Asset Securitization Report articles from March 2008

Asset Securitization Report archives from March 2008

Whispers.
March 3, 2008... John Kendall recently rejoined the team at Mason Street Advisors, taking up a position in its non-agency mortgage group, according to market sources. Kendall worked at Mason Street up until four years ago, when he left to join Fieldstone...

When It Comes to Information, More Isn't Always Better.(consumer awarness on asset backed securities)
March 3, 2008... European securitization investors complain that they are being seen as childlike - they say it's not childish fear that's keeping them away, but rather not knowing what the final outcome will be once all the bad news is finally over. The...

Sallie, Cleco Deal Highlight ABS Week : Morgan Stanley preps mortgage deals, Banc of America cards in pipeline.
March 3, 2008... ABS issuance slowed to a crawl since the last press time, yielding just a $1 billion Sallie Mae deal on Feb. 22, and a $180 million ratepayer-backed ABS last Thursday. Those investors who did not abstain from buying the SLM Student Loan...

Katrina, Rita Recovery Bonds in Works.
March 3, 2008... Cleco Power, a Louisiana utility company, issued bonds last week that will finance the cost of repairs of more than $160 million damages sustained after hurricanes Katrina and Rita devastated the region more than three years ago. The...

Citi Details ABCP CDO Exposures.
March 3, 2008... Citigroup made news last December when it decided to consolidate about $49 billion in SIV assets onto its balance sheet. In its most recent 10-K filing, released on Feb. 22, Citigroup revealed that it had consolidated significant interests in...

CLO Market Likes Its Transactions In Cash, Sources Say.
March 3, 2008... While one could hardly call the CLO market healthy, the rumors of its demise may be slightly exaggerated. It's not impossible to get a CLO transaction done, though a significantly easier time will be had by all if arrangers stay realistic about...

Prepays Slow Down in February Remits.
March 3, 2008... February remittance data offered almost no surprises, which, given the state of the struggling economy, means more bad news. The increase in delinquencies and foreclosures came with a slowdown in prepayments, although the rate of some losses...

Citi Forms Risk Management Group.
March 3, 2008... Citigroup announced last week that Brian Leach will assume the role of chief risk officer, reporting to Chief Executive Officer Vikram Pandit. Leach will also become acting chief risk officer for the institutional clients group. The...

FHLMC's New Guidelines to Slow Refis: New delivery fee structure will impact refi transaction costs.
March 3, 2008... Freddie Mac's new, stricter guidelines for the delivery fee structure of 30-year mortgages might hinder refinancings. The just-announced fee structure based on both FICO and LTV decreases the fee on low LTV/low FICO borrowers, while...

Market Turmoil Hits Freddie and Fannie.
March 3, 2008... Two weeks after an economic stimulus package expanded the role of GSEs by temporarily raising their conforming loan limits, Freddie Mac and Fannie Mae are once again confronted with significant financial concerns. Freddie Mac reported a...

MBS Soar on OFHEO Announcement to Lift GSE Portfolio Caps.
March 3, 2008... Mortgages finally got their day in the sun on Wednesday - and not on anything that Federal Reserve Chairman Ben Bernanke said in his semiannual address to Congress. The day, in fact, was off to a rough start following weaker-than-expected...

OFHEO Reports Dismal News for CA, FL, NV.(Department of Housing and Urban Development. Office of Federal Housing Enterprise Oversight )(decline in price index of residential real estate)
March 3, 2008... The Office of Federal Housing Enterprise Oversight (OFHEO) reported that home prices declined 1.3% (5.2% annualized) in its seasonally adjusted purchase-only 4Q07 House Price Index compared with a 0.3% (1.4% annualized) decline in the third...

BBVA Colombia has Landmark Deal in the Works.(BBVA Colombia provides consumer loan service)
March 3, 2008... BBVA Colombia has a consumer loan transaction in the works that's the first of its kind in the country. The only deals that have been done in the vicinity of this asset class is a securitization of payroll-deducted loans two years ago and a...

Standard Chartered's Whistlejacket Defaults on its Obligations.
March 3, 2008... Standard Chartered SIV Whistlejacket has defaulted on its obligations and might be set for an orderly unwind. However, for ABCP buyers, the StanChart situation signals a loss in confidence that bank-sponsored deals would be supported by...

