Asset Securitization Report articles from November 2004

Asset Securitization Report archives from November 2004

Whispers.
November 1, 2004... MBNA Corp. chief financial officer Vernon Wright is tying up loose ends ahead of his scheduled Dec. 15, retirement date, after which he still plans to serve as an advisor with the firm, as well as remain on the MBNA America Bank board of...

GSE accounting, elections and minority homeownership dominate MBA.(Mortgage Bankers Association; government sponsored enterprise)
November 1, 2004... SAN FRANCISCO - With the more than 6,000 attendees flocking to San Francisco's Moscone Convention Center for the Mortgage Bankers Association's 91st Annual Conven-tion & Expo - which is by all accounts an attendance record - it's no wonder that...

Revolving B-note CDOs emerge.(collateralized debt obligations)
November 1, 2004... The pricing of CREST 2004-1 by Wachovia Securities last week was just the third CDO comprised of CMBS collateral - subordinate CMBS collateral that is - to ever hit the market. This innovative revolving structure, which debuted in late June,...

Triple-X deals leave ABS market panting.(asset backed securities)
November 1, 2004... Regulation Triple-X, the ruling that mandates how much cash reserve insurance companies must keep against their term life portfolios, has insurance carriers seeking reserve relief in the securitization market. At least two such transactions are...

Real Estate ABS stays in front, Metris welcomed with open arms.(asset backed securities)
November 1, 2004... The U.S. ABS primary market put up solid numbers last week, pricing upwards of $8 billion as of Thursday's market close, and close to $6 billion still making the rounds heading into Friday. For the second week running, the real estate...

CDO downgrades persist in 3Q04, but indicators positive.(collateralized debt obligations)
November 1, 2004... Analysts at Standard & Poor's found that the largest increase in CDO upgrades since 2002 occurred last quarter, but the news was tempered by a sizeable level of downgrade activity. However, the third quarter spelled good news, overall, for the...

Starwood Capital Group launches real estate securities group.(Brief Article)
November 1, 2004... Suffice it to say with growing interest in real estate investment trusts, including the bevy of mortgage lenders that converted to publicly traded REITs, 2004 will go down as the year the REIT industry went from niche to mainstream. Before the...

DebtX plans one of its largest loan sales this year.
November 1, 2004... Loan sale advisor DebtX is slated to hold a $57 million commercial loan sale on Nov. 16 for a regional bank located in the Midwest US, according to Kingsley Greenland, president, founder and CEO. The loan portfolio consists of 40 relationships,...

MBA forecasts strong purchase market.(Mortgage Bankers Association )
November 1, 2004... SAN FRANCISCO - At the Mortgage Bankers Association's 91st Annual Convention & Expo, economists forecasted only a modest rise in interest rates despite continued economic expansion. With rates staying at low levels, the purchase market is...

Originators debate immigrant lending opportunities.
November 1, 2004... SAN FRANCISCO - With the changing demographics in the U.S. - as the minority population increases in size and influence - mortgage lenders at the Mortgage Bankers Association's 91st Annual Convention & Expo held last week discussed ways to...

Ginnie Mae to launch excess yield securitization.(Brief Article)
November 1, 2004... SAN FRANCISCO - Ginnie Mae is set to roll out a program this December that will allow GNMA II issuers to securitize the excess servicing fees on their portfolios, said officials from the Agency at the Mortgage Bankers Association's 91st Annual...

Mortgage activity directional with rates.
November 1, 2004... The mantra in mortgages lately has been "directional with rates." And indeed, the market has tended to lag on rallies and lead on sell-offs. So this is how it was last week with relatively quiet trading early on as the 10-year hovered and broke...

Italy and Spain keep European RMBS investors busy.(Residential Mortgage-Backed Securities)
November 1, 2004... Italian deals attracted a lot of attention in Europe last week, as investors looked over the newly marketing 500 million ($637.5 million) tap issue for a railway project, scooped up a 193.3 million future flow transaction for a pharmaceutical...

