Asset Securitization Report articles from June 2005

Asset Securitization Report archives from June 2005

Whispers.
June 6, 2005... Peter Cerwin has joined C-BASS as a managing director in the capital markets group, where he will focus on new business opportunities and executing transactions from a capital markets perspective. Cerwin joins C-BASS after four years as a...

New CMBS warehousing facility in Europe.(commercial mortgage backed securities)
June 6, 2005... Cadwalader, Wickersham & Taft putting the finishing touches on a new CMBS warehousing facility for CMBS and commercial property loans throughout Europe - the first of its kind in Europe. The financing for a GBP1 billion ($1.8 billion) fund is...

Are MBS refis on the rise once again?(FTN Financial Capital Markets)(mortgage backed securities)
June 6, 2005... With the 10-year Treasury going below the 4% threshold, market fears of an imminent refinancing wave have resurfaced. Although market participants vary as to what specific threshold would tip the market over, everyone is aware that another refi...

Appetite for Turkey fuels $2bn in deals.
June 6, 2005... With Turkey's Akbank close to placing an up to $1 billion deal at press time, the country will have produced about $2 billion in DPR-backed paper since mid-May. This volume of Turkish structured paper is unusually high in such a short time...

JPM examines New Century portfolio.(J.P. Morgan Securities Inc.)(Brief Article)
June 6, 2005... JPMorgan Securities this month concluded its first loan-level analysis of New Century Financial Corp.'s servicing portfolio since the subprime mortgage lender began using a new servicing platform in late 2002. New Century, the nation's largest...

A big week for subprime REITs.(real estate investment trusts)
June 6, 2005... Subprime mortgage REITs Aames Investment Corp., ECC Capital Corp. and NovaStar Financial Inc. each offered more than $1 billion apiece of ABS recently, as well as a myriad of other news. Encore, run by a group of former executives at...

ASF to provide mid-year assessment at upcoming conference.(American Securitization Forum)
June 6, 2005... A variety of challenges face the ABS market both long and short term and in response to concerns, the American Securitization Forum is hosting its annual meeting this month, with a focus on communicating relevant topics to a broad market...

U.S. ABS primary prices over $7 bln in holiday week.(asset backed securities)
June 6, 2005... The U.S. ABS primary market priced a healthy $7 billion in an abbreviated week that also witnessed whispers of a slow-down in the Federal Reserve's "measured pace" of rate hikes. Dallas Fed President Richard Fisher reportedly said the Fed is in...

CIT tests student loan waters with $1 billion deal.(CIT Group)
June 6, 2005... The CIT Group priced $1 billion of FFELP-guaranteed student loan-backed notes last week, in a five-tranche deal led by Citigroup Global Markets and Credit Suisse First Boston, its first transaction in the sector. A source close to the deal...

Bankruptcy filings climb but chargeoffs down slightly in CCABS.(Brief Article)
June 6, 2005... Despite Personal bankruptcy filings having climbed to record numbers for the second month in a row with 170,130 filings in April, credit card chargeoffs seem to be holding stable, according to a report from Fitch Ratings. April's numbers...

Friedman Billings Ramsey finds good in subprime IOs.(interest only)
June 6, 2005... Michael Youngblood, head of ABS research at Friedman Billings Ramsey, said last week that investors should be more concerned about the general prospect of payment shock to be experienced by all adjustable rate subprime borrowers - either with a...

ABN AMRO issue adds good citizen to Australian CDO market.(Collateralized debt obligations)
June 6, 2005... ABN AMRO plans to raise the bar for Australia's so-called socially responsible fixed interest rate investment vehicles with its newest CDO issuance set for Friday. The Rembrandt Australia Trust 2005-1 (Responsibility, Ethics, Environment,...

Fewer restrictions in junk bond covenants could allow for more cutout' securitizations.
June 6, 2005... As if the high-yield bond market hasn't treated private equity firms well enough already, some financial sponsors are now pushing for more flexibility in the covenants - or the restrictions around a company's capital structure - that govern...

Active week in mortgages as 10-year Tsy moves through 4%.(treasury)
June 6, 2005... It was an active week in mortgages last week as the 10-year Treasury pushed through 4% to the 3.90% level. There were several reasons for the strength in Treasurys including the setback for the EU on France's Constitutional rejection; the...

