)
June 7, 2004... The securitization industry is set to gather this week in New York for the American Securitization Forum's second annual meeting. The hot topic: regulatory and accounting issues, primarily associated with the Securities and Exchange...

Real estate ABS tops an ease-into-summer week.(Asset Backed Securities)
June 7, 2004... In the short week following Memorial Day, the ABS market eased into the summer months at a languid pace with $10.19 billion in new issuance as of press time Thursday night. Real estate ABS once again reigned supreme, accounting for about half...

Manufactured housing builder to expand finance unit.(Brief Article)
June 7, 2004... Fleetwood Enterprises, a longtime producer of manufactured housing and recreational vehicles, will be venturing into the consumer finance arena to help move its inventory, the company indicated in a filing with the Securities and Exchange...

New conduit looks to fill lending gap.(Freedom Park)
June 7, 2004... After completing its first asset purchase, alternative conduit vehicle Freedom Park is set to take the Street by storm. Administered by Promontory Asset Finance Co., Freedom Park - which was designed to complement the changing risk appetite of...

European funds provide life support for senior settlements.
June 7, 2004... Overseas investors are increasingly providing funding for senior settlement securitizations backed by pools originated in the U.S., where issuers have had a hard time lining up financing. Investors in countries that benefit from a double...

Equipment ABS set on low gear.(Asset Backed Securities)
June 7, 2004... At just shy of $3.5 billion, volume in equipment ABS is notably behind where it was at this time last year. Recent events, including the DVI Inc. debacle and the acquisition of several programmatic issuers, could put downward pressure on...

Monte Carlo makes inroads into synthetic CDOs: Moody's announces change in methodology.
June 7, 2004... Moody's Investors Service announced that it has modified its approach for rating synthetic collateralized debt obligations, moving to Monte Carlo simulation-based models from binomial approaches. In many circles, particularly Europe, the change...

Spreads continue tightening for CDOs: Carlyle found it pays to wait.(Collateralized Debt Obligations)(Brief Article)
June 7, 2004... CDO pricing can't get much better. Last week, Carlyle Investment Management was able to bring its high yield loan- backed 7.85-year triple-As at 37 basis points over three-month Libor. Carlyle High Yield Partners VI, which was led by Wachovia...

Demand for loans unwavering.
June 7, 2004... Although the potential rise in interest rates has placed a damper on most asset classes, the syndicated loans world has not lost its appeal. Instead, loans have probably been one of the most attractive asset classes around this year, and they...

Investors not put off ahead of May employment report.
June 7, 2004... Mortgage spreads ground tighter last week in better-than-expected activity. Buyers were expected to hold near the sidelines on the wait for Friday's May employment report, but they turned out to be fairly active. Investor groups included money...

Surging ARM supply causes problems for the sector.
June 7, 2004... The steadily increasing issuance of hybrid ARMs relative to fixed-rate mortgages is negatively affecting the ARM product. "While technicals in the fixed-rate market remain excellent, with diminishing net supply and moribund swaption...

May speeds expected to slow.(Brief Article)
June 7, 2004... Prior to the release of the June prepayment report last Friday (reflecting May activity), analysts were predicting a slowdown in May speeds. April speeds were the peak of the recent mini-refinancing wave, Citigroup Global Markets said. The...

Quarterly home price numbers are too volatile to count.
June 7, 2004... Though recently released home price appreciation numbers were disappointing, experts believe they do not indicate a slowing housing market but rather reflect the volatility inherent in quarterly data. Last week, both Freddie Mac and the...

Mexico's Casas Beta knows it's all about location.(Casas Beta)
June 7, 2004... Casas Beta has become Mexico's first housing developer to earmark a portion of ABS proceeds for the purchase of land. With housing demand buoyant and land increasingly precious, the competition for terrain among developers is fierce. "Land is a...