More trouble for SCIP 2 as Fitch adds ratings watch negative.
November 1, 2004... SCIP 2, the Italian government deal backed by proceeds from an ongoing sale of public property, got a lukewarm response from analysts after releasing its latest investor report. Then Fitch Ratings followed up last week by putting all four...

Russia's first financial future flows prices, a new step for infant market.
November 1, 2004... Nudging along the nascent business of Russian future flows, Merrill Lynch led a $225 million, five-year final securitization of credit card receivables last week, the first market-based banking securitization from the country. The originator...

Mexico's Patrimonio makes market debut.(Brief Article)
November 1, 2004... The Mexican securitization industry witnessed two firsts last week. Originator Patrimonio and investment bank Multivalores closed a deal that was a debut in the sector for the both of them. Sized at Ps588 million ($51 million), the five-year...

Colombian investors knock back Bavaria deal.
November 1, 2004... Colombian brewery Bavaria served up a 10-year, Ps350 billion ($136 million) securitization of forward contracts last week to local investors. Led by Bogota-based shop Correval, the deal closed at 7.15% plus CPI. As Fitch Ratings affiliate Duff...

S&P offers note of confidence following summer hurricanes.(Brief Article)
November 1, 2004... Standard & Poor's issued a report last week on the minimal impact that recent hurricanes have had on future flow transactions in the Caribbean, Mexico and Central America. In the region, the agency rates deals backed by credit cards and...

Korea Air Lines sends out RFPs for second securitization.
November 1, 2004... Korea Air Lines (KAL), South Korea's largest air carrier and part of the Hanjin Group, has sent out RFPs for its second cross-border securitization, with bids due this week, according to a well placed source. The source added that the RFP...

Whispers.
November 8, 2004... Steve Bergantino recently joined Bear Stearns as a managing director in the MBS research group. Specifically, Bergantino will be using loan level data from various sources with a specific focus on Bear Stearns subsidiary EMC Mortgage Corp. For...

MBIA takes on third Mexican toll road: Other monolines seen following in peso market.(MBIA Assurance S.A.)
November 8, 2004... Surety provider MBIA seems to have quite an appetite for Mexico. After introducing the monoline guaranty into the peso market just over a year and half ago, the guarantor is now on its third domestic transaction. And that doesn't count its...

Fannie/Freddie role reversal continues.(Freddie Mac MBS )
November 8, 2004... Contrary to previous experience, Freddie Mac MBS are prepaying slower than their Fannie Mae counterparts, which is a phenomenon attributed to differences in Freddie's seller distribution compared to the composition last year. Over the...

After hiatus, SFA plans new CDO.(Collateralized debt obligations)
November 8, 2004... After a two and a half year hiatus, Structured Finance Advisors is plotting a return to the primary CDO market. The Farmington, Conn.-based asset manager is currently talking to underwriters about returning with a static-pool high-grade...

ASF maintains investor focus at upcoming conference.(American Securitization Forum )
November 8, 2004... The second annual Securitization Industry Conference, slated for Jan. 23 through 26, in Scottsdale, Arizona, will advance the overall mission of the American Securitization Forum to provide high-level, relevent and timely information as well as...

ABS primary issuance rallies after election.(Asset backed securities)
November 8, 2004... The primary U.S. ABS market appeared to be holding its breath along with the rest of the nation for the early part of last week, waiting on tenterhooks for the results of the presidential election to come in well into Wednesday afternoon....

New service provider explores ABS: Customers First outsourcing to India.(Asset backed securities)
November 8, 2004... Customers First Inc. has come a long way since its inception as a business outsourcing company last September, with a wide variety of today's clients spread across the hedge fund community as well as the asset-backed and mortgage-backed...

Student loan ABS unscathed by freeze on 9.5% loans.(Asset backed securities)
November 8, 2004... Amid the political frenzy that seized the nation and culminated on election day last week, some investors expressed concern over what impact a Republican-led initiative to halt the creation of student loans with 9.5% floor payments would have...

Election eve conference previews CDO market 2005.(Collateralized Debt Obligation )
November 8, 2004... NEW YORK - Packed with nearly 700 registrants the day before the presidential election, the process of politics was replicated at Standard & Poor's Annual Global CDO Conference held here last week. An audience participation panel provided an...