UBS: Fannie Mae on track to meet its capital needs.(Federal National Mortgage Association)
June 6, 2005... Fannie Mae is on track to meet its September deadline to reach the 30% capital surcharge set by the Office of Federal Housing Enterprise Oversight, UBS analysts said in a report released last week. This is why concerns about a massive portfolio...

Market welcomes House GSE bill.(Government-sponsored enterprises)
June 6, 2005... Market participants view the passage of the Baker-Oxley Bill (H.R. 1461), the House of Representative's version of the GSE Reform Bill, as a positive step towards enacting GSE legislation by this year. The bill is seen as GSE-friendly as it...

Freddie Mac and OFHEO report home prices rise.
June 6, 2005... The Office of Federal Housing Enterprise Oversight reported significant home price growth in its quarterly survey on price appreciation released last week. Over the 1Q04 through 1Q05 period, the OFHEO reported average U.S. home prices rose...

Italian GDP revised based on Eurostat view.(Gross Domestic Product)(European Union. European Commission. Statistical Office)
June 6, 2005... Italy provided yet another fiscal disappointment last week when Eurostat, the European Communities' stats bureau, revised its outlook on the treatment of a number of securitization transactions and in the process rejected the 2003 and 2004 GDP...

Shaky corporate market could drive captive auto issuance in Europe.
June 6, 2005... European auto paper got off to a slow start this year, but market sources say that auto ABS supply has historically been uneven compared to the U.S. However, changes on the horizon could see issuers becoming more dependent on securitizations....

New German pension linked ABS on radar.(Asset backed securities)
June 6, 2005... Germany announced plans to issue a 6 billion ($7.9 billion) securitization of pension fund contributions by the former Deutsche Bundepost, now Deutsche Telekom, Deutsche Post and Deutsche Postbank. The deal was expected to roadshow this week...

Prepayment boom in Chilean RMBS tarnishes asset class.(Residential Mortgage Backed Securities)
June 6, 2005... Chile's domestic RMBS has lost a lot of friends over the last several months. An unprecedented jump in prepayment levels, particularly among prime borrowers, has led to downgrades in the sector and convinced investors that cashing out is the...

Metrofinanciera issues $138 million worth of domestic paper.
June 6, 2005... Mexican housing finance company Metrofinanciera is expected to price a two-tranche $200 million deal in the cross-border market in the short-term, but, in the meantime, the issuer placed two transactions last Wednesday via sole lead IXE for a...

Whispers.(American Securitization Forum)
June 13, 2005... SG Corporate & Investment Banking hired David Stern as head of securitization syndicate Americas, responsible for coordinating the pricing and underwriting of new-issue ABS, CMBS, RMBS and CDOs. In his new position, he reports to Bob Woods,...

Ford floorplan deal likely the last for near term.(Ford Motor Credit Co.)
June 13, 2005... After proving that it has access to funding with its successful wholesale dealer floorplan transaction last week, Ford Motor Credit is unlikely to tap the U.S. floorplan sector for the foreseeable future, sources said. Despite the strong...

Mexico's GMAC unit & IFC link up.(GMAC Financiera)(International Finance Corp.)
June 13, 2005... GMAC Financiera recently closed a deal with the International Finance Corp recently that will lend traction to the secondary-mortgage market coming to life in Mexico. Out of a total financing by the IFC of $115 million, a revolving credit line...

Indonesian coal ABS surprises.(asset backed securities)
June 13, 2005... In a move that has caught most ex-Japan Asian bankers by surprise, Indonesia will shortly see its first securitization since the Asian financial crisis took hold in 1997. Merrill Lynch will arrange and underwrite a $600 million future-flow...

Merrill: Outlook for HELs brightens amid expected rate-hike ease.(Merrill Lynch and Company Inc.)(home equity loans)
June 13, 2005... At least half-smiles must be creeping across the faces of home equity ABS investors, as even the most notoriously bearish participants collectively shift their outlook on rising long-term interest rates. While Treasurys are expected to rally on...

Moody's talks servicer risk in auto deals.(Moody's Investor Service)
June 13, 2005... NEW YORK - At its Auto Securitization Briefing held here last week, Moody's Investors Service discussed servicer risk as it relates to different types of auto securitizations. Annika Sandback, vice president in the asset finance group, isolated...

