Asset Securitization Report articles from November 2005

Asset Securitization Report archives from November 2005

Whispers.(Appointments and Retirements)
November 7, 2005... Banc of America Securities hired Paula Dominick as managing director and global head of debt research, reporting to Tom Berkery, COO of global markets, and is responsible for managing high-yield, investment grade and credit strategy research....

New Century plans little-to-no ABS in 4Q05.
November 7, 2005... New Century Financial Corp. does not intend to issue a securitization from its REIT portfolio during the quarter, Brad Morrice, the company's president and chief operating officer said last week during the lender's third quarter earnings...

Housing players rip tax reform.
November 7, 2005... With proposed tax changes from President George W. Bush's advisory Tax Reform Panel considered detrimental to the housing market, MBS market participants are now up in arms and hindering the implementation of the suggested changes. ...

Despite jitters, credit cards OK.
November 7, 2005... As participants in the credit card ABS market anxiously watch trust performance in the wake of the recently enacted bankruptcy reform, several credit card issuers have given guidance on where they think charge-offs are headed. For now, the...

New York legal group critiques FASB proposal.(Financial Accounting Standards Board)
November 7, 2005... The Structured Finance Committee of The Association of the Bar of the City of New York submitted a comment letter last week regarding proposed amendments to a Financial Accounting Standards Board rule on transfers of financial assets. The...

Low SUV demand may spur auto loss severities.
November 7, 2005... Loss severities in auto deals with high concentrations of trucks and SUVs could soon rise if demand for those vehicles continues weakening, according to Fitch Ratings analysts. In fact, recovery rates on defaulted truck and SUV loans are...

$13 billion in new issues for ABS primary.(asset backed securities)
November 7, 2005... For the third week in a row, the U.S. ABS primary market has generated around $13 billion in new issues, as the market seems to have hit a robust autumn issuance pace. UBS brought the week's largest pricing, with a $1.25 billion home...

PG&E in market with RRB Round II.
November 7, 2005... San Francisco-based Pacific Gas & Electric Co. last week priced its second rate reduction transaction of the year, an $845 million offering via Barclays Capital, Citigroup Global Markets and Morgan Stanley as joint-lead underwriters. The deal...

Aames is back in whole-loan business.
November 7, 2005... Following a nearly one-year hiatus, Aames Investment Corp. will resume selling the majority of its mortgage originations to the secondary whole-loan market. The Los Angeles-based subprime mortgage lender last November reorganized under a REIT...

Delphi loan helps keep spread tests above water for CLO managers.
November 7, 2005... In this era of ultra-tight spreads, a first lien loan with a 650 basis point over Libor coupon is like a diamond in the rough. This is why Delphi Corp.'s $1 billion term loan - which not only priced at Libor plus 650 basis points, but it was...

Fitch beefs up synthetic CDO manager ratings.
November 7, 2005... Fitch Ratings is in the process of changing its collateralized debt obligation asset manager rating approach, otherwise known as CAM, to incorporate synthetic CDO asset managers, the rating agency announced last week. The move comes as a result...

Who let the CRE CDO issuers out?(Collateralized debt obligations)(commercial real estate)(JER Investors Trust Inc.)
November 7, 2005... Another first-time commercial real estate CDO issuer has come to the market, with a $416 million deal expected to close Nov. 10. JER Investors Trust Inc., a publicly traded REIT, primarily buys and originates commercial mortgage-backed...

Servicer selling and higher fear rates weigh on MBS market.(Mortgage backed securities)
November 7, 2005... Mortgages struggled again last week despite significant cheapening in the last few weeks. In addition to the rate levels bringing servicer selling and extension risk into the equation, the sector is suffering under strong supply, full dealer...

Freddie reports strong cash-out refis in 3Q05.(Brief Article)
November 7, 2005... Freddie Mac reported that during the third quarter of 2005, 72% of Freddie-owned loans were refinanced into new mortgages with loan amounts that were at least 5% more than the original loan balances. While this percentage is unchanged from the...

After meeting capital requirements, Fannie Mae not out of woods yet.(Federal National Mortgage Association)
November 7, 2005... Last week, the Office of Federal Housing Enterprise Oversight announced that Fannie Mae has met its Sept. 30 deadline to reach the required 30% capital surplus target. Now the next question becomes: What will Fannie Mae do next? David...