Market talking up new franchise ABS issuer.
November 8, 2004... A new issuer in the franchise sector is expected to enter the term ABS market possibly before year end, market sources said. The distressed sector has been rife with speculation over increased activity, but the talk has yielded little more...

Esoteric ABS issuance down in 2004.(Asset backed securities)
November 8, 2004... Some ABS new asset classes appear to be stalled at the moment, according to an unscientific poll conducted by ASR staff following Standard and Poor's fourth annual New Assets Hot Topics Conference held in New York last week. The conference...

MBS buyers emerge on Treasury sell-off.
November 8, 2004... Mortgages saw strong buying from insurance companies, money managers, hedge funds and banks last week as the Treasury market sold off. In addition, overseas accounts were active in Ginnies Maes. Preference was for up in coupon paper; however,...

Bear Stearns creates refinance desirability index.
November 8, 2004... As has been noted by many analysts, borrowers have been much less responsive to the level of rates recently. In a recent analysis, Bear Stearns researchers quantify the relative attractiveness of current mortgage rates by creating a Rate...

CMBS deals fill pipeline.(Commercial Mortgage Backed Securities )(Brief Article)
November 8, 2004... With seven conduit deals pricing over the month, October saw $8.7 billion in supply brought to the market. This compares to a 2004 monthly average of just over $6 billion and brings the year-to-date volume of conduit transactions to $60.3...

Impact of "affordability product" MBS growth.(Mortgage Backed Securities )
November 8, 2004... With the growing presence of non-traditional mortgage products, analysts are now studying the potential effects of these new entrants on the market as well as on borrower characteristics and behavior. Countrywide Securities, for instance,...

HBOs deal tightens spreads for U.K. RMBS sector.(Residential Mortgage-Backed Securities )
November 8, 2004... RMBS emerged as a major theme in last week's relatively sluggish European market, as several mortgage deals from the U.K., Portugal and Spain sought investors. Permanent Financing No. 6, a GBP3.87 billion equivalent deal from HBOs,...

New rules for Mexico sub-sovereign loans to stir ABS.
November 8, 2004... Mexican regulators are upping the provision requirements for bank lending to states and municipalities, a move bound to stimulate demand for the services of rating agencies, structuring agents and law firms, according to sources. "We're...

Turkey's Isbank hits S&P investment-grade in $500m DPR.(Standard & Poor)
November 8, 2004... Turkiye Is Bankasi (Isbank) has become the first Turkish bank to garner an underlying investment-grade rating from Standard & Poor's in the public market (see ASR 10/25/04). Led by Standard Chartered, the $500 million transaction is wrapped...

Citi, Merrill, Morgan Stanley queue up to strike Egyptian oil.
November 8, 2004... Egyptian General Petroleum Corp. has short-listed a group of banks for a potential structured transaction, according to a source familiar with the process. Citigroup Global Markets, Merrill Lynch and Morgan Stanley are among the shops expected...

Merry-go-round continues for Asian ABS pros.(Asset backed securities)
November 8, 2004... After a summer of hiring and firing by Asian securitization firms, one could reasonably expect things to settle down as the traditionally more active winter months kick in. That, however, is not the case as more migration is expected within the...

Delays on Korean CBOs as guarantors go cagey on SMEs.(small and medium sized enterprises, Collateralized Bond Obligation )
November 8, 2004... Two upcoming cross-border CBOs coming out of Korea and mandated this year have been tainted by recent heavy losses taken on primary CBOs involving small and medium sized enterprises (SMEs). The first offering from the US$1 billion program...

Whispers.
November 15, 2004... Robert Villani has joined Thacher Proffitt & Wood as a partner in its structured finance group. In addition to his legal background, Villani most recently worked in the structured finance originations group at JPMorgan Securities. His focus...

PG&E plans return to ABS market.
November 15, 2004... Pacific Gas & Electric Co., the electric utility company that was forced into a Chapter 11 bankruptcy in 2001, in the wake of the California energy crisis, is looking to bring its first stranded cost securitization in seven years to the market...

