Asset Securitization Report articles from November 2003

Asset Securitization Report archives from November 2003

Whispers.
November 3, 2003... Barclays Capital recently hired Elizabeth Shen as an associate in its Asset Securitization group, where she will focus on analytics and structuring of multiple asset classes for pools acquired in the whole loan market. Shen, who reports to...

CompuCredit plans $130 million re-securitization of FMT 1998-2.
November 3, 2003... Fifteen months after acquiring the receivables of the Fingerhut Master Trust series 1998-2, CompuCredit Corp. plans to securitize roughly $130 million of liquidating accounts in a private transaction seen pricing in mid-November, sources said....

Mexico proves that length matters.
November 3, 2003... The Mexican government termed out its domestic debt last week with the inaugural issue of a 20-year fixed-rate treasury. Despite a timid debut at Ps1 billion (US$90 million), the deal rippled into every corner of the structured market. "It's a...

Italian court ruling may blur lease ABS.
November 3, 2003... A new court ruling issued last week on the repossession of a lease asset may add some pressure to the popular Italian lease securitization structure. Opinions vary on the extent of damage, but industry players are treading lightly,...

Liquidity support: A-2 + A-2 = A-1?(Brief Article)
November 3, 2003... Last week in Japan, Standard & Poor's introduced its joint probability approach to bank liquidity support for ABCP conduits, allowing a duo of A-2' or A-3' rated Japanese banks to provide liquidity support at the A-1' level. U.S. market...

FASB prepping draft of modified FIN 46.(Brief Article)
November 3, 2003... At last Wednesday's meeting, the Financial Accounting Standards Board reaffirmed that it would issue an exposure draft of the proposed modifications to FIN 46, though the board did not give an exact date for the release. For early...

ABS primary slows to $8.8 billion.
November 3, 2003... The U.S. ABS primary market slowed to roughly half of the previous week, pricing $8.8 billion of new-issue supply. With scant auto loan and credit card ABS making the rounds, the focus returned to the mortgage sectors of the market, which...

Trinity prices rare railcar lease ABS to strong demand.
November 3, 2003... Trinity Industries Inc. priced its first-ever railcar lease securitization last week, a $177 million series 2003-1 transaction through the sole lead of Credit Suisse First Boston. Offered in the 144A market, the fixed-rate single-tranche...

GE skips the tricks at S&P Hot Topic Conference.
November 3, 2003... NEW YORK - GE Facilities Finance, an operating subsidiary of GE Commercial Finance, scored star billing at last week's Hot Topics seminar hosted by Standard & Poor's. GEFF was the primary originator for this year's $400 million GE Business Loan...

Down with CDR pricing? Investors migrate to individual' models.
November 3, 2003... It appears CDO investors have moved in larger numbers toward a newer method for analyzing collateral - at least for high yield and leverage loan CDOs. While investment banks have been doing it a bit differently for some time now, investors...

S&P new assets seminar draws 200.
November 3, 2003... Market players can expect the pace to pick up on esoteric assets like intellectual property and insurance, by the indications at Standard & Poor's Third Annual New Assets Hot Topics Halloween Conference in New York last week. Analysts presented...

Fitch recaps 3Q03, optimistic for 4Q03.
November 3, 2003... While ratings migrations for the third quarter of 2003 lacked much positive news, the outlook is decidedly positive, noted analysts on a quarterly review conference call hosted by Fitch Ratings last week. There were zero upgrades in the...

Fleet to BofA a positive for CCABS.(Brief Article)
November 3, 2003... Bank of America's acquisition of FleetBoston Financial will have no impact on the recent purchase of Circuit City's First North American National Bank Visa/MasterCard portfolio, analysts said. In fact, BofA's role as advisor in the FNANB...

Technical close-up proposed changes to FIN 46A roundup of last week's FASB meeting, courtesy of Ernst & Young's On-Call Advisory Services group.
November 3, 2003... The Board made the following decisions with regard to the FIN 46 Amendment at its October 29, 2003 meeting: *1 If an initially consolidated VIE is a "business," as defined in EITF 98-3, Determining Whether a Nonmonetary Transaction...

Mortgages respond favorably to Fed language.
November 3, 2003... Mortgage flows started off on the quiet side last week as the market waited for the Fed's economic commentary. Activity picked up shortly after, as the market rallied on the favorable wording: "policy accommodation can be maintained for a...