MBA Refinace Index slips.(Mortgage Bankers Association )(Brief Article)
November 7, 2005... As expected, mortgage application activity declined last week as mortgage rates moved higher. The Mortgage Bankers Association reported that its Refinance Index was off 3% to 1863 while the Purchase Index fell 6% to 438. Despite the decline in...

Securitization a mainstay for EU governments.(European Union)
November 7, 2005... European statistical office Eurostat, said last month that it was in the process of revising its ESA95, the accounting criteria for government related securitizations. But even with the possibility of adapting to more stringent criteria,...

CLOs, CLOs and more CLOs in European lineup.(Collateralized Loan Obligation)
November 7, 2005... CLOs continue filling the European new issue pipeline - a trend that industry players say is likely to continue until year-end. La Caixa is working on a 656.5 million ($787.4 million) CLO backed by SME loans. Dubbed Foncaixa FTGENCAT 3, the...

U.K. property valuations turn into risky business.(United Kingdom)
November 7, 2005... The U.K. government last week announced a draft law for the introduction of home information packs that could lead to increased risk in the housing market for buyers and lenders as well as investors in RMBS deals, reported analysts at Fitch...

Changes prompt Fitch U.K. care home sector update.(United Kingdom)
November 7, 2005... Fitch Ratings published an update on U.K. care home deals last week after a two-year lull, reporting that both operating conditions and the performance of these securitizations have improved. Over the last two years this industry has undergone...

Possible XLCA-wrapped Mexican road deal comes into focus.(XL Capital Assurance)
November 7, 2005... More details have surfaced on a transaction that could herald XL Capital's debut as a guarantor in Mexico's domestic market (see ASR 10/31/05, p.4). In its current preliminary form, the deal is a Ps550 million ($51 million), 22-year bond backed...

-ST_BY-.(collapsed bridge )
November 7, 2005... Stormy weather injects drama into Mexican toll-road deals While new players merge into Mexico's toll road sector (see related story), the ride's been a little bumpy for a few existing projects, with severe weather to blame in a couple of...

Thai Government launches first ABS.(Asset backed securities)
November 7, 2005... The Government of Thailand last week held roadshows in Bangkok for its debut securitization, which will help fund construction of a huge office complex set to house several state departments in the Chaeng Wattana district of the capital. ...

Whispers.(Federal National Mortgage Association appoints Robert Blakely as chief financial officer and Robert Levin as chief business officer)(Jeff Salmon resigns from Barclays Capital Inc.)(Baker and McKenzie appoints Jonathan Walsh, Vincent Keaveny, Simon Porter and Bruce Somer as partners)
November 14, 2005... Fannie Mae's Board of Directors appointed Robert Blakely as its new CFO, the company announced, as well as disclosing a number of key personnel changes. Blakely joins from MCI, where he served as executive vice president and CFO since April...

PMI paves way for mortgage insurance across Europe.(PMI Europe)(basel rules for regulating mortgage insurance )
November 14, 2005... While the concept of mortgage insurance has remained relatively unknown in Europe, PMI Europe - which set up shop some three years ago - is hoping to change that. Earlier this year the group appointed Christian Pierotti (see ASR 6/11/05)...

NovaStar expects more impairments.(Novastar Financial Inc.)
November 14, 2005... NovaStar Financial CFO Greg Metz said last week the "volatile mortgage environment" is expected to cause a portion of the subprime mortgage lender's subordinated securities to become permanently impaired. That scenario is more likely to be...

China gears up for year-end rally.(market for collateralized debt obligations and mortgage backed securities)
November 14, 2005... Issuance from Asia has been fairly quiet of late, but behind the scenes deal makers are busily putting the final touches on a series of high profile offerings out of China, Korea, Malaysia and Hong Kong. Most of the focus is on China and...

AmeriCredit aims higher with Bay View acquisition: Bay View plans one more term deal before year-end.
November 14, 2005... Independent finance company AmeriCredit Corp. took a step into the prime lending world last week with the announcement that it would purchase Bay View Acceptance Corp., a prime and specialized auto loan originator. The acquisition,...

U.S. ABS primary hosts nearly $20 billion in holiday-shortened week.(asset backed securities)
November 14, 2005... The U.S. ABS primary market swelled to roughly $20 billion with only four full days of issuance due to the Veteran's Day holiday. The biggest student deal of the week to make it to pricing was a $1.9 billion student loan deal from Nelnet...