In Brazil, tuition receivables loom locally and CSN prices abroad.(Companhia Siderurgica Nacional)
June 7, 2004... Brazilian local firm Unitas is heard working on a tuition receivables deal for UniverCidade in Rio de Janeiro. The paper would amount to R$40 million (US$13 million) and probably have a term of five years, according to a source familiar with...

LatAm's first NPL to price this week.(Non-Performing Loan)(Brief Article)
June 7, 2004... Postponed by market turbulence, Latin America's first non-performing loan (NPL) deal is scheduled to price June 10, according to a source on the deal. Bogota-based Titularizadora Colombiana aims to issue the local currency equivalent of US$73...

Mexico's Protego and Banobras steer into toll road sector.(Brief Article)
June 7, 2004... A toll road deal in Mexico appeared on the horizon last week. Structured by boutique investment bank Protego, the Ps520 million (US$45 million) program for Carreteras de Cuota Puebla has a 53% guaranty from state development bank Banobras in...

Significant headway in VAT issue, but true sale still a challenge.(Value Added Tax)
June 7, 2004... New developments on the VAT directive have brought German legislation a step closer to properly accommodating domestic true sale vehicles. A circular published by the German Ministry of Finance confirms that the receivables purchaser is not...

Court of Appeal overturns Spectrum ruling.
June 7, 2004... The potentially precedent-setting Spectrum Plus lawsuit - regarding the legal treatment of a charge over book debts - has taken a surprising turn. The U.K. Court of Appeal overturned a recent High Court ruling that an unrestricted right to...

What the Court of Appeal decided.(Brief Article)
June 7, 2004... By Jerry De Melo, Cadwalader, Wickersham & Taft In its decision last week, The Court of Appeal held that the High Court was wrong to hold that the terms of the Spectrum debenture, which was in the commonly used "Siebe Gorman" form, were...

An uneasy look at U.K. master trusts as spreads show slight widening.
June 7, 2004... As U.K. master trust issuance climbs to unprecedented levels, market analysts are taking a closer look at the structure and how it has evolved over the last year. Several firms have been issuing analytical notes that look at the changing nature...

MBS to usurp credit cards in Korea.
June 7, 2004... Asia-based securitization bankers outside of Japan breathed a sigh of relief in April. When Korea First Bank completed a US$499.6 million MBS deal via UBS, it was the country's first cross-border offering since Samsung Life's US$299.6 million...

HSBC picked for CMT deal.(CapitaMall Trust)(Hongkong and Shanghai Banking Corp.)(Brief Article)
June 7, 2004... CapitaMall Trust (CMT), the real estate investment trust (REIT) established in 2002 by Singaporean property company CapitaLand, has selected HSBC to arrange a five-year S$370 million (US$215 million) CMBS deal. The transaction will be...

Taiwan spans its first REAT.(Chia Hsin International)(Industrial Bank of Taiwan)(Brief Article)
June 7, 2004... Societe Generale and Industrial Bank of Taiwan (IBT) are busy putting the final touches on what will be the first real estate asset trust (REAT) launched under the Real Estate Securitization Law. The NT$2.13 billion (US$63.5 million)...

Whispers.(Hirings)
June 14, 2004... Former Banc One Capital Markets researcher Alessandro Pagani started last week at buyside shop and CDO collateral manager Cambridge Place Investment Management as a senior credit analyst. He is reporting to firm partner John Reohr. In his new...

CSFB to lose Asia ABS head.(Credit Suisse First Boston)
June 14, 2004... While ABN AMRO made a splash last week when it announced it had hired three senior Asia-based bankers, speculation was rife that Credit Suisse First Boston is scaling back its ABS presence in the region. In fact, several well-placed sources...

ASF 2004: New perspectives.(American Securitization Forum)(Asset Backed Security)
June 14, 2004... NEW YORK - The asset-backed market is approaching a significant milestone, slated to surpass the corporate debt market in issuance for the first time in its history. Because of this threshold, and other reasons, securitization has become...