Autos, cards well represented as U.S. ABS primary prices $18 billion.(asset backed securities)
June 13, 2005... The U.S. ABS primary market priced over $18 billion last week as the auto and credit card sectors carried a palette of deals. The big stories of the week were General Motors Corp.'s announcement that it will cut 25,000 workers by 2008, and...

Credit card industry hit with double-whammy of consolidation.
June 13, 2005... ABS issuance in the credit card industry might see a slow-down in the short-term as consolidation gains traction with the recently announced acquisitions by Citigroup Inc. and Washington Mutual Inc. Over the long term, however, fewer players...

CREMAC sells off CDO-bound bonds.(collateralized debt obligations)(Communaute Roumaine Electroacoustique et de Musique Assistee par Ordinateur)
June 13, 2005... Despite CREMAC's recent sale of $180 million in high-yield bonds previously earmarked as collateral for the firm's first CDO offering, it intends to issue its three CDOs this year using different collateral, said Joseph Cafiero, president of...

Moody's gives Ford, GM six months notice.
June 13, 2005... Analysts with Moody's Investors Service said they are giving Ford Motor Co. and General Motors Corp. six months to prove themselves worthy of their current ratings. Speaking at Moody's' Auto Securitization Briefing last week, Bruce Clark,...

Timber-backed notes causing trouble.(Scotia Pacific Company LLC)
June 13, 2005... Troubled lumber company Scotia Pacific Company LLC is working with UBS Securities to restructure $734 million of timber-collateralized notes. Scotia, a subsidiary of Houston-based MAXXAM Group Inc. is widely anticipated to miss its $27 million...

Fitch: Market-based approaches key for asset correlation modeling.
June 13, 2005... Analysts at rating agency Fitch Ratings warned recently against relying solely on historical credit default or ratings data to decipher the level of risk involved in a particular CDO tranche. Instead, using market-based methodologies provides a...

Market may see more re-issued market-value CDOs.(collateralized debt obligations)
June 13, 2005... The market may begin to see increasingly more re-issued market value CDOs. That's because a significant amount of market value CDOs, which have performed relatively well, were launched in the late 1990s, so the first crop of such deals is...

It was all about FNMA 5s last week.(Federal National Mortgage Association)
June 13, 2005... Last week's trading focused almost exclusively on FNMA 5s - at least until Federal Reserve Chairman Alan Greenspan began speaking. Throughout the week, the focus on FNMA 5s took attention away from other market activity, making new issue CMO...

Structural innovations changing CMBS landscape.(commercial mortgage backed securities)(Panel Discussion)
June 13, 2005... NEW YORK - At the Commercial Mortgage Association's Eleventh Annual Convention held here last week, participants focused on the evolution of deal structures, which has been a major theme in the CMBS market over the past year. Participants...

May prepays in-line to slightly faster.(Brief Article)
June 13, 2005... May prepayments were in-line to slightly faster than consensus expectations, especially for GNMAs. Speeds were expected to be unchanged to slightly faster for 4.5s, 5s, and 2004 vintage 5.5s and 6s, while other coupons and vintages were...

Data shows continued ARM dominance over fixed MBS.(Bear Stearns Adjustable Rate Mortgage Conference 2005 )
June 13, 2005... NEW YORK - At the inaugural Bear Stearns Adjustable Rate Mortgage Conference 2005 held here last week, participants focused on the incredible growth in the sector and investment opportunities resulting from it. However, concern about credit -...

Credit concerns are an ARM full at Bear conference.(Adjustable Rate Mortgage )
June 13, 2005... NEW YORK - From the rating agency to the investor panels and all throughout the different presentations, credit issues relating to ARMs were a big topic at the Bear Stearns first-ever Adjustable Rate Mortgage Conference 2005 held here last...

ABS CDS template proves contentious.(asset backed securities)(credit default swap)
June 13, 2005... The European synthetic market continues to be strong with a wide variety of derivative-linked products being offered to investors. One issue currently facing the market is the debate over the templates to be used for credit default swaps on...

Pricing moves in ahead of Barcelona conference.
June 13, 2005... A large number of industry participants will be headed to Spain next week but the pipeline is sure to keep most in working order. By mid-week, bid lists totaled approximately 1.5 billion ($1.8 billion) and all bonds' levels reflected improved...

