Asset Securitization Report articles from June 2008

Asset Securitization Report archives from June 2008

Whispers.
June 2, 2008... Merrill Lynch has tapped Doug Mallach as head of U.S. fixed income, currencies and commodities asset management. His primary responsibilities will include the structuring and sale of troubled assets, such as CDOs, that were hit hard in the...

Student Loan Stopgap Measure a Success?
June 2, 2008... The Department of Education has revealed more details about its plan to promote liquidity for FFELP lenders, shedding light on two programs - loan purchase and short-term liquidity facilities - included in the recently enacted "Ensuring...

ABS Market Pauses After Memorial Day Weekend: Market players unsure whether slow week is a sign of things to come.
June 2, 2008... The ABS new issue market was slow to almost nonexistent last week, coming off the Memorial Day holiday. Industry participants said the market was "taking a breather from several weeks of relatively heavy issuance," and it was not the same...

IRS Smoothes Loan Mod Processes with Rev. Proc.
June 2, 2008... In the war against rising mortgage delinquencies, industry participants have rallied together to develop a loan modification framework that would not only help borrowers continue to pay their mortgage obligations, but also maximize proceeds for...

CS Reorganizes Structured Products Division.
June 2, 2008... Credit Suisse recently reorganized its structured products group and CDO group. These changes come after the firm shut down origination activity, cut positions and reduced its risk exposure over the past year, according to an internal memo at...

European Regulatory Initiatives: A Road Paved with Good Intentions.
June 2, 2008... Europe has had to take a long, hard look at the internal workings of its securitization industry. What has resulted is a long line of market initiatives that will help shape the future of the market and presumably avoid any catastrophic loss...

FASB's New Rules for Insurers.
June 2, 2008... The bond insurers will soon be subject to new accounting rules intended to bring greater transparency and consistency of reporting practices at a time that is perhaps the most difficult in the industry's history, an environment most recently...

MBS Show Weakness in Early Week Sell-Off: Extended holiday weekend sets the tone for low-key week in MBS.
June 2, 2008... Last week got off to a slow start as many participants extended the long Memorial Day weekend into Tuesday. Volume was significantly below normal, though mortgages did relatively well (about even to swaps and modestly underperforming the...

May Remittance Reports Offer No Surprises.
June 2, 2008... Credit performance continued to deteriorate in the May ABX remittance reports released last week. However, Lehman Brothers analysts said that there was a ray of hope - the pace of the increase in delinquent loans slowed down on seasoned...

National Asset Grows with Delinquencies.
June 2, 2008... With mortgage delinquencies on a perpetual trend upward, there is no shortage of nonperforming loans in the market. National Asset Direct (NAD) - a smaller company that purchases these types of assets - has big plans for growth in the...

Italy Looks to Initiate Loan Mods: First-ever government-led loan modification proposal gains ground in Europe.
June 2, 2008... The Italian government is proposing a new decree that allows for loan modifications. This change is aimed at making mortgage debt more affordable for certain borrowers, resembling recent U.S. government loan modification initiatives. It is...

Russian Issuers Brave Tough Climate.
June 2, 2008... As the subprime crisis metastasized into a global liquidity crunch last year, Russian banks stopped issuing cross-border structured deals. A number of originators turned to warehousing assets, hoping the facilities would go to term in the...

SIV Decision Sets Precedent.
June 2, 2008... Whistlejacket Capital, Standard Chartered's (StanChart) $7 billion SIV, has successfully appealed against the legal action that sought out a $220 million repayment of debt owed to one of its creditors. The decision could set a precedent...

Whispers.
June 9, 2008... Dan Castro has left GSC Group for Huxley Capital Management, a start-up private equity company/hedge fund, where he will be chief risk officer. In his new position, Castro will be working alongside founders Bryan Caisse and Dr. Chris Donegan....

Russia Might Warm Up Before August.
June 9, 2008... Emerging markets at the Global ABS conference in Cannes took up a sliver of the schedule - in three and a half days of talks, only three panels were dedicated to EM, and two of those dealt exclusively with Russia. Yet there were certainly...

ABS Market Sees Signs of a Summer Slowdown: Two weeks of slim deal flow start off the traditional issuance hold up.
June 9, 2008... Last week saw another round of light ABS issuance, which, after several weeks of steady issuance, had traders increasingly certain that the summer slump has begun to take effect. ABS issuance the last two weeks was a measly $3.2 billion,...

CDO Management Changes Help Earn Fees in Slow Market.
June 9, 2008... The impending summer slowdown is nothing new for the CDO market, which has already seen a slow pace of issuance for almost a year now. In an effort to counteract beleaguered volume and maintain cash flow, the market has refocused its...