ATEL readies new vehicle.
November 15, 2004... Equipment leasing investment company ATEL Capital Group is ready to launch the latest iteration of its equity fund, ATEL Capital Equipment Fund XI, according to a recent S-1 filing with the Securities and Exchange Commission. The vehicle,...

XLCA moves into HELOC sector.(Home Equity Line Of Credit)
November 15, 2004... With its biggest push in the U.S. ABS market this year, monoline surety provider XLCA wrapped its first-ever HELOC offering last week, a $1 billion series 2004-Q offering from Countrywide Home Loans Inc. XLCA plans to be aggressive in the HELOC...

U.S primary market prices $5.2 billion, much left on tap.(asset backed securities)
November 15, 2004... The U.S. primary ABS market was relatively slow last week as the bond market took the day off on Thursday in observance of Veteran's Day. As of the market's close on Wednesday, total new issue volume was at roughly $5.2 billion but several...

Structured settlement ABS clear of legal snag.(asset backed securities)
November 15, 2004... The deal flow in structured settlements is expected to maintain a steady pace, and the market could see another public term transaction before year end, sources said. "[The rating agency] believes the number, frequency and size of issuance...

2004 proving a banner year for CDO product.
November 15, 2004... It's as if the holidays have come early for CDOs, with market constituents reporting outstanding levels of issuance both domestically and globally - and the year still has over a month to go. Merrill Lynch data shows that U.S. cash CDOs are...

The benefits of I.P. ABS.(Asset backed securities)(Intellectual property )
November 15, 2004... By Ron Borod, Esq., partner and the head of, the Structured Finance Group of Brown Rudnick Berlack Israels LLP Intellectual property securitization continues to be a hot item in the ABS zeitgeist. Although the volume of rated IP-backed...

Highlight in mortgage market is the collapse of FNMA 6 roll.(Federal National Mortgage Association)
November 15, 2004... Two-way flows were seen last week, with some profit taking following the previous week's strong performance by money managers, hedge funds and fast money. At the same time, insurance companies remained strong buyers. The big news in the MBS...

Is California real estate heading south?
November 15, 2004... With California's home prices showing disturbing signs of a late 1980s-like bubble, analysts are now looking at how regional weakness could affect valuations in the MBS market, specifically the jumbo sector. In a recent report, JPMorgan...

Moody's revisits CMBS historicals.
November 15, 2004... Moody's Investors Service last week released a report looking at the historical performance of loans backing CMBS deals. The highlights of the report include examining loan performance in terms of seasoning as well as city size. The rating...

How low can spreads go? Lusitano "shocks" some with new tights in slow primary.(Lusitano Mortgages )
November 15, 2004... The 1.2 billion ($1.5 billion) Portuguese RMBS deal Lusitano Mortgages No. 3 proved to be the talk of the European market last week, as its record tight spreads pulled in the secondary even further. The 5.7-year triple-As, totaling 1.14...

Destination still unknown for ex-Nomura chief Chau.(Chris Chau)
November 15, 2004... Despite widespread speculation linking Nomura Securities' departing head of non-Japan Asia securitization Chris Chau to the same role at HypoVereinsbank (see ASR 11/8/04), ASR now understands Chau will not be going there after all. Chau...

Whispers.
November 22, 2004... United Capital Markets has secured 1970's funk party band Earth Wind & Fire as the entertainment for IMN's ABS West 2005 conference scheduled for Feb. 7-10 in Phoenix Arizona. EW&F will perform Tuesday Feb. 8. The International Swaps and...

Hong Kong sees 1st negative equity MBS.
November 22, 2004... Hong Kong's Pan Asian Mortgage Company recently launched what is believed to be the world's first securitization of negative equity residential mortgages. South Africa's Standard Bank is arranging the HK$260 million issue ($33.5 million), its...

FASB may amend FIN 46 (R).
November 22, 2004... The Financial Accounting Standards Board recently offered a potential loophole appendix to FIN 46 for some in securitization markets with the proposal of FIN 46 (R)-b, the staff position for which may soon be released for a 45-day comment...