Ireland increasingly a destination of choice for ABS.
June 13, 2005... Ireland's positive taxation legislation has helped establish it as one of the leading securitization jurisdictions in Europe, say sources at Wilmington Trust, which set up shop in Dublin six months ago. "Six months down the line business is...

Fitch: European Consumer ABS performance stable.
June 13, 2005... Fitch Ratings said in a teleconference last week that Pan-European consumer ABS issuance has risen and the economic factors behind the market are looking strong enough to support the rise in delinquencies charted by the agency's consumer ABS...

Turkey's Denizbank plans $200 mln DPR in busy market.(Brief Article)
June 13, 2005... Denizbank is joining the recent spurt of activity by Turkish banks in the DPR sector. The originator has scheduled a transaction for up to $200 million for the end of this week via sole lead Merrill Lynch, according to a source. The legal final...

Patrimonio sticks to senior/sub, looks ahead to RMBS.(residential mortgage backed securities)(Patrimonio del Estado)
June 13, 2005... Mexican housing finance company Patrimonio has penciled in a Ps800 million ($74 million) ABS for pricing in mid June, its second bond backed by bridge loans for construction, infrastructure projects and property acquisition. Led by...

Korea, Taiwan and Thailand keep Asia bustling.
June 13, 2005... It is shaping up to be a busy summer for the Asian securitization market, with deals expected from nearly all countries in the region. Issuance has already begun in earnest, as Korea, Taiwan and Thailand have all produced deals in the last two...

Whispers.(appointments in securities industry)
June 20, 2005... Greg Reiter has joined the UBS rates research team in New York as a director in the mortgage group, reporting to Jeff Ho, head of MBS strategy, and Laurie Goodman, co-head of fixed-income research. Reiter will be responsible for relative value...

Spread debate dominates Global ABS Conference in Barcelona.(Asset backed securities)
June 20, 2005... BARCELONA - For every good party, there are swarms of uninvited just waiting to crash it. And as one participant at Information Management Network's ninth annual Global ABS Conference' held here said last week, "the party has been crashed." ...

Whole loan sales develop in Europe.
June 20, 2005... European mortgage lenders seeking diversified capital market funding will increasingly turn to whole loan sales as an alternative to securitization, which, like in the U.S., is likely to lead to even higher levels of residential mortgage loan...

Mexico yields cottage industry for ratings.
June 20, 2005... Mexican investors have midwifed a new business niche for the rating industry by encouraging trustees and common representatives (see inset, p 22) to seek standardized evaluations. "About a year and half ago, the pension funds sent trustees and...

Morgan Stanley serves up BBB minus home equity sandwich.
June 20, 2005... In a research report last week, Morgan Stanley's ABS research team examined the relative value of combining a double-A/double-B plus trade, versus a standalone triple-B minus trade in the home equity sector, showing that on both a credit...

MBNA continues Sky Financial's legacy with dental loan deal.(MBNA Corp.)
June 20, 2005... MBNA Corp. announced a $370 million fixed-rate deal backed by equipment loans to dental practices through its subsidiary MBNA Practice Solutions, Inc., formerly Sky Financial Solutions, Inc. Sky Financial had been a regular issuer of such deals...

Navistar back in market with lease-backed notes.
June 20, 2005... Navistar Financial Corp. was back was in the market last week with $600 million in a truck loan- and lease-backed private placement. The deal represents a refinancing of the $500 million series 2000-1 deal out of Navistar's Truck Retail...

U.S. ABS primary generates $15 billion in Barcelona week.(Asset backed securities)
June 20, 2005... Not even the Global ABS Conference' could stop the heady U.S. ABS primary market from pricing and marketing nearly $15 billion in yet another strong spring week ahead of the end of the second quarter. As the conference raged in Barcelona last...

Merrill carpools four originators to drive auto whole loan deal.(Merrill Lynch and Company Inc.)
June 20, 2005... Merrill Lynch priced a $1.8 billion deal backed largely by prime retail auto loans purchased wholesale from Capital One Financial, Ford Motor Credit Co., E-Loan Inc. and Onyx Acceptance Corp. The deal represents the first auto loan...