The Glamour of Cannes Can't Stop the Fade of Securitization.
June 9, 2008... There was no red carpet laid out for the thousands of industry players that made it out to the Palais des Festivals et Des Congress in Cannes, the new home of Information Management Network's and European Securitization Forum's (ESF) Global ABS...

Turkish Banks Turn to European Multilaterals.
June 9, 2008... Turkish banks have been quiet on the securitization front since most of the monoline bond insurers stopped wrapping structured deals. On the sidelines of Global ABS, held at Cannes last week, officials at two Turkish banks said that the...

Post-Crisis Investors Shift to Risk Management.
June 9, 2008... The European securitization investor psyche can be pretty hard to access given the limited opportunities they currently have. But as the market gears for a recovery, tailoring deals to the buyers' needs is the key to their success. "The...

Corporates Turn to Conduits Due to Tighter Credit Conditions.
June 9, 2008... Tighter credit conditions have prompted some corporations to turn to conduits where they borrow by staking their receivables as assets, according to one market participant who said the CDO market is still subdued. "Corporates are looking...

Asset Securitization Here to Stay, ECB Official Says.
June 9, 2008... Securitization is not going away any time soon despite the market storm that has rocked global credit markets, according to Jose Manuel Gonzalez Paramo, a member of the European Central Bank's (ECB) executive board, who says the reselling of...

Gazprombank Looks Beyond Global Gloom.
June 9, 2008... Often associated with energy and corporate lending more than housing, Russia's Gazprombank nonetheless has a sizable mortgage book ($1.9 billion), and three RMBS deals under its belt for a total RUR15.8 billion ($666 million). The issuer is...

Conflicts of Interest May Continue Despite Regulation.
June 9, 2008... As the market nears the one-year anniversary of the current credit crunch, many industry participants have gotten past the initial phase of shock and have refocused their attention on learning from past mistakes. Parts of these discussions...

As Firms Cut Back, Cantor Fitzgerald Staffs Up.(Interview)
June 9, 2008... At a time when most large investment banks are slashing their fixed-income teams, Cantor Fitzgerald is making a hiring push in its debt capital markets group. Shawn Matthews, who heads the group and is based in New York, runs a sales and...

Mortgages Struggle on Flight-to-Quality.
June 9, 2008... Mortgages are off to a weak start this month as a flight-to-quality bid returned to the market last week. Lehman Brothers' MBS Index underperformed Treasurys by 17 basis points in the first two days. Other indexes were also off to a...

MBA Reports 1Q08 Delinquencies.
June 9, 2008... The Mortgage Bankers Association's National Delinquency Survey added to the negative news for the housing market. The association reported the first quarter seasonally adjusted delinquency rate rose to 6.35%, up 53 basis points from 4Q07...

Whispers.
June 16, 2008... Babson Capital Europe appointed Andrew Godson as head of distribution. Godson will be responsible for Babson Capital Europe's global sales and distribution activities as well as distributing Babson Capital Management products to European...

Can We Go Back to Barcelona?(Conference notes)
June 16, 2008... The Information Management Network (IMN) and the European Securitization Forum (ESF) held a poll last week asking European market participants where to host the next Global ABS conference. The two groups hinted at perhaps returning to the...

Banks Freeze Access to HELOC Credit Lines.
June 16, 2008... HELOC lenders are beginning to limit or freeze HELOC credit lines, according to analysts. HELOCs were defined by Credit Suisse analysts as a revolving credit generally made to prime borrowers that are in a second lien position on the...

Ratings Concerns Spur Growh of Resecuritizations.
June 16, 2008... As the Alt-A mortgage market falters, Wall Street firms are reviving an old concept to repackage triple-A bonds that may soon fall from grace. This is an effort to avert sell-offs by investors or potentially spruce up their own holdings as they...

Return to Functionality Will Take Time for CMBS: CMSA conference participants debate the future of the CMBS market.
June 16, 2008... Flashback to a year ago at the Commercial Mortgage Securities Association's (CMSA) June conference. Outgoing CMSA President Kent Born was hopeful that the RMBS subprime crisis that was spilling into CMBS would result in a stronger and more...

MBA Releases CMBS Delinquency Data.
June 16, 2008... Delinquency rates on commercial/multifamily mortgages remain low in the first quarter of this year, although they have increased slightly from 4Q07, according to data from Mortgage Bankers Association (MBA) released last week. The MBA's...