Interest rates dictate real estate strategy.
June 14, 2004... New York - Market participants will either be net buyers or net sellers of real estate depending on their view of interest rates, said Susan Hudson-Wilson, founder and CEO of Boston-based Property & Portfolio Research Inc. The remarks were made...

The SEC makes key addresses to securitization market: "It's a lot of rules and you're not used to rules".
June 14, 2004... Alan Beller, director, division of corporate finance, and Paula Dubberly, associate director (legal) of the Securities & Exchange Commission, were on hand at last week's American Securitization Forum conference. Given the SEC's recently...

DBRS releases auto methodology.(Dominion Bond Rating Service)
June 14, 2004... Dominion Bond Rating Service is touting its newly released rating methodology for auto ABS in the U.S. as a progressive approach, potentially accommodating single-B rated auto issuance. "The auto market has not seen as much in the way of...

Primary slows between conferences.(American Securitization Forum)
June 14, 2004... ABS issuance last week may have reflected a market preoccupied with the pending gathering in Barcelona as well as the American Securitization Forum's annual meeting, which took place mid-week in New York. With roughly $4.6 billion in new-issue...

Insurers sass up for Triple X deals.
June 14, 2004... Legal & General America is the company behind the next "Triple X" securitization - one of several life insurance deals slated for this year. The senior unsecured notes, likely to be in the $100 million range, are expected to have a...

How eligible is your liquidity?
June 14, 2004... The debate over appropriate risk weighting for ABCP liquidity lines may prove next to meaningless, should the cost to qualify for the better treatment outweigh the capital savings. At the forefront, the U.S. bank regulators are requiring...

ABS researchers ponder supply, spreads.(American Securitization Forum)
June 14, 2004... When it comes to the future of supply, spreads and credit, three leading ABS researchers were mostly in agreement at last week's American Securitization Forum-hosted conference. On issues ranging from relative value to research conflicts (see...

ABS researchers lament compliance environment.(Brief Article)
June 14, 2004... Not surprisingly, ABS researchers expressed frustration over the restrictive compliance environment, while speaking at last week's ASF-hosted conference. Unsure of what may be flagged as front running under attorney general scrutiny, all three...

New loan team at Hartford hits ground running, planning more CLOs.
June 14, 2004... Hartford Investment Management, the asset management division of The Hartford Financial Services Group, has hit the ground running with its new leveraged loan team. In April, the Hartford-based firm, which was already established in managing...

Fitch releases 2004 CMBS bond default study.(Brief Article)
June 14, 2004... Fitch Ratings recently conducted a study covering CMBS issued from 1990-2003. This included 914 transactions valued at about $484 billion. Of this group, 20 had at least one class defaulted by at least one of the major ratings agencies. In all,...

Rating agencies speak up at the CMSA.(Panel Discussion)(Industry Overview)
June 14, 2004... At the Commercial Mortgage Securities Association (CMSA) 10th Annual convention held here last week, rating agencies talked about their relationships with various industry participants, specifically issuers, and explained what different...

Investors moving up in coupon.
June 14, 2004... Last week, the subdued flows favored up-in-coupon trades in both the 30- and 15-year sectors. Activity was supported by a wide range of accounts including banks, money managers and hedge funds in the early part of the week. However, profit...

The upcoming MBS shutdown? Could layoffs be in the future for some MBS shops?
June 14, 2004... With the U.S. mortgage-backed securities sector on course to turn in one of its weakest performances in a decade, Wall Street pros in that sector are wondering if the drought of new issues could translate into personnel layoffs and bonus...

Chill settles on Mexican ABS issuance.
June 14, 2004... Over the last two months a spring chill has gripped ABS issuance in Mexico, jeopardizing the country's reputation as the hottest domestic market in the emerging world. The interest-rate fears besetting the U.S. were bound to seep south, but the...

LatAm debut NPL deal prices.(Brief Article)
June 14, 2004... Titularizadora Colombiana priced Latin America's first nonperforming loan (NPL) deal June 10. The US$33 million-equivalent senior tranche of a five-year piece priced at a real rate of 4.7%, while the identically sized senior tranche of a...