Analysts take a second look at the new GNMA II program.
November 3, 2003... It has been three months since the new GNMA II program took effect and analysts are starting to look at relative value comparisons to GNMA Is. Both JPMorgan Securities and UBS released recent studies on the subject. Under the GNMA II...

Lenders present the case against MSRs.
November 3, 2003... At the recent Mortgage Bankers Association annual convention, lenders warned that mortgage servicing rights are a key threat facing the industry. In his presentation, Marito Domingo, executive vice president at Washington Mutual, made a...

Moody's talks Euro ABCP at latest industry conference.
November 3, 2003... As the European commercial paper market obtains a better picture of developing regulatory changes, the mood is relatively positive, since the Basle guidelines and other developments seem to emphasize the harmonization of the European markets....

Some NPL seeds sown for securitization prospects in China.
November 3, 2003... China has been an area of constant debate for the securitization industry, mainly because of its size and its growing economic and business potential. There have been securitization deals from China, says Fitch Ratings, but these have been...

Hong Kong securitizes taxi and bus hire purchase loans plus mortgages.
November 3, 2003... HSBC has been involved in a groundbreaking deal - the first ABS synthetic transaction originated in Hong Kong that securitizes a portfolio of taxi and public light-bus hire purchase loans. The loans were also originated by HSBC. There have...

Europe eases into November, RMBS trickles off.
November 3, 2003... The whirlwind of RMBS deals bombarding the European market over the past several months may soon start to trickle off, as industry players prepare to close the books on 2003. There are plenty of deals, however, to keep players busy for the next...

European Securitization Forum marks its third year in the market.
November 3, 2003... The European Securitization Forum (ESF) opened its office doors in Europe three years ago and since has seen the European securitization market expand from E78 billion (US$90 billion) in 2000 to E157 billion (US$182 billion) in 2002. And there...

Megabono II prices sweetly.(Brief Article)
November 3, 2003... Faced with sparse alternatives, Argentine investors flocked to Megabono II, the latest consumer deal from Compania Inversora Bursatil and Banco de Valores, which closed Oct. 30. The stampede squeezed the yield on the senior piece to 7.9% from...

Telecoms trouble comes ringing for Peru.
November 3, 2003... Moody's Investors Service knocked a telecom securitization from Peru down two pegs to Baa3' last week. Telefonica del Peru Grantor Trust had already dropped a couple of rungs from A1', where it stood at close in December 1998. Backed with flows...

Correction.(Correction Notice)
November 3, 2003... In the 10/27/03 issue, ASR reported that Dominion Bond Rating Service Ltd. received NRSRO status from the SEC last month. We should have reported that Dominion was added to the NAIC list of NRSROs in October. DBRS had already received the SEC...

Whispers.
November 10, 2003... Boutique ABS underwriter Westwood Capital LLC has hired Andrea Kutscher as an executive vice president, responsible for structured finance, project finance and mergers and acquisitions. Prior to Westwood, Kutscher spent 13 years at Prudential...

Risk-based capital in the limelight again.
November 10, 2003... It was an interesting week in securitization accounting, to say the least. The Financial Accounting Standards Board released the proposed modifications to Financial Interpretation No. 46 - a relative non-event given the content, though...

Hong Kong ABS plans shaping up.
November 10, 2003... After a quiet 2003, things seem to be heating up for the Hong Kong securitization market, and some expect a few new deals to emerge before the end of the year. What had people talking last week, though, was the confirmation from the Hong...

Bids in for DVI servicing rights.
November 10, 2003... Third-party bids to take over the servicing platform of bankrupt equipment leasing firm DVI Inc. have been submitted and, as of press time, were being reviewed by DIP provider Goldman Sachs. Meanwhile, as DVI fought to retain the servicing...

Proposed modifications viewed as non-event.
November 10, 2003... Last week the Financial Accounting Standards Board released its modifications to Financial Interpretation No. 46, a much-anticipated draft, though very little has changed for securitization, industry professionals said. As anticipated, the...

CDO managers to argue for zero trading restrictions?
November 10, 2003... On Thursday the Emerging Issues Task Force will discuss whether - or, perhaps, to what extent - CDOs with trading constraints should be eligible for sale treatment under existing Financial Accounting Standard 140, assuming the CDO is not...

Auto ABS in 4Q03 push dominates primary market.
November 10, 2003... The U.S. ABS primary market sprang back to life last week, following two comparably slow weeks of issuance. New-issue supply in the market totaled over $19 billion, with $13 billion having priced as of Thursday's market close, with the...