Swiss Re Looks for European Insurance ABS Opportunities.
June 16, 2008... Although the European securitization market might not have seen the worst yet from the credit crisis, insurers who focus on instances of catastrophe are making strides. Insurance-linked trading volume is growing, as evidenced by issued...

Tools for Measuring Risk Evolve in Volatile Times.(Interview)
June 16, 2008... It has been a tumultuous year in the credit markets, especially for portfolio managers who have been charged with the task of coming up with successful investment strategies, despite the industry's volatile state. At the heart of the...

U.S. Auto ABS Losses & Wholesale Vehicle Values Travel in Inverse Lanes.
June 16, 2008... There is evidence of correlation in the state of the wholesale vehicle market and annualized net loss (ANL) rates in auto loan asset-backed securities (ABS). Fitch Ratings recently assessed between how wholesale vehicle values affect recoveries...

SIFMA Expresses Concern Over SEC Proposal.
June 16, 2008... The Securities Industry and Financial Markets Association's (SIFMA) credit rating agency task force expressed concern regarding the implications of a proposal presented by the Securities and Exchange Commission (SEC) last week at an open...

B&B's Woes Leave Its Deals Gasping for Aire: Rating agency downgrades hit after the company's rights issue fails.
June 16, 2008... The recent downgrade of U.K. mortgage lender Bradford & Bingley has resulted in the breach of some triggers of its Aire Valley securitization master trust. The negative rating action could threaten certain replenishing or management provisions...

Mexico's SHF Wears More Hats In Ugly Weather.
June 16, 2008... Last year, Mexican state agency Sociedad Hipotecaria Federal (SHF)was on track to cut off direct funding of mortgage origination for nonbank entities known as Sofols by the end of 2009. But thanks to tighter liquidity, the government...

European CMBS Don't Need Liquidity Facilities.
June 16, 2008... Banks choosing against renewing liquidity facilities should have no impact on the credit quality of European CMBS transactions, analysts said. Barclays Capital's decision not to renew its liquidity facilities for both its Newgate 06-1 and...

U.K. Covered Bonds Upstage RMBS.
June 16, 2008... Funding giant U.K. mortgages via the securitization market is likely a thing of the past because the market won't prove as profitable, said industry players speaking at a panel on covered bonds at the Information Management Network's and...

Whispers.(FBR Asset Investment Corp.)(Residential Capital Management L.L.C.)(Babson Capital Management)
June 23, 2008... Two FBR Investment Mana-gement analysts are leaving the firm to start their own mortgage fund, as reported by ASR sister publication IDD. Michael Youngblood and Steve Gaenzler are leaving FBR Investment to start a new investment management and...

Talk of Peru Is More than Ado.
June 23, 2008... Banco de Credito del Peru (BCP), a pro in the future flows world, is poised to price a deal backed by diversified payment rights (DPRs) shortly. Two of its peers that have yet to tap this market, BBVA Banco Continental and Interbank Peru, are...

Issuance Remains Steady as Bid Lists Continue: Bid lists reflect market's continued aversion to mortgage exposure.
June 23, 2008... Trading in the ABS market was steady last week as new issuance continued at a steady pace via credit card and auto transactions. The secondary market appeared unaffected by news from industry alliance HOPE NOW, which last week adopted a...

Time-Share Deals Maintain Pace Despite Uncertainties.
June 23, 2008... While issuance has slowed in virtually every sector of the credit markets, time-share securitizations remain relatively untouched by investor hesitation and the credit crunch, according to market participants, who noted that deal flow has been...

Keeping it In-House: Have European Banks Become Over-Reliant on Repos?
June 23, 2008... Since the onset of financial market turmoil in August 2007, the European Central Bank (ECB), in line with other major central banks, has significantly expanded its term liquidity management operations. More recently, the Bank of England...

SEC Regulations Address Concerns But Do Not Solve Market Troubles.
June 23, 2008... Almost one year after the rating agencies had their first bloodbath of structured finance downgrades, and after months of market outcry for increased transparency and further ratings oversight, the Securities and Exchange Commission (SEC) has...

M&T Suit to Set a Trend?
June 23, 2008... Many financial institutions, including M&T Bank Corp., got burned by the CDO market's collapse resulting from the crumbling of subprime mortgages. M&T is the first major U.S. banking company to try to recoup its losses in court, but...

CRF Lands $62M Private Placement.
June 23, 2008... Community Reinvestment Fund saw its most recent private placement transform into its largest security offering to date. The demand for CRF-19, which priced on June 15, indicates this form of socially responsible investment hasn't fallen by the...