Tax perk revives equipment leasing in Colombia Growth spurt heralds the birth of ABS.(Alta Group, computer and equipment leasing in Colombia)
June 14, 2004... Thanks to the reinstatement of tax incentives for equipment investment in Colombia, leasing in the industry has been growing by leaps and bounds. Lessors have yet to securitize their portfolios, but the fast-paced expansion bodes well for that...

Argentine ABS issuance undeterred by rate upswing.(Industry Overview)
June 14, 2004... Gapped-out interest rates are sucking the juice from ABS issuance in some of the larger emerging markets (see Mexican issuance, p. 19), but not Argentina. Even though the country has fallen victim to the volatility seen around the world, base...

Pre-marketing deals spill into Spain.
June 14, 2004... The European new-issue pipeline remained impressively packed last week heading into the global ABS conference, held annually at Barcelona by Information Management Network. Hopefully, last-minute negotiations will not spill too far into...

U.K. lease draft to have minimal impact on CMBS.
June 14, 2004... In a consultative paper released last week, the Office of the Deputy Prime Minister (ODPM) addressed options for legislating against upward only rent review (UORR) clauses in commercial property leases. At this stage, it is not entirely clear...

Regional ABS bears fruit in Italian region of Friuli.
June 14, 2004... Clarified accounting guidelines for regions of Italy are starting to spur locally guaranteed securitizations throughout the country. Bankers are pointing to last month's PRIMA deal from the region of Friuli-Venezia Giulia as one of the first to...

Fitch initiates a closer look at SMEs.(Brief Article)
June 14, 2004... Fitch Ratings last week published post-issuance reporting standards for European SME CDOs that should lead to better liquidity for these deals going forward, the rating agency claims. A Fitch spokesperson noted that it hasn't changed its...

Asia roundup: MS expanding unit, HSBC with mandates.(Brief Article)
June 14, 2004... Showing signs of life, it appears Morgan Stanley is looking to reinitiate its ex-Japan Asia franchise. According to chatter in Hong Kong, the bank is seeking to hire someone in the SAR, having previously run its operations out of its Tokyo...

Whispers.(EmphaSys Technologies Inc.)
June 21, 2004... After 12 years of service, Ed Bankole has left his position as a team managing director at Moody's Investors Service to pursue other interests, the company announced internally last week. While there is no official word concerning where Bankole...

Tight pricing making ABS too easy for issuers?
June 21, 2004... BARCELONA - Close to 3,500 delegates attended last week's Barcelona bash, the market's largest four-day meet-and-greet, hosted each year by Information Management Network. This year's top theme? Perhaps it was the tailspin tightening...

Deloitte spurs procedural changes.
June 21, 2004... Changes in the language of engagement letters used by accounting firms prior to a transaction being offered have caught issuers and underwriters off guard. As a result, some deals initially scheduled for an earlier date are just hitting the...

Cagamas names 3 for Malaysian MBS.
June 21, 2004... Cagamas, Malaysia's state-owned mortgage company, has mandated a team of three banks to handle what could be, in Asian terms, a jumbo residential mortgage-backed securitization.Aseambankers and Commerce International Merchant Bankers (CIMB) are...

A crafty year for credit events and synthetic CDOs.
June 21, 2004... Posting growth figures over the last four years that have shown upward momentum, the credit default swap market is obviously of increasing interest to institutional investors. Yet in 2003 a record number of credit events occurred impacting the...

JPM's trustee bundles asset-pricing platform with service.
June 21, 2004... JPMorgan's Institutional Trust Service (ITS) announced an unusual course of action for a trustee service last week. It will begin to offer independent asset-pricing information pertaining to its U.S. CDO business, providing a bundled...

U.S. ABS supply rebounds to $12 billion.
June 21, 2004... Even though many in the market were basking in Barcelona last week, the U.S. primary ABS market made a respectable showing with just over $12 billion in new issuance circulating. Real estate ABS, in particular, had a busy week, with $6.37...