J.G. Wentworth issues annual structured settlement deal.(fifth private Rule 144A deal)(Brief Article)
November 14, 2005... In what has come to be an annual event, J.G. Wentworth, a Bryn Mawr, Pa.-based specialty finance company, has issued its fifth private Rule 144A deal backed by structured settlement obligations in five years. The $227 million deal, tagged 321...

SBA Communications hits incipient cellular tower sector.(Mortgage backed securities)
November 14, 2005... First time issuer SBA Communications Corp. has a $405 million securitization in the market, led by Lehman Brothers, which is expected to close by the end of the week. The deal, though backed by leases on wireless communications towers, has a...

CenterPoint RRB seeks international interest: Testing the waters in Asia...
November 14, 2005... The latest rate reduction bond offering from Houston-based CenterPoint Energy Inc. was being shown throughout Southeast Asia last week in the hopes that bankers can drum-up demand for the deal and for future Texas RRB issuance. Representatives...

Moody's beefing up market implied ratings tool.
November 14, 2005... The CDO community is the fastest growing customer base in line for a relatively new analytic system offered by Moody's Investors Service - so-called market-implied ratings. In short, the system tracks the gap between what the secondary market...

Home equity ABS investors: great caution is warranted.(Asset backed securities)
November 14, 2005... Displaying an increasingly bearish sentiment on the home equity ABS sector, JPMorgan Securities analysts last week, calling the mix of expected slowing home price appreciation and simultaneously heightened short-term borrowing costs an "indeed...

MortgageIT to scale back subprime loan origination.(Brief Article)
November 14, 2005... Because of the lower value investors are placing on subprime loans, New York-based real estate investment trust MortgageIT Inc. is in the process of scaling back earlier plans for a "heavy growth strategy" within the subprime lending market....

NorthStar, on heels of acquisition, prepares for more CDOs.(NorthStar Realty Finance Corp. to acquire Timarron Capital Inc.)(Collateralized debt obligations)
November 14, 2005... NorthStar Realty Finance Corp. is preparing to issue at least two commercial real estate CDOs in the near future. The New York-based real estate investment trust in recent months has made arrangements for warehouse facilities with Banc of...

Active, two-way flows directed by paydowns, Treasury refunding.
November 14, 2005... Mortgage flows were active and two-way again last week. The week started off with good buying on a combination of paydown reinvestment and a Treasury market rally. There was better buying in both 30s and 15s from the real and fast money crowd,...

Cash-out refis are key to near-term extension risk.
November 14, 2005... As interest rates rise and cash-out refinance volumes drop significantly, discount speeds will be the first to be suppressed, researchers noted. Credit Suisse First Boston analysts expect annualized cash-out volume to drop to $135 billion,...

Prepay speeds expected to fall going forward.(Federal National Mortgage Association Bonds Pass-through Certificates)(Brief Article)
November 14, 2005... A sharp decline in prepayments is expected in November, to be reflected in the December prepayment reports. Street consensus currently predicts speeds on 30-year FNMAs to slow around 16% to 17% from October. Factors impacting the report include...

Demand technicals unfavorable for MBS.(mortgage backed securities)
November 14, 2005... With the recent MBS widening trend and other negatives - particularly extension risk and diminishing demand - plaguing the MBS sector, many market participants are not looking so kindly on mortgages. "All the bad things that we had feared...

GNMAs continues outshining conventionals.(Government National Mortgage Association)
November 14, 2005... GNMAs have been outperforming conventional counterparts lately, reflecting the sector's favorable convexity profile and technicals. Morgan Stanley researchers report that the GNMA positive convexity profile versus conventionals could be...

Dexia offers covered-bond-like deal.
November 14, 2005... In the run-up to the expected year-end secondary legislation on Italian covered bonds (see ASR 5/30/05), Dexia Crediop has moved ahead with its program that functions much like what the market can expect from future covered bond issues. ...

GMAC-RFC data error could cost RMAC deals.
November 14, 2005... GMAC-RFC disclosed last week data errors with respect to four RMBS deals it services from the RMAC series of RMBS deals. Fitch Ratings, Moody's Investors Service and Standard & Poor's responded by placing the ratings of the four RMAC...

Supply builds in Europe before year-end.
November 14, 2005... With a little over six weeks left in 2005, there is no sign that European securitization volumes are shrinking and pricing levels indicate that there's been no shrinkage in appetite either. Primary marketing continues to swell aggressively...