BBVA to Issue 2nd Mex RMBS of 08.
March 3, 2008... BBVA Bancomer has registered a new RMBS with Mexican regulators, and mortgage insurance from Genworth is attached. This comes after the only closed Mexican RMBS so far this year, a deal from Metrofinanciera, had MI from both Genworth and...

Banks Face Write-downs on CMBS Market Unease.
March 3, 2008... Mortgage market participants have been keeping a close eye on the CMBS market, which has seen spreads gap out drastically in recent months. While many CMBS industry experts argue that credit concerns are overblown, the current crisis of...

Regional Banks Downgraded.
March 3, 2008... Moody's Investors Service downgraded a number of regional and community-based banks on concerns about their exposures to commercial real estate. The rating agency also looked at the potential losses in the affected banks' CRE portfolios. ...

Whispers.
March 10, 2008... Alexander Rekeda joined Guggenheim Capital Markets as managing director and head of CDOs, effective last Monday. Rekeda was previously head of structured credit, for the Americas at Mizuho Securities, which he joined in November 2006. Mizuho...

Repos Losing Steam As Stand-In Financing.
March 10, 2008... Solitaire Funding did it; so did Grampian Funding and a list of other asset-backed commercial paper vehicles. After skeptical investors stopped buying recherche ABCP assets - namely those with arbitrage, extendible-note and market-value...

Thornburg Breaks MBS Silent Streak : Credit cards in play again, while A.M. Best chimes in on insurance notes.
March 10, 2008... Thornburg Mortgage has been making headlines for all sorts of reasons lately. The most notable is that it received and met margin calls on its reverse repurchase agreements that exceeded $300 million between Feb. 14 and Feb. 27. In a...

Standard & Poor's Announces 30 Structured Finance Dismissals.
March 10, 2008... Credit rating agency Standard & Poor's elaborated on its previously announced plans to cut 172 jobs, saying it will dismiss about 30 of its structured finance analysts by month's end. The company announced its intentions in an email to...

FSA Thrives Against the Odds.
March 10, 2008... Despite the problems besetting its fellow bond insurers, Financial Security Assurance (FSA), the third largest financial guarantor, has been riding high. Wholly owned by Franco-Belgian bank Dexia, FSA has been able to keep its AAA' ratings...

Tranche Warfare Boosts U.S. CDO Activity.
March 10, 2008... The lack of new issuance in U.S. Structured Finance CDOs does not mean the CDO market is twiddling its thumbs. Legal battles, including disputes over cash flow allocations after an event of default (EOD), have sent both buy-siders and...

Ambac Plans Reinforce Market Skepticism.(AMBAC Financial Group Inc.)
March 10, 2008... The ABS market reacted to Ambac Financial Group's $1.5 billion common stock and equity offering last week with disappointment. The bank consortium bailout that market participants had been expecting fell short, sources said. It certainly...

CDO Deal Finances Park for Kids.
March 10, 2008... CDOs are on track to see a decline in issuance for the first time in six years. However, one small deal managed to get done. The proceeds of the deal will be used to build an interactive park in Puerto Rico aimed at teaching kids the benefits...

The Spillover Effect: Will U.S.-Style Lawsuits Catch on in Europe?
March 10, 2008... As litigations related to ABS losses mount in the U.S., European investors are beginning to show signs of similar uneasiness. This has prompted an increasing number of U.K. law firms to consider the possibility of bringing a number of...

Barney's Workout Plan Draws Criticism: Changing the servicing rules midstream will further turn away RMBS investors.
March 10, 2008... In Capitol Hill's rush to aid borrowers and stem the tide of foreclosures, are investors being thrown under the bus? Many industry participants have been wary of Congress meddling too much in a market recovery plan, so it's probably no...

MBA Reports Increase in 4Q07 Delinquencies and Foreclosures.
March 10, 2008... The Mortgage Bankers Association (MBA) came out with its quarterly fourth quarter National Delinquency Survey results last Thursday. According to the report, seasonally adjusted delinquencies rose to 5.82% from 5.59% in 3Q07, and are up 87...

Fannie and Freddie Losses Raise Questions.(Financial report)
March 10, 2008... When Fannie Mae and Freddie Mac had their portfolio caps raised on March 1, it appeared to be a much needed shot in the arm for the moribund housing market. However, after both GSEs announced significant fourth quarter losses, the industry...