FNMA 5s stealing the show again.(Federal National Mortgage Association)
June 20, 2005... Activity focused around the conventional 5 roll last week with the coupon attracting strong buying from just about everybody - dealers, fast money, and money managers. In mid-week comments from JPMorgan Securities, analysts noted the strength...

Analysts increase focus on IO prepays as volumes rise.
June 20, 2005... With the IO product expanding its market share significantly, analysts expect it to overshadow other affordability products, specifically the 40-year mortgage. As a result, there is now increased attention on the prepayment performance of IO...

Watch out for condo conversion loans.
June 20, 2005... The conversion of properties into condominiums has risen considerably and rating agencies are starting to show concern that the sector is overheated. Fitch Ratings, in particular, said last week that these loans are riskier than traditional...

Lehman discusses ARM-to-fixed refi potential.
June 20, 2005... Given the recent yield curve dynamics, there has been talk about the potential for ARM-to-fixed refinancings. Based on their analysis, Lehman Brothers does not expect a reversal of the recent structural shift towards hybrids. Lehman...

Neighbors on land, but not yet commingling in ABS pools.(Asset backed securities)
June 20, 2005... BARCELONA - Alas, a multinational residential mortgage securitizations still only exists in the dreams of nail-biting-real-estate-bubble-phobes in search of the ultimate in geographically diverse loan pools. Such a concept may only be a pipe...

European issuers speak out.(Brief Article)
June 20, 2005... BARCELONA - For first-time European issuers, the primary objective of securitization is funding, followed by capital relief, according to preliminary results of a PriceWaterhouse Coopers survey of originators in the market. As well for...

Prepare to say Guten tag' to German ABS.(Asset backed securities)
June 20, 2005... BARCELONA - Germany is gearing up to become the next big European playground for investors seeking new assets to securitize - as well as a gateway to Eastern European opportunities. German investors are seeking efficient funding sources for...

ABS CDS: How much longer will they be in the dark?(Asset-Backed securities)
June 20, 2005... BARCELONA - Market players are coordinating to create both in-house and publicly available ABS credit default swap indices - a much needed reference point for the rapidly growing market, they said. A pricing index for CMBS could be available by...

ABCP innovations to provide all kinds of new liquidity.(Asset backed securities)(Asset-Backed Commercial Paper)
June 20, 2005... BARCELONA - A number of conference participants last week said they anticipate the asset-backed commercial paper market, particularly in the single-seller and extendible paper arenas, to experience growth this year as companies look to...

Barcelona break offers short pause in busy Europe market.
June 20, 2005... After a sluggish 1Q05, European ABS volume is back on track and analysts report that a healthy visible pipeline could hoist volumes for 2005 above January forecasts. The European Securitization Forum said issuance in the European securitization...

Italian NPL could spawn new sources of issuance.(non-performing loans )
June 20, 2005... Italian non-performing loans might not experience the boom enjoyed in past years because, at the moment, there is little incentive for banks to tap the securitization market (see ASR 6/16/02). Still, reasonable growth in the sector and evolving...

Brazil turns out FIDCs, with BMG, Martins and VCP issuing.(BMG FIDC Creditos Consignados IV)(Martins and Banco Triangulo)(Votorantim Celulose e Papel S.A.)
June 20, 2005... The Brazilian receivables investment funds market is moving briskly along. Currently selling shares is BMG FIDC Creditos Consignados IV, a transaction that originator Banco BMG is backed by personal loans to retirees and pensioners of the...

Mexico: Patrimonio prices, Acapulco due after summer.(Tuneles de Acapulco)
June 20, 2005... Mexican real estate-finance company Patrimonio priced a Ps800 million ($74 million) ABS last Wednesday. The Ps672 million, five-year Class I' notes priced at 125 basis points over 28-day TIEE, with 85% of that piece providing a yield the...

CIMB secures place as Malaysia's dominant ABS arranger.(asset backed securities)(Commerce International Merchant Bankers Bhd.)
June 20, 2005... Followers of the Malaysian securitization market will have noticed the fierce level of competition among foreign firms bidding for the country's key ABS mandates. Those paying close attention may also have noticed the recurring presence on...

