Asset Securitization Report articles from March 2007

Asset Securitization Report archives from March 2007

Whispers.
March 5, 2007... Nearly two years to the day from his hire date, Randy White, one of United Capital Markets' star traders, is rumored to have left the firm. White reportedly made his exit on good terms. He joined UCM in late February 2005, as an ABS trader...

Street tightens subprime purse strings.
March 5, 2007... Wall Street dealers, some of which are rumored to be taking substantial losses from the ailing subprime mortgage market, are tightening the purse strings - in part to limit their exposure to mezzanine ABS CDOs. Rumors were running rampant last...

Jardine Lloyd and ICAP forge JV.
March 5, 2007... Jardine Lloyd Thompson Group, a risk management advisor and insurance broker, and ICAP, an interdealer broker, formed a joint venture that might, among other deals, originate and structure insurance-related ABS deals. Noting that the use...

Turkey takes big step toward MBS.
March 5, 2007... The Turkish parliament last week approved a bundle of mortgage-related amendments to current laws. The idea is to promote mortgage origination, which has lost steam since mid last year, and give rise to a viable secondary market. The changes...

Consumer ABS withstands HEL rout, dispels contagion fears.
March 5, 2007... The subprime mortgage market, stuck in a frenzied fall from popularity that began in full force several weeks ago, is generating all sorts of concerns among portfolio managers, dealers and broader financial market professionals. After last...

If a new CDO manager falls in the forest and nobody's heard of it ...
March 5, 2007... A number of market sources are predicting a Darwinian fate for CDO managers similar to that playing out among subprime mortgage lenders, as the credit cycle turns and funding can no longer be counted on. And while those established in the CDO...

Subprime lender Fremont delays 4Q filing.
March 5, 2007... Fremont General Corp., the country's third-largest subprime lender and the originator behind the first 2006 vintage collateral to receive negative rating action, announced late last week it would delay its fourth quarter earnings announcement...

Fourth quarter HPA is more in line with historical norms.(home price appreciation)(Brief article)
March 5, 2007... The Office of Federal Housing Enterprise Oversight released its quarterly home price appreciation report for the fourth quarter of 2006 last Thursday. Quarterly price appreciation was 1.12% compared to a revised 1.03% in 3Q06 (previously...

Fannie Mae retained portfolio shrinks.
March 5, 2007... Fannie Mae reported last week that its retained portfolio shrunk 4.8% in January to $721.4 billion. This compares to 12.3% growth in December to $724.4 billion. Previously, Freddie Mac reported 4.4% growth in its retained portfolio to $706.2...

SunTrust adds to subprime fears.
March 5, 2007... SunTrust Bank announced the resolution of a previously reported "non-performing loan" last week. The firm's earnings were revised downward for 4Q06 and the 2006 Fiscal Year as a result. The resolution of the commercial loan, written as a...

Mortgages crushed in flight to quality.
March 5, 2007... It was wild ride for the global bond and stock markets last week as participants reacted to fears of economic slowing in various global markets. These fears were exacerbated by comments from former Federal Reserve Chairman Alan Greenspan, some...

European securitizations afloat in spite of all the hype.
March 5, 2007... The weakness in the U.S. markets may have European securitization participants apprehensive, but it has not been reflected in European ABS market spreads, which have proved resilient and, by some accounts, relatively immune to last week's...

Cat bonds get a facelift via a synthetic CDO.
March 5, 2007... Societe Generale last week launched the first synthetic CDO of insurance and reinsurance entities on behalf of the world's fourth-largest reinsurer, Hannover Re. The deal, Merlin CDO I BV, applies synthetic CDO structuring techniques to the...

First Kazakh public RMBS turns a corner.
March 5, 2007... BTA Ipoteka (BTAI), a wholly-owned unit of Kazakhstan's Bank TuranAlem, went on roadshow last week with the country's first public RMBS. Led by ABN AMRO, the deal comes off a warehousing facility funded by one of the arranger's conduits. (ASR,...