Moody's takes on CDO assumptions.(Moody)(Brief Article)
November 22, 2004... Since adjusting its excess spread assumptions earlier this year, several RMBS-backed CDOs have priced sans a rating from Moody's Investors Service. While in some cases market sources noted the lack of a Moody's rating created an arbitrage...

EITF 03-1 dampened as well?(Brief Article)
November 22, 2004... The issue of EITF 03-1 may not become much of an issue, at least for a while longer. In its most recent report, UBS said it appears EITF 03-1 has been delayed. The Financial Accounting Standards Board received a tremendous response during the...

U.S. primary market busy heading into holiday.
November 22, 2004... The U.S. primary ABS market came to life last week to price roughly $13 billion in a pre-holiday rush. Several deals were still making the rounds as of press time Thursday. Home equity volume surged to over $10 billion, more than double last...

Aircraft lease ABS avoids crash.
November 22, 2004... US Airways' recent decision to continue flying all but 36 of its 282-plane mainline fleet is good news for investors in pooled lease aircraft ABS. The legacy carrier is currently enmeshed in its second Chapter 11 bankruptcy filing in as...

Deluge of single tranche CDOs hit: Single name liquidity not always present.(Collateralized debt obligations)
November 22, 2004... Taking on corporate exposure through the credit derivatives market has become one strategy a growing number of CDO investors are embracing. Yet while the credit derivatives market continues expanding, how liquidity performs for single names is...

NYC's muni bonds faux ABS.(New York City)(asset backed securities)
November 22, 2004... The city of New York is selling $496.2 million in triple-A rated taxable muni bonds via the Fiscal Year 2005 Securitization Corp. vehicle, a one-off transaction for the city being led by Merrill Lynch. The bonds being issued are essentially...

Analysts see opportunity in wide triple-A HEL spreads.(asset backed securities)
November 22, 2004... The best opportunity in the ABS market can be found in the triple-A home equity sector as spreads have widened to the mid-30 basis point to Libor range. The trend to wider home equity spreads bucks the general tightening trend of other asset...

Steady grind tighter expected into year-end.(mortgage backed securities)
November 22, 2004... Mortgages saw steady two-way flows last week with interest coming from a wide range of investors including money managers, servicers, hedge funds, and overseas accounts. There was slightly better interest in moving down in coupon as a result of...

Announcement.
November 22, 2004... Due to a flurry of post-deadline submissions, ASR has extended the deadline for Deal of the Year nominations through Nov. 30, 2004. Qualifications for entry remain the same, with the exception of the transaction closing date, which has also...

Kmart, Sears to spike concentration in CMBS.(Sears Roebuck & Co.)(commercial mortgage backed securities)
November 22, 2004... Kmarts announcement last week that it is planning to buy Sears Roebuck & Co. - in a transaction valued at $11 billion - might result in increased collateral concentration as well as potential store closings. Both companies have a considerable...

Identifying varying risks within Alt-A MBS.(mortgage backed securities)
November 22, 2004... With the Alt-A market growing on the back of a strong lender push, analysts have been examining how to divvy up the market to more accurately assess risk. "Currently there is a lot of discussion about differences in the types of product...

More on Alt-As: Prepayments accelerate.
November 22, 2004... Bear Stearns stated Alt-A prepayments in the current environment appear somewhat more unpredictable compared to previous experience. Analysts report that this phenomenon might be the result of the recent spate of mortgage market product...

Conforming MBS limits nowhere to go but up.(mortgage backed securities)
November 22, 2004... With year end approaching, the GSEs are due to announce their conforming loan limit for 2005. Analysts explained that the maximum change in the limit - which the GSEs have fully utilized thus far - is determined by the October year-over-year...

Volkswagen enjoys the driver's seat on first deal via German TSI.
November 22, 2004... Volkswagen Bank is attracting a lot of fanfare as it launches a new securitization program that will mark several firsts for the European market. Volkswagen, the largest auto financing company in Germany, will securitize 1.1 billion of auto...