FFCA execs going public with new Spirit.(Franchise Finance Corp. of America, Spirit Finance Corp.)
June 21, 2004... If Spirit Finance Corp.'s recent filing with the Securities and Exchange Commission (SEC) is any indication, a new ABS player may emerge in the franchise sector, albeit with a familiar face. Spirit Finance, a real estate investment trust,...

Hyundai prices first Korean cross-border auto ABS.
June 21, 2004... Amid the recent consumer credit scare on the Korean peninsula, Hyundai Motor Co. recently priced the first-ever cross-border auto ABS backed by Korean-originated loans. The deal, led by stateside neophyte Standard Chartered Bank, was done with...

MBS Servicing 10 Years Later: The Evolution and Refinement of Criteria and Evaluation.(commercial mortgage-backed securities)
June 21, 2004... By Michael S. Merriam, Director, Standard & Poor's Ratings Services To see just how far commercial mortgage-backed securities (CMBS) servicing has come during the past 10 years, it's vital that we look back to see how different the world...

Economic data direct MBS flows.
June 21, 2004... Flows last week were dictated by the economic data and the curve reaction, particularly in relation to the favorable inflation report. The week started off quietly with some profit-taking noted from hedge funds and money managers. On Tuesday,...

Interest in CMBS floating-rate deals increases with rising rates.
June 21, 2004... With interest rates expected to increase, floating-rate transactions will probably attract more CMBS investors. As a result, it has becoming a focus for some market participants. In a recent report, Lehman Brothers said that the primary...

European cross-border investors shun cards, autos for SLABS.(Brief Article)
June 21, 2004... Student loan ABS remains the choice U.S. investment for the European buyside, as expressed by a group of portfolio managers at a panel on relative value in U.S. dollar securitization. For one, student loan collateral is more conducive to...

Emerging-market panel breaks through conference echelon.
June 21, 2004... In past years at the Global ABS conference in Barcelona, emerging-markets panels were held on the final day of the show, and often the panelists outnumbered audience members. Recent interest and a few breakthrough deals in emerging markets,...

Too much leverage in leveraged loans?
June 21, 2004... While European CLO managers have suffered less from tightening collateral spreads than their U.S. counterparts, some market players are noting a trend of borrowers in the European loan market becoming increasingly leveraged. Unlike in the...

Talk of CVRD mega-acquisition sure to excite ABS bankers.(Companhia Vale do Rio Doce S.A.)(Brief Article)
June 21, 2004... Last week was quiet on the issuance front of the cross-border market of Latin American originators, but some recent news is likely to spur activity down the road. First, bankers are no doubt licking their chops over unconfirmed media reports...

Cross-border buzz surrounds Argentina's Aluar.
June 21, 2004... Over the last few months, Argentine aluminum company Aluar has been talking to bankers about a potential export deal in the cross-border market, according to sources. Talks have apparently not crystallized into a mandate however, as key...

Argentina's Nidera pulls ING-led deal from market.(Brief Article)
June 21, 2004... In a move that surprised some observers of Argentina, exporter Nidera Argentina pulled a US$20 million receivables transaction from the domestic market. The deal would have marked the return of ING Barings as an ABS arranger since before the...

A predilection for FIDC.(Brief Article)
June 21, 2004... A first-time Brazilian issuer is prepping a receivables investment fund (FIDC) backed by trade receivables. Flour miller and poultry producer Predileto is aiming to raise up to R$50 million (US$16 million) in the market via fund manager...

Brazilian shop Unitas sees FIDC limitations for tuition deals.
June 21, 2004... Brazilian boutique investment bank Unitas is using a tuition deal it arranged for Universidade Luterana do Brasil (Ulbras) as a template for an upcoming transaction for Rio de Janeiro-based UniverCidade, said Unitas partner Joao da Rocha Lima....