European bank upgrades expected under new ratings approach.
March 5, 2007... Moody's Investors Service said it is looking to upgrade most European banks to Aaa' under the agency's new Joint Default Analysis (JDA). Overall, the agency will bring the long-term and bank financial strength ratings for more than 1,000 banks...

Societe Generale keeping up with the times.(Societe Generale securitization )
March 5, 2007... After several restructuring announcements made at the start of the year, the Societe Generale securitization team looks set to better embrace the number of opportunities available in the European market. Greg Medcraft, head of securitization at...

Whispers.
March 12, 2007... CIT Group, which has securitized FFELP loans in the past, is preparing to launch its first private student loan ABS deal. Deutsche Bank is expected to be lead manager on the $95.1 million PARTS Student Loan Trust 2007-CT1 transaction. The...

New Century rejects loan applications amid cash crunch, bankruptcy rumors.
March 12, 2007... Bankruptcy rumors swirled around top-three subprime lender New Century Financial Corp. last week - with one analyst likening the company's financial condition to a "death spiral" - as it ceased accepting mortgage applications and entertained...

AFC margins begin ebbing in Europe.
March 12, 2007... Although prepayment rates in CMBS transactions are beginning to level off after climbing higher in 2006, Fitch Ratings said that the levels of prepayments occurring in transactions are beginning to eat away at the interest margin for the...

Subprime servicing suffers a setback.
March 12, 2007... As some of the largest subprime mortgage lenders teeter on the edge of bankruptcy, ABS investors are turning an increasing amount of attention to the quality of servicing those loans might be receiving. Based largely upon a grim liquidity...

Wider AAA' subprime levels weaken nearterm rebound hopes.
March 12, 2007... Whenever the capital markets - or any other market, for that matter - experiences extreme booms and busts, there is usually talk of an overarching repricing of its products. Deutsche Bank in a report released March 2 bluntly said: "We are...

Aussie mortgage lender launches third Rams Funding' ABCP program.
March 12, 2007... Rams Home Loans, a specialty mortgage lender, has launched Rams Funding Three LLC and Rams Funding Proprietary Ltd., both of which will issue secured liquidity notes (SLNs). The Sydney, Australia-based lender is sponsoring the programs...

Moody's offers ray of sunshine in positive CDO report.
March 12, 2007... The structured finance CDO sector was caught once again in the turmoil of uncertain warehouse lines, liquidation and a challenging pricing environment last week, as subprime lenders and the mortgages they originated continued to show strain....

JPMorgan offers TABX/SF CDO convergence trade.
March 12, 2007... Despite significant collateral and structural differences, some market participants are expecting TABX and mezzanine structured finance CDO spreads to converge. This is an unsettling thought to CDO issuers - but a possible scenario to real...

CNH Equipment's $1.2 billion deal boosts reserves.
March 12, 2007... A weakened housing market might have changed the composition of the underlying collateral in CNH Capital America's $1.2 billion offering last week, but pricing appeared unscathed. Regular ABS issuer CNH Capital America, an...

MBS sponsorship still big with top commercial banks.
March 12, 2007... MBS and deposit activity at the top 25 U.S. commercial banks in 4Q06 showed solid MBS sponsorship, according to the JPMorgan Securities bank quarterly update. Total MBS holdings increased by $16 billion and comprised $13 billion in...

Mortgages recover as equities improve and volatility declines.
March 12, 2007... Some measure of calmness entered into the global equity markets last week, which was good news for the mortgage sector. With global markets stable to higher, volatility declined, and swap spreads tightened. The week saw active volume in...

GNMA speeds outpace targets, while FNMAs slow as expected.(Government National Mortgage Association)(Federal National Mortgage Association)
March 12, 2007... As expected, a lower day count and weaker seasonals contributed to a decline in February prepayments for FNMA securities. The overall slowing was in line with expectations for the more seasoned vintages - especially for 5.5% and 6% coupons. The...

Will subprime issues spill into the prime market?
March 12, 2007... A concern that MBS market players have when it comes to recent negative events in the subprime space is whether these will spill into the prime mortgage market. Lehman Brothers analysts in a report last week reviewed the credit performance...