Structuring synthetic resecuritization CDOs goes down to the definitions.
November 10, 2003... Synthetic resecuritizations were issued in the domestic market in larger numbers this year that ever before. However, the models are so fresh they haven't exactly been reconciled with ISDA credit event definations. First blipping on the...

Study measures recoveries on defaulted deals.
November 10, 2003... Because defaults in ABS tend to be relatively recent, there is still a lot of uncertainty about the recovery characteristics, Standard & Poor's said in new study titled "Recovery Proxies for Defaulted U.S. Structured Finance Securities." ...

NERA notching study summary.
November 10, 2003... In previous coverage of the notching study conducted by the National Economic Research Associates Inc. (see ASR 10/27/03), sources familiar with the drafts said, "There is something in this report that all parties can point to and be happy...

Rating agencies After nearly two years, NERA notching study finally done...
November 10, 2003... The long-awaited release of National Economic Research Associates' notching study ignited some controversy last week, with each rating agency anxious to put its own spin on the results. "Everybody pointed to what they thought were the best...

Quiet week holds spreads range-bound.
November 10, 2003... The mortgage market was not too active last week, as rich valuations and the wait for Friday's non-farm payrolls report stalled activity. Flows, however, were two-way. Originator selling averaged about $1 billion per day and was offset...

Freddie to bridge price gap vs. Fannie, say analysts.
November 10, 2003... Freddie Mac disclosed recently that to support Gold/Fannie Mae swaps, it will be selling FNMA passthroughs from its retained portfolio. The purpose of this move is to fund the purchase of Golds. Freddie will also be buying and selling other...

Fitch presents new RMBS model at midtown gathering.
November 10, 2003... Fitch Ratings' RMBS group introduced its new RMBS credit enhancement model last week, which facilitates regression analysis on three different sectors: prime, Alt-A and subprime pools. Through this new model, analysts are able to...

CMSA tailors operations in Europe.
November 10, 2003... The Commercial Mortgages Securities Association (CMSA) may grow its presence in Europe as the CMBS market takes shape. The industry organization began looking into European market practices more than three years ago, but limited supply had...

Italian lease issue in uproar, then quieted.
November 10, 2003... Standard & Poor's last week acknowledged its concern with an Italian Supreme Court ruling that permitted a liquidator to terminate performing translativo leases, though the rating agency is not planning to take immediate action on existing...

The week in Europe Permanent Financing to price GBP3.5 billion covered bond.
November 10, 2003... Deals continued to inundate the securitization market last week, with several transactions pricing. The pace is expected to ride the market through November. More CMBS deals were added to the pipeline along with what's expected to be the last...

French facelift to insolvency approach.
November 10, 2003... France is aiming to modify its existing insolvency law to grant secured creditors a stronger hand in distressed situations before the companies actually reach "formal" insolvency. If this is implemented, securitization activity in France could...

Poland approaching new legislation.
November 10, 2003... Polish legislatures inched closer to a consensus on specific rules for tailor-made securitizations. A final set of rules could prove to be a boon to the market, a source said. So far this year, the country's first domestic securitization...

Whispers.
November 17, 2003... Financial Security Assurance has named Richard Holzinger managing director of U.S. corporate finance, which encompasses the business of sureties for consumer finance, CDOs, residential mortgages and structured finance transactions. He succeeds...

CSFB shops around Mexico MBS.
November 17, 2003... The stage is set in Mexico for a deal that might prove to be the curtain raiser for a lively MBS market in 2004. Sole lead Credit Suisse First Boston was roadshowing the transaction last week and pricing is anticipated for the first week of...

Technicals still the story in mortgages.
November 17, 2003... The lack of supply in mortgages continues to push rich valuations to even richer levels. As the end of the year approaches, there is a precedent for spread widening, with investors propping up their balance sheets. The week was...

U.S. upholds its Super-size' mantra.
November 17, 2003... U.S. investors gobbled up $4.6 billion in U.K. mortgages last week, with demand high enough to support upsizing the dollar-denominated tranches almost $1 billion from the original amount. Prime collateral, originated by Halifax Plc, fueled...

No relief in sight for CDO managers.
November 17, 2003... Last week the Financial Accounting Standards Board reaffirmed its stance that VIE decision-maker fees - with the exception of meeting a stringent set of criteria - will be included in the FIN 46 expected residual return analysis. This FASB...

Home equity subs still a Street favorite.
November 17, 2003... Despite significant tightening over last few weeks, many banks still see relative value in subordinate and mezzanine home equity ABS. According to Morgan Stanley, secondary market triple-B home equity bonds tightened as much as 70 basis...