NAR Advocates for Higher GSE Loan Limits.
March 10, 2008... In a testimony last Thursday before the Committee on Banking, Housing and Urban Affairs, National Association of Realtors' Public Policy Chair Vincent Malta argued that the national GSE conforming loan limit should be permanently raised to...

Mortgage Market's Mantra is Risk Aversion.
March 10, 2008... Volume in the first half of last week was running about average in MBS in two-way flows. In general, hedge funds continued to de-leverage and were actively selling in 5s and 5.5s. Overseas buyers, money managers and real money investors...

FHLMC Reports Fourth Quarter Home Price Changes.(Federal Home Loan Mortgage Corp.)(Financial report)
March 10, 2008... Freddie Mac released last week its quarterly Conventional Mortgage Home Price Index (CMHPI) for the fourth quarter. The classic series (which includes purchase and refinance transactions) recorded a 0.5% annualized decline in home values,...

Limited Refi Options Strain U.K. RMBS: A shutdown of U.K. mortgage lenders may constrain available financing programs for borrowers.
March 10, 2008... The U.K. mortgage market is predominantly a refinance market, with borrowers on average refinancing their loans every two to four years after the expiration of their teaser period. As lenders limit the number of their product offerings,...

Whispers.
March 24, 2008... The structured finance group at Standard & Poor's continues to adjust to layoffs announced earlier. According to people familiar with the rating agency, Russell Long, a managing director in the CDO group, will leave the company, along with a...

Is the End Anywhere in Sight?
March 24, 2008... When Standard & Poor's an-nounced that write-downs related to subprime losses might be nearing an end, it should have caused at least a brief rally in the market simply because good news has been so rare over the past months. However, it...

Whole Loan Sellers Seek Out Insurers.
March 24, 2008... Earlier this year, during an industry conference, representatives of Wilshire Credit Corp. were said to be scouting for capital partners willing to purchase whole loans, while giving it the servicing rights. Owned by Merrill Lynch, Wilshire...

Banks Stay Hopeful After 1Q Drops.
March 24, 2008... Two major investment banks, Lehman Brothers and Goldman Sachs, reported first-quarter earnings last week. While the two banks may have beaten analysts' estimates for the period's performance, both acknowledged significant RMBS losses and...

Market Waits for Govt. to Address Foreclosures: Fed news serves as balm for mortgage-backed investors even as Bear collapses.
March 24, 2008... Before the Asian markets opened last Monday, it was announced that JPMorgan will be buying Bear Stearns for $2 per share. The Federal Reserve was also expected to cut the discount rates once again and to implement a new lending facility for the...

Securitization Still a Word Northern Rock is Willing to Use.(Northern Rock PLC)
March 24, 2008... Northern Rock said last week that it plans to become a smaller, more focused mortgage and savings bank. However, it still intends to continue with its securitization business. The mortgage firm disclosed its plans to reduce staff by a...

Doubts Dog Bear's Structured LatAm Biz.
March 24, 2008... With Bear Stearns' fate far from determined, the future of the bank's Latin American structured finance business is likewise uncertain. At press time, however, it appeared to be business as usual. Bear is reportedly close to pricing an ABS...

Euro Market Sees ABS Activity.
March 24, 2008... Morgan Stanley and Royal Bank of Scotland are working on Bishopsgate Asset Finance Series 4, a corporate bond repack for Thames Water Utilities. The underlying collateral is expected to have a triple-B- plus rating, and the deal will be...

Holiday Week Brings Small Issuance Stream : Cards, autos and CMBS fill up pipeline before long weekend.
March 24, 2008... Last week started off promisingly enough. The Federal Reserve gifted the credit markets with a 75-basis-point rate cut and provided more liquidity in the form of the $200 billion term securities lending facility. Also, the industry absorbed...

Fed Steps in: Will the Govt. Bail Out Banks?
March 24, 2008... The Federal Reserve-orchestrated fire sale of Bear Stearns to JPMorgan Chase has forced the market to come face to face with the prospect of massive government bank bailouts, and of what it could mean to taxpayers. This stunning deal...

Thacher Proffitt Taps Into Distressed Asset Class.
March 24, 2008... With JPMorgan scooping up 85-year-old Bear Stearns last week for $2 per share, it is safe to say that deteriorating credit conditions and market jitters continue to hack away at the U.S. economy. Taking advantage of the current situation is...