CMBS spreads widen as unstable markets shake demand.
March 12, 2007... Problems with the subprime mortgage sector and the shake out in global equities market finally pierced the CMBS armor starting in late February and into the first week of March as dealers had to grapple with waning bid interest in an otherwise...

In mortgages, Turkish government goes laissez-faire.
March 12, 2007... Last week, Turkey's president Ahmet Necdet Sezer signed a series of mortgage amendments into law. The package aims to stimulate origination and create a secondary market (ASR, 3/5/07). The idea is that either covered bonds or RMBS or a happy...

HRE seeks more growth through securitization.
March 12, 2007... German real estate company Hypo Real Estate Group (HRE), the unit that spun off from German bank HypoVereinsbank in 2003, is looking to expand its securitization and asset management business, said Georg Funke, CEO of HRE. HRE is also...

Domicile's D notes still at large following regulatory call.
March 12, 2007... Moody's Investors Service has removed its ratings from the senior tranches of Provide Domicile 2003-1, Deutsche Postbank AG's German RMBS. The withdrawal of the ratings is a result of Postbank exercising a regulatory call because of the...

Better days for Mexican CMBS.
March 12, 2007... Mexican CMBS, the poor cousin to RMBS, is finally having a few pesos thrown its way. By some accounts, the second-ever CMBS in the domestic market is coming. Led by IXE, the deal amounts to 275 million inflation-indexed units (UDIs) ($94...

Mexico, other EM shrug off contagion worries.(Emerging market )
March 12, 2007... Emerging market pros are familiar with the fear of contagion. In the case of Mexico, it might seem only natural that U.S. subprime anxiety would cross the Rio Grande. But so far, the spillover effect has been nil. Most RMBS deals from...

Whispers.
March 19, 2007... United Capital Markets came out swinging last week in response to a New York Post article, which accused the company of losing some $68 million on a 10.6% stake in subprime credit card company CompuCredit. In an apparent case of guilt by...

Industry: let capital markets solve subprime fiasco.
March 19, 2007... As regulators, members of Congress and Wall Street begin to clamp down on so-called risky mortgage products within the subprime lending sector, market participants are growing increasingly concerned about the ability of borrowers currently...

Wall Street salivates over IP.
March 19, 2007... With major investment banks testing the waters, Intellectual Property (IP) securitizations have been seeing a lot of activity lately. "From an IP perspective, it's been the perfect storm in the last 18 to 24 months," said Laura Fazio,...

Wall Street player sets up Indian shop.
March 19, 2007... In India, a stream of well-intended but unfulfilled plans to get real estate investment off the ground brought about the saying: in the country, REIT stands for Real Estate Investment Tour. Craig S. Phillips, former global head of securitized...

About $10B in ABS expected amid overcast market attitudes.
March 19, 2007... Over the past week, several investment banks began hosting situation room' type sessions to begin reckoning the damage to the subprime industry and the industry's prospects for the rest of the year. The mood among many analysts, investors and...

CDOs: friend or foe to U.S. housing market?
March 19, 2007... An ugly cloud continued to hover over Southern California's otherwise beautiful, unseasonably warm weather last week. And no, it was not the smog. It was the ugly, frenzied turmoil that's struck the subprime lending industry faster than anyone...

SelectCat aims to improve risk exposure.
March 19, 2007... These days, one would be hard-pressed to find an area of the capital markets that has not been influenced by CDO practices, in one way or another. Now the reinsurance and capital markets industry has SelectCat, a product developed to guide the...

Moody's ABS co-head leaves post.
March 19, 2007... Moody's Investors Service team managing director and co-head of the term asset-backed securities team Kumar Kanthan has decided to relinquish his position for personal reasons. Kanthan will be working part time for the rating agency as a senior...

Fitch sees rise in unfunded capital commitments in U.S. ABCP programs.
March 19, 2007... by Steven Stubbs, Aoto Kenmochi, CFA, and Raman Kalra Ph.D., Fitch Ratings Fitch Ratings has observed a dramatic increase in the amount of outstanding U.S. asset-backed commercial paper (ABCP) that is being secured by unfunded capital...