Mortgages Maneuver Through Inflation Risks: Mortgage market speculates on what the Federal Reserve will do with rates.
June 23, 2008... When is the Federal Reserve's hand going to be forced on inflation? That was the question that was fueling early week action in the markets last week. On Monday, the tone was the Fed would be increasing rates rather soon. However, an article on...

HOPE NOW Releases New Servicing Guidelines.
June 23, 2008... Recognizing that no homeowner should lose his or her home while experiencing financial hardship and considering the impending problems in the mortgage sector, HOPE NOW, the largest alliance of lenders, servicers, investors and counselors, has...

Market Optimistic on Demand for Mortgage-backeds.
June 23, 2008... The supply/demand technicals in the MBS market currently appear to be relatively stable. For the year, estimates for net issuance range between $500 billion and $600 billion, or approximately $50 billion per month. Based on the outlook for...

Whispers.
June 30, 2008... Lehman Brothers said Tuesday it has brought back two senior managers. Michael Gelband will return to serve as global head of capital markets, and Alex Kirk has rejoined as global head of principal investing. They will report to Bart McDade, the...

ABX Pricing Overstates Losses.
June 30, 2008... Considering the undisputed negative outlook for subprime mortgages, is it still possible for the ABX to overestimate expected losses on these loans? Experts say it is. A recent JPMorgan Securities report said that current prices in the ABX...

Summer Doldrums Start on Strained Balance Sheets: Student loan deals liven up a quiet market as Fourth of July approaches.
June 30, 2008... Issuance was relatively quiet last week, as the ABS market edged closer to the end of the quarter and the Fourth of July holiday. Traders attributed the lull to the relatively steady amount of issuance seen during the quarter, which has now...

Senior Players Struggle in SF Layoffs, Loan Sales See Uptick.
June 30, 2008... The devastating number of layoffs in the structured finance industry - and on Wall Street in general - has industry participants tossing around terms like "bloodbath" or "pinstripe massacre" to depict the jarring consequences of the current...

Debt Forgiveness: Ocwen Enters Uncharted Waters.
June 30, 2008... For months politicians and consumer advocates have complained that mortgage servicers have been too slow to modify the mortgages of troubled borrowers, and their calls for the industry to reduce principal balances have been met with skepticism....

More ILS News from European Issuers: ILS market gains more ground, although investors still grapple with the sector's risks.(Industry overview)
June 30, 2008... Hannover Re said last week that it had completed its first insurance-linked securities (ILS) transaction. A special-purpose entity named Globe Re was established in Bermuda for this transaction, which is capitalized at $133 million. ...

Monoline Trajectory Still Messy, Multilaterals Might Step In.
June 30, 2008... The recent ratings action that saw Moody's Investors Service downgrade Ambac and MBIA to Aa3' and A2', respectively, and XL Capital Assurance/XL Financial Assurance to B2' from A3' is causing further concerns for the European banking sector....

Auto Deals Keep Moving in Slowing Economy.
June 30, 2008... As recessionary economic conditions roil on, market participants can't help but look for the next shoe to drop. But, while the rising unemployment rate and the higher cost of gas mean increased delinquencies for the auto ABS sector, market...

Same Old for June Remit Data.
June 30, 2008... The June remittance reports offered no surprises, as usual. The reports did not show any notable change in the direction of subprime delinquencies as well as losses, UBS analysts said. "Overall 30- and 60-day delinquencies were roughly...

Fitch Warns About Re-Remics.(Brief article)
June 30, 2008... Investors should be cautious when looking at re-REMIC offerings, said Fitch Ratings. With the recent scarcity in new RMBS volume, re-REMIC issuance has in-creased. However, Fitch believes that some recently issued re-REMICs have had...

MBS Market Relatively Quiet on FOMC Wait: Federal Reserve thinks there's less downside risk but mortgage volume is still not up to par.(mortgage backed securities)(Federal Open Market Committee)
June 30, 2008... The wait for the Federal Open Market Committee's (FOMC) statement on Wednesday afternoon kept mortgage volume below normal in the first half of the week. Flows were mixed, although tilted toward better selling. Asian investors were a light...

Analysts Worry Over Mortgage Buying.
June 30, 2008... The question many market participants are asking: Is there (backstop) support for the mortgage market from the GSEs and banks? Recently, Lehman Brothers analysts estimated that given the easing in GSE capital surplus requirements, the...

Spanish RMBS Troubles Mount But Quality Holds Up: Troubles Mount But Quality Holds Up.
June 30, 2008... Like their peers elsewhere, Spanish mortgage originators are staggering through a tough year, but the economic headwinds they face are especially daunting. Yet delinquencies, while up, are still far from alarming. For now, participants are...