A Ford deal would still fly out the door'.
November 17, 2003... Ford Motor Co.'s unsecured corporate debt actually tightened on the news that Standard & Poor's downgraded it to BBB-'. According to bank analysts, removing Ford from negative watch was more significant than the downgrade, as it wiped out the...

GE/HPSC merger.(GE Healthcare Financial Services)(Brief Article)
November 17, 2003... HPSC Inc. and GE Healthcare Financial Services last week announced that GE would acquire HPSC for about $72 million in an all-stock transaction, working out to $14.50 per share, according to an 8-K filed with the Securities and Exchange...

Agencies close out 2003 with new products.
November 17, 2003... Standard & Poor's unveiled a new methodology to assess the risk of loss to investors in synthetic CDOs last week. The announcement came at the agency's CDO conference, which drew more than 400 attendees. The so-called "drill down"...

Slow start but promising week for ABS.
November 17, 2003... Last week's ABS market got off to a slow start, mainly due to the holiday-shortened week. About $7 billion in U.S. dollar ABS priced through Thursday, though $4.6 billion of that came from the king-sized Permanent Financing No. 3, Halifax Plc's...

Issuer Profile: Guess deal viewed as a model for IP sector Royalties just as sexy as those Claudia Schiffer ads.
November 17, 2003... Guess? Inc. is known for its sexy ads, which, over the years, featured models like Naomi Campbell and Claudia Schiffer. Earlier this year, the Los Angeles-based apparel company, which generally pursues trendy twentysomethings, showed it...

Fannie's declining portfolio growth reflects tightening spreads.
November 17, 2003... Fannie Mae's October operating results conveyed negative retained portfolio growth, which is indicative of decreasing purchase opportunities as the most recent refinance boom wanes, analysts said. However, there are some positive highlights,...

Greenwich says no to N.J. mortgages.
November 17, 2003... Last week, RBS Greenwich Capital announced that it will not purchase or provide financing for high-cost, covered, manufactured housing, or certain refinance loans originated in New Jersey on or after Nov. 27 unless the state's soon-to-be...

Preserving economics amid predatory lending risk.
November 17, 2003... In a report last week, Fitch Ratings detailed an alternative to increased credit enhancement levels related to predatory-lending legislation risk. If an analysis of mortgage originators and underwriters shows strengths in their compliance...

Receivables funds draw the likes of Parmalat and Braskem.
November 17, 2003... Word has spread fast about credit receivable funds (FIDCs) in Brazil's domestic market, and the newfangled vehicle has started to attract big players. Banco Santander and Banco Itau have teamed up to develop this structure for Braskem, a...

XL wraps second Central America deal in as many months.
November 17, 2003... XL Capital Assurance is getting cozy with Central America. After wrapping a bond backed by diversified payment rights (DPR) for Banco Cuscatlan, the guarantor is doing the same for El Salvador's Banco Agricola. Sized at US$60 million, the...

Supply still adding little pressure to European spreads Volumes in 1H of November exceed entire November 2002.
November 17, 2003... HBOS upsized its jumbo RMBS issue, Permanent Financing, last week, increasing the amount of sterling paper and U.S paper available (see related story, p. 10). The deal was upsized by GBP1 billion (US$ 1.6 billion) to GBP4.5 billion (US$7.5...

Greek market debuts RMBS deal.
November 17, 2003... Greek issuer Aspis Bank launched the first deal to be structured under the country's new securitization law introduced in June. While the E250 million (US$292 million) RMBS transaction is certain to catch the eye of investors looking to...

Covered bond expansion beyond its roots.
November 17, 2003... Further use of the covered bond structure is anticipated throughout Europe, and possibly in other markets as well, as financial institutions begin tackling the new capital risk accords under Basle II. Under the new guidelines, financial...

Whispers.
November 24, 2003... Bob D'Loren, CEO of boutique ABS underwriter UCC Capital, has been appointed to the Board of Directors of clothing manufacturer Candie's Inc. In August 2002, UCC led Candie's license agreement whole business securitization for Candie's. D'Loren...

U.S. Bank wins DVI servicing rights.
November 24, 2003... Amid a shroud of secrecy and following numerous delays, U.S. Bank N.A. has won the servicing rights for DVI Inc.'s deteriorating portfolio of medical equipment finance receivables. The announcement likely clears the way for the servicer event...