Bear: ABS CDOs will not suffer fate of MH, HY predecessors.
March 19, 2007... Bear Stearns analysts last week refuted claims that the current turmoil in the subprime mortgage market would result in ABS CDO blowups similar to those experienced years ago from losses on manufactured housing loans and high yield bonds. ...

Subprime worries continue to roil mortgage markets.
March 19, 2007... Subprime was the topic du jour last week with several pieces of negative news causing more flights-to-quality into midweek. The headlines included the delisting by the New York Stock Exchange of New Century's stock and the initiation of a...

Subprime risks minimized by HPA and sector volume.
March 19, 2007... With subprime mortgage problems continuing to grab headlines, analysts are starting to look at whether subprime woes will spill over and pose systemic risk. At this point, there is little evidence that the poor performance in subprime has...

Why does Europe think it's so immune to U.S. volatility?
March 19, 2007... Last week in the U.S., the subprime debacle kept grabbing headlines that rattled wider markets. Meanwhile, across the Atlantic, spreads stood fairly firm. Why the disconnect? Well, for starters, Europe has a relatively non-existent subprime...

Several years down the line, Europe fails to provide lush opportunities for monolines.
March 19, 2007... When FGIC set up shop in the U.K., it initially got its feet wet in the CLO market as a means to generate cash flow. Three years down the line, with its current 20-member team, the company now looks to its infrastructure side as its bread and...

ISDA charged with creating noncancelable European product.
March 19, 2007... LONDON - The Loan Syndications and Trading Association said last week that the International Swaps and Derivatives Association (ISDA) has formed a working group that will determine the most appropriate approach to creating a noncancelable...

Russia's Alfa comes back in steady but less certain market.
March 19, 2007... Russia's Alfa Bank is on tour again with a euro/dollar deal backed by diversified payment rights (DPRs). Dresdner Kleinwort Wasserstein and Merrill Lynch are joint leads, reprising their roles from the last DPR paper from Alfa in December. The...

New LCDX Index could launch by May.(Brief article)
March 19, 2007... LONDON - Panelists at last week's Loan Syndications and Trading Association (LSTA) gathering in London said an LCDX Index product is in development and should be ready for launch in the next six to eight weeks. The Index will consist of...

Citigroup brings CDO for fans of emerging market FX risk.
March 19, 2007... For some time, foreign investors have been purchasing, unhedged, local paper in Mexico, Brazil and other non-developed countries. Now such products as Evolution II CDO are on offer. The deal, arranged by Citigroup Global Markets, gives foreign...

LSTA hosts inaugural European conference in London.(Loan Syndications & Trading Association )
March 19, 2007... LONDON - Last week The Loan Syndications & Trading Association (LSTA) hosted its inaugural London conference. A room full of European and U.S. players gathered to discuss the increasing cross-border business and to explore the differences...

Whispers.(Shawn Pierce)(Michael Antonicelli)(Dimitrios Papatheoharis)
March 26, 2007... UniCredit Group's markets and investment banking division has hired Shawn Pierce as a vice president in its U.S. asset-backed finance group. Pierce will be structuring conduit and term transactions and reporting to group head Robert Fleisher....

Calyon sues Mizuho, former CDO staffers, alledging resignation plunders.
March 26, 2007... In what some are calling unusual in a market where teams often hop companies en masse, Calyon SG, a unit of French bank Credit Agricole, is in the midst of suing Mizuho Securities USA and several of its top CDO bankers for alleged damages to...

Germany's novel covered bond.
March 26, 2007... Landesbank Berlin is set to create a new chapter for German structured covered bonds as it begins premarketing a new transaction that combines German covered bond (Pfandbrief) and securitization techniques. The new deal potentially opens the...

Barclays, ABN matchup mulled.
March 26, 2007... A possible merger between Barclays Capital and ABN Amro is the fixed-income investment banking relationship that everyone is talking about, mainly because of the debt capital markets growth that the latter has achieved in the last decade. ABN...