Merrill, Morgan Stanley, BNP strike $1bn gusher in Egypt.
November 22, 2004... While Latin America is certainly not dead when it comes to emerging-market securitizations (see Banistmo, p.18), there does appear to be a volume shift towards the East. The bulkiest deals this year have sprung from Russia and Turkey and now...

Titularizadora Colombiana completes fifth RMBS deal.(Brief Article)
November 22, 2004... Having completed its fifth RMBS last week, Titularizadora Colombiana has, to date, securitized slightly more than Ps3 trillion ($1.2 billion) in mortgages. Colombia's leading mortgage securitizer sold Ps370 billion in RMBS on Nov. 18, at an...

Panama's Banistmo to tap credit cards again in $270m deal.
November 22, 2004... Citigroup Global Markets is preparing to swipe through a sixth credit card-backed transaction for Panamanian originator Banco del Istmo (Banistmo). Sized at $270 million, the seven-year final transaction is expected to have closed Nov. 19,...

Some $950m worth of Turkey served up before Thanksgiving.
November 22, 2004... Turkiye Is Bankasi (Isbank) priced last week the first public Turkish deal to earn an underlying investment-grade rating from Standard & Poor's. Led by Standard Chartered, the $500 million transaction was split down the middle between...

Whispers.
November 29, 2004... New York Attorney General Elliott Spitzer has turned his sights on the financial insurance business, as Swiss RE and MBIA were issued subpoenas from both the Attorney General's office as well as the Securities and Exchange Commission....

Euro CMBS study looks to mitigate workout fees.(Commercial Mortgage-Backed Securities)
November 29, 2004... European CMBS issuers need to reconsider how they structure workout fees into their deals, according to Standard & Poor's analysts, who recently cautioned investors about the potential for these fees to disrupt payments even for senior...

CDO spreads clearing record tights.(Brief Article)
November 29, 2004... The second CDO from Texas-based hedge fund manager HBK Investments priced to yield the tightest visible print on a senior triple-A structured finance CDO class to date at 27 basis points over three-month Libor, sources said. The $450...

KFB launches largest Asian securitization.
November 29, 2004... Korea First Bank is hitting the market for the third time this year with what will be the largest securitization ever from non-Japan Asia, as BNP Paribas, Calyon and Royal Bank of Scotland are joint arrangers on the 550 million ($717.5 million)...

Transamerica Marine sale may lead to new container-lease ABS issuer.
November 29, 2004... Aegon NV's recent sale of Transamerica Maritime Containers - a prominent maritime container lessor - could point to a new issuer in intermodal ABS, sources said. The company was recently acquired by New York-based private equity firm the...

Primary market preps for holiday.
November 29, 2004... The U.S. ABS market was reasonably active during the short week preceding the Thanksgiving holiday. Close to $3.5 billion was priced during the two days leading up to the mass exodus to the suburbs on Wednesday. Sources expect another two weeks...

Accredited caps off banner year with largest deal ever.(Brief Article)
November 29, 2004... Accredited Home Lenders, the San Diego-based nonprime mortgage lender, closed its final securitization of first lien mortgage loans last week, a $1 billion securitization that will be its final deal in a year that saw the company shatter its...

Citigroup examines HEL losses as appreciation slows.
November 29, 2004... To examine the possible effects of a slowdown in home price appreciation, Citigroup Global Markets researchers recently studied a sample portfolio consisting of 75% 2/28 hybrids and 25% fixed rate MBS, with home price appreciation in 2.5%...

Japanese CDO market taps SME collateral.
November 29, 2004... At least two CDOs backed by SME collateral priced in Japan's CDO market last quarter, leading to anticipation that SME CLOs will be the busiest area of issuance for this growing Asian market place. In addition to other deals, Wakaba Co....

Deutsche Bank builds life insurance portfolio for term deal.
November 29, 2004... Deutsche Bank Securities Inc. is reportedly near closing a deal with Dallas-based Lift Financial backed by life insurance policies, according to market sources. The deal would likely be closed on DBSI's balance sheet and held to aggregate...