Temporary reprieve from Regulation D.
November 24, 2003... Until the Federal Reserve Board of Governors makes a formal determination and publishes it, the staff will not recommend enforcement action against any bank that sponsors and consolidates an ABCP conduit under FIN 46 and chooses not to treat...

AIG, Nomura and IFC link up: Brazil yen/dollar swap brings players together.
November 24, 2003... In what is being called a first for Brazilian future flows, American International Group (AIG) reportedly provided a cross-currency and interest rate swap to a yen transaction for Unibanco. Underwritten by Nomura Securities, the 25 billion...

CIFG staffed, capital infused, and licensed.
November 24, 2003... CDC IXIS Financial Guaranty (CIFG) will emerge a monoline to be reckoned with in 2004, having established licenses to provide insurance in roughly 28 U.S. jurisdictions within the last 45 days. Until now, the firm has been doing much of its...

Sallie Mae bails out student lender AMS.
November 24, 2003... Holders of Academic Management Services student loan ABS were bailed out from the recent troubles surrounding the name (see ASR 7/28/03), following the closing of its acquisition by Sallie Mae last week. Sallie Mae is expected to pay down the...

Demand for paper keeps ABCP churning.
November 24, 2003... Volume in the ABCP market has hovered steadily in the $725 billion range by the Federal Reserve's count, down from last November's $740 billion area. Most players don't see a whole lot of growth over the next month or so - contrary to the...

Monster $25 billion ABS week ahead of Thanksgiving.
November 24, 2003... New-issue ABS supply picked up last week, ahead of the Thanksgiving holiday and the three-day trading week that accompanies it. Roughly $25 billion was marketed last week, primarily in the form of large home equity deals, although there were...

CDO chatter: Sizeable deals marketing.
November 24, 2003... The CDO market was ripe with activity last week. Reportedly about $325 million in size, CREST 2003-2 is a static cash flow CDO with Wachovia Securities and Deutsche Bank as co-leads on the A and B class notes. According to sources,...

The franchise curse dirties Falcon's wings.
November 24, 2003... Just as the rate of ABS downgrades is beginning to notably decline, the first dealership franchise-backed transaction - the last remnant of a once-thriving sector of the market - has succumbed to the franchise curse. In fact, the issuer, Falcon...

Net Leases: Demand increases, market supply limited.
November 24, 2003... By W. Kyle Gore, managing director, structured finance group at Legg Mason Wood Walker Inc. There is arguably more debt and equity capital pursuing net leased property investment opportunities and investment grade CTLs now than there has...

MBS Recap: Strong selling from originators and investors.
November 24, 2003... Mortgage spreads moved out last week as a result of strong selling from both sides of the fence. Mortgage bankers averaged between $1.5 billion and $2 billion per day compared with about $500 million in the previous week. The increase came in...

Refinements in Standard & Poor's LEVELS and DACSS keep pace with fast-moving U.S. RMBS market.
November 24, 2003... By Terry Osterweil, Director, Scott Mason, Director, Michael Stock, Director, and Leslie Albergo, Director, of Standard & Poor's Ratings Services. The dynamics of the U.S. RMBS market are such that continual refinements and innovations to...

CIFG eyes DPRs on cross-border front: But domestic markets off the radar.
November 24, 2003... Confirming talk that Latin America is on the agenda, CDC IXIS Financial Guaranty (CIFG) managing director Jeremy Reifsnyder said the budding guarantor is looking at transactions in the region's future-flows sector, with a particular focus on...

In Mexican holiday season, it's the pipeline that's grown fat.
November 24, 2003... Celebrating a revolution that erupted in 1910, Mexicans have just come off a four-day weekend. This typically heralds the start of the end-of-year holiday season and market players either put off deals until next year or rev up their roadshows...

Volume surge sends encouraging signs for Euro ABCP.
November 24, 2003... This year, growth in the European ABCP market was primarily concentrated among existing conduit programs. This increase in volume, particularly in European commercial paper (ECP) issuance, has provided some encouraging signs for what's in store...

Euro ABS market slowing but still robust, with spreads holding.
November 24, 2003... It was another week of heightened activity in the European ABS market, although the pipeline for new deals is closing up as the year comes to an end. Pricing levels remain relatively decent, sources said, despite heavy issuance. The market...

India sees novel' auto loan deal.
November 24, 2003... India's ICICI Bank recently launched a novel auto loan deal sized at Rs8.35 billion (US$182 million). "This deal has been groundbreaking for India, primarily because it adopts a new structure that addresses investor concerns relating to...