As card pricings reap rewards, Congress weighs industry regs.
March 26, 2007... Being creatures of habit, consumers generally follow this hierarchy of debt repayment: mortgages, auto loans, and then credit cards. As if alarmed at subprime mortgage borrowers' acute negligence on what is supposed to be their debt servicing...

Athlete's Foot deal schools on liens.
March 26, 2007... The holding company NexCen Brands kicked off a major retail franchise buying spree when it acquired Athlete's Foot last November. After landing a $150 million revolving credit warehouse facility to help finance the purchase, NexCen brands and...

Tense times and much analysis paint SF CDO environment.
March 26, 2007... Market participants are drumming their fingers and waiting for guidance on if - or how much - negative performance in the subprime mortgage sector will affect CDO performance. For structured finance CDOs, trying to place an overarching...

Subprime buyers look for treasure in bargain bin pricing.
March 26, 2007... Tales of challenging pricing for home equity loan deals continued to circulate last week, as yet another subprime lender filed for bankruptcy and market participants were left questioning which securities were safe. Not surprisingly, HEL...

CDPC + SIV = a longer, inevitable acronym.
March 26, 2007... Given the building momentum behind the credit derivative counterparty and structured investment vehicle craze, one would think it were only a matter of time until the two structures merged, right? According to several sources close to the...

DTC student loans in Sallie deal.
March 26, 2007... Student loan lender SLM Corp. is coming to market with a $2.2 billion transaction that, in a first for the lender, is secured by consolidated private student loans and direct-to-consumer (DTC) loans. The transaction, SLM Private Credit...

Canada close to cutting interest tax.
March 26, 2007... Canada is getting closer to the total elimination of the withholding tax on payments of interest to most non-residents of Canada. The Canadian federal government in its annual budget speech last Monday said that its on-going negotiations to...

Mortgages back in positive territory.
March 26, 2007... Attention last week was on the Federal Open Market Committee and less on the subprime market woes. Early week market flows were relatively light and two-way as investors waited for the release of the FOMC's statement on Wednesday afternoon. ...

Investors position for better convexity.
March 26, 2007... Given the current level of the Mortgage Bankers Association's Refinance Index - which is at its highest level in 18 months - combined with the elevated level of realized volatility (close to a 3-1/2 month high), investors should be looking for...

Freddie Mac's retained portfolio grows 5% in February.(Federal Home Loan Mortgage Corp.)(Financial report)(Brief article)
March 26, 2007... Freddie Mac came out with its February monthly volume summary report last week. The GSE reported that its net retained portfolio grew an annualized 5.1% to $709.2 billion in February. This compares with a gain of 4.4% in January. Year-to-date,...

Lower IG widens out again as senior triple-A conduits stabilize.
March 26, 2007... The private label new issuance sector moved onward and upward in the past two weeks, as the two largest deals in CMBS conduit space priced on the same day amid the overall credit concerns in all markets. Demand was solid and only the lower...

EM and U.S. swap roles in subprime horror flick.(Emerging markets)
March 26, 2007... It used to be that the players of U.S. high finance would barricade themselves when an emerging market turned ugly. Especially if the monster were oversized - say, Argentina in 2002 - they'd frantically seal off every approach. Like the...

U.K. government explores privatization of student loan book.
March 26, 2007... The U.K. government said last week that it is looking into the possibility of selling part of its GBP16 billion ($31.3 billion) student loan book to the private sector. Although nowhere near the volumes of the U.S. student loan market, this...

Mexico's Su Casita takes RMBS cross-border.
March 26, 2007... Mexican originator Su Casita issued a two-tranche RMBS last week via sole lead Credit Suisse, reminding players that Latin America's catatonic cross-border market in ABS and MBS did, indeed, still have a pulse. The transaction was apparently...

Ex-Soviet Union delivers fresh blood to RMBS.
March 26, 2007... When it comes to structured finance, the ex-Soviet Union is becoming what Mexico was a few years ago, as the region's infant structured finance area is undergoing a growth spurt with a number of debuts. Last week, Kazakhstan closed its...