Double the fun for Cagamas SME deal.(small and medium enterprise)
June 20, 2005... After a selection process that began towards the end of 2004, speculation is rife that Cagamas, Malaysia's secondary mortgage agency, has finally decided on who will arrange its SME-loan securitization. In a new twist, reports from Kuala Lumpur...

Whispers.(Guggenheim Capital Markets)(Hypovereinsbank NV)(briefs)
June 27, 2005... Guggenheim Capital Markets recently hired Steven Finnk as senior vice president in the structured products trading group to work on its New York-based trading desk, where he will trade ABS and CDOs. Finnk joins from United Capital Markets,...

Rating agencies take a harsher look at neg am mortgages.(negative amortization loan)
June 27, 2005... With the increase in option ARM, or negative amortization loan, securitizations, rating agencies are starting to take a harsher look at these loans as evidenced by Fitch Ratings and Standard & Poor's revising enhancement criteria on these...

Canadian conduits to buy more CDOs.(collateralized debt obligations)
June 27, 2005... Dominion Bond Rating Service is expecting Canadian conduits to become an increasingly larger player in the CDO market. The rating agency is projecting conduit CDO purchases to grow to 15% to 20% of conduit outstandings next year, up from a...

1st Indonesian ABS since 1997 prices.(asset backed securities)
June 27, 2005... Indonesian energy company PT Bumi Resources priced last Wednesday the country's first international securitization since the Asian Financial Crisis hit in 1997 (see ASR 6/13/04). Merrill Lynch acted as arranger and sole bookrunner on the $600...

FBR: deteriorating' underwriting standards fodder of uninformed.(Friedman Billings Ramsey)
June 27, 2005... Friedman Billings Ramsey released another positive report on the state of underwriting in residential mortgage loans in which its author, Michael Youngblood, FBR's head of ABS research, is sure will be controversial. Youngblood said the concept...

Good times keep rolling as U.S. ABS primary hosts $25 billion.(asset backed securities)
June 27, 2005... The ABS primary market steamed onward into the first official week of summer as $25 billion in new issues were in the market. By some calculations the market has already outpaced 2004 year-to-date by nearly $150 billion in issuance, and no one...

Fleet issuer breaks into term market with $500 million deal.
June 27, 2005... The auto fleet lease sector witnessed the coming of a first-time entrant last week as Chicago-based leasing company Wheels, Inc. priced a private, $500 million deal led by JPMorgan Securities, its first ever term securitization. Wheels had...

Florida, New Jersey boards approve stranded cost ABS.(asset backed securities)(Florida Public Utility Commission)(Brief Article)
June 27, 2005... The state utility boards of Florida and New Jersey last week helped clear the way for power companies within their states to issue utility ratepayer-backed bonds. The Florida Public Utility Commission ruled to allow Tallahasee, Fla.-based...

CRE CDOs coming down the pipeline.(Five Mile Capital Partners)(collateralized debt obligations)(commercial real estate)
June 27, 2005... Two first-time CDO managers are closing a pair of separate deals in the coming weeks, both backed predominantly by CMBS. Real estate investment trust Gramercy Capital Corp. priced a $1 billion CDO last week, and SCFFI GP LLC, an affiliate of...

MBS flows follow yield curve movement.(mortgage backed securities)
June 27, 2005... The FNMA 5 roll seemed to fade into the background last week, as the market was in a waiting mode for late week Federal Reserve information on net dealer positions and bank holdings (see story p. 14). JPMorgan Securities analysts report that,...

Squeeze in FNMA 5s could affect MBS pricing and liquidity.(mortgage backed securities)
June 27, 2005... The 30-year FNMA and Gold 5s have in recent months seen a severe squeeze, causing the coupons to significantly richen and resulting in a considerable dislocation in the TBA roll. As of late last week, the fate of the July and August rolls...

UBS expects sharp increase in Asian support.(Union Bank of Switzerland)(Brief Article)
June 27, 2005... In discussing the demand from Asian central banks for MBS, UBS analysts reported that foreign demand is likely to keep spreads tight, and that fixed-rate agency passthroughs, given their quality, should benefit disproportionately as the...

Lehman breaks down characteristics of 40-year loans.
June 27, 2005... With Fannie Mae now buying 40-year mortgages, it will not be long before those loans end up in securitizations. In response to this, Lehman Brothers analysts put 40-year mortgage collateral under the microscope and looked at how those loans...