REIT TruPS CDOs Gone, Banks Put on Hold.
March 24, 2008... Banks and insurance companies that issue trust preferred securities are now highly sensitive to financial institution risk and have acquired a distaste for the CDO structure, which has pooled these securities. As a result, issuance in U.S....

Whispers.
March 31, 2008... RBS Greenwich Capital has shed more than 15 capital markets professionals in the last week, according to people familiar with the bank. Among those who exited the firm were Jesse Litvak, a bond trader who joined the company in 1997, and Morris...

Tough Realities Soften to Optimism for ABS.
March 31, 2008... At the outset of 2008, Fitch Ratings analysts enumerated several reasons why the auto industry needed to keep a vigilant watch over unemployment rates. Not much has changed in the unemployment rate, yet Fitch analysts now seem to have a much...

Once Again, Consumer ABS Assets Fill Pipeline: Last full week in 1Q08 ends with card, auto and a SLABS deal abroad.
March 31, 2008... The primary ABS issuance market did not see a ton of issuance last week: An auto ABS and a couple of modestly sized credit card deals were the highlights. Some market sources acknowledged a slight pickup in activity toward the end of the...

SFA Bets on Troubled Second Homes.
March 31, 2008... Structured Finance Advisors, a longtime investor in the mortgage- and asset-backed securities industry, is preparing to launch a short-sale fund that will take a different approach to investing in distressed mortgage assets. Literally...

March Remits: A Glimmer Of Hope?
March 31, 2008... After a brutal market downturn of almost unprecedented proportions, the rate of credit deterioration finally slowed in February. However, analysts still warn that the silver lining is likely owed more to the calendar than to any true sign...

CDX Series 10 Spreads Tighter on Roll.
March 31, 2008... The tenth series of the North American Investment Grade CDX index (CDX.NA.IG.10) launched into a slightly rosier-than-expected market last week. Spreads, which had climbed to roughly 200 basis points in the series nine, according to...

Citigroup Leads Write-down List.
March 31, 2008... Bank write-downs are expected to total approximately $37.4 billion for 1Q08, according to a research note from Meredith Whitney at Oppenheimer & Co. The bulk of the write-downs would occur at Citigroup, which is expected to take a loss of...

No Promise of Spring Revival for Euro Deal Flow: With the exception of a few deals, the European market is still basically moribund.
March 31, 2008... The season might be changing, but it won't be enough to lighten the heavy mood that has held the European primary market deal flow at a standstill for much of the year. Apart from a trickle of auto deals, the transactions have been either...

Mitchells & Butlers Hit with Cash Troubles.
March 31, 2008... Lehman Brothers slashed its target price for Mitchells & Butlers to 235 pence from 450, causing an almost 17% drop in the company's value. While the situation might spell trouble for shareholders, analysts said that the results on the...

Spanish Law Becomes More Investor Friendly.(Bank of Spain)(securitization law )
March 31, 2008... The Bank of Spain moved closer to implementing amendments to its existing securitization law of 1981. The changes have been in the works for the last two years and started getting finalized at the end of 2007. Last week the bank entered the...

Aussie Bank Launches MiraStar.
March 31, 2008... The market for mortgage finance might be at a standstill in the U.S. and thawing in Europe, but Australian loan originators have a new source of financing, if indirectly, in the form of the National Australia Bank (NAB). One of Australia's...

Monoline Crisis Doesn't Spell End of Wraps in Emerging Markets: But Business Will Be Sporadic at Best in 08.
March 31, 2008... With the mood in the markets still dour and leading bond insurers declaring structured finance off-limits for either six months or until further notice, it may seem premature to canvass the monolines on where they stand right now in respect to...

REITs See Options in Market Troubles: REITs still stand and multiply despite dismal real estate conditions.
March 31, 2008... The real estate industry has become a dirty word over the past nine months or so. However, real estate investment trusts (REITs) are standing their ground despite the mortgage market's liquidity fears, with new companies looking to enter the...

Some Signs of Mortgage Market Stabilization Appear.
March 31, 2008... Mortgage-backed volume was running below normal in the first half of the week with flows relatively balanced. MBS spreads widened on Monday as Treasurys gave up more of their flight to quality premium. In general, overseas investors showed...