Fitch restores rating to Carlos Slim's toll road deal.
November 14, 2005... Fitch Ratings has restored the AA(mex)' national scale rating on an ABS for Mexican toll road Chamapa-La Venta after the concessionaire running the project, Impulsora de Desarrollo Economico de America Latina (Ideal), submitted information...

Mexican sub-sovereigns loom on the horizon.
November 14, 2005... The Mexican state of Chihuahua is shooting for Wednesday to issue a Ps1.2 billion ($112 million), 10-year deal backed by federal co-participation revenue, which comes from payments by the central government to states and municipality. All the...

Banco de Credito del Peru DPR out this week via StanChart.(diversified payment rights)
November 14, 2005... Banco de Credito del Peru is due this week to issue a $280 million, two-tranche deal backed by diversified payment rights, signaling a break in a protracted lull of structured finance activity from the South American country. The deal is split...

Korean, Malaysian deals lined up.(asset backed securities)(Brief Article)
November 14, 2005... Standard Chartered has all the work it can handle between now and the end of the year in the Asian region. Last week, the bank was on the road with a $300 million auto loan ABS from Korean consumer finance company, Samsung Card. Simultaneously,...

Firms line up for Chinese MBS mandates.(contract for mortgage backed securities)(Brief Article)
November 14, 2005... Deutsche Bank Securities has positioned itself to take advantage of emerging Chinese opportunities by signing a cooperation agreement with one of China's largest state-owned banks - Industrial & Commercial Bank of China. The agreement will not...

Whispers.(FSA has hired John Dare asset finance group)(FGIC hired Eddie Lee credit markets group)(KeyCorp acquired ORIX Capital Markets)
November 21, 2005... FSA has hired John Dare as managing director in its asset finance group, reporting to Rick Holzinger. At FSA, Dare will lead the group responsible for underwriting specialized asset-backed transactions in the U.S., such as insurance...

CapOne first with Reg AB compliant FICO data.(Capital One Financial Corp)
November 21, 2005... Capital One Financial Corp. scooped the credit card industry last week by being the first to provide full FICO score distributions for its credit card trust as will be required on Jan. 1, when Securities & Exchange Commission Regulation AB goes...

Argentine debt piles into ABS.
November 21, 2005... Banks in Argentina are offloading government debt into securitizations as a way to cut their exposure and provide liquidity to obligations that are effectively non-tradeable, sources said. "It's a way for banks to clean up their balance...

ESF rallies behind Spanish ABS law.(European Securitisation Forum )
November 21, 2005... Spanish securitizations are in store for an early Christmas gift as the push for changes to the existing securitization law will yield some result before year-end. The competitive handicaps that have dampened growth in certain areas of the...

Chase adds accounts to offset losses in trust.(Chase Manhattan Bank N.A.)(Brief Article)
November 21, 2005... Chase Manhattan Bank, N.A. added $4.5 billion in additional receivables to its First USA Credit Card Master Trust, according to Securities & Exchange Commission filings. The move is seen as an attempt to buttress the trust in the wake of a...

S&P: Minimum payment increase will not affect credit card ABS ratings.(Brief Article)
November 21, 2005... Standard & Poor's said the increase in credit card minimum payments, due to go into effect at the end of next year, will not negatively impact credit card ABS and will more than likely be offset by higher payment rates and the positive effects...

"Slow hiss" rather than burst seen for housing bubble.
November 21, 2005... NEW YORK - In the ongoing debate over if and when the oft-referenced housing bubble will burst, the latest ABS analyst to publicly weigh in expressed his belief that the bubble will experience a "slow hiss" as prices gradually decline. "Most of...

U.S. ABS market heads into holiday week with $27 billion.(Asset backed securities)
November 21, 2005... In a Herculean effort, the U.S. ABS primary market generated $27 billion in new issues last week, as issuers likely rushed to get deals done before the Thanksgiving-shortened week. Ameriquest Mortgage priced a $2 billion home equity...

After mega offering, Hertz to lay off ABS.
November 21, 2005... Rental car company Hertz Corp., a unit of Ford Motor Co. that will soon become a stand-alone entity, is not expected to issue significant amounts of auto ABS after it becomes a stand-alone company, say analysts. Despite having a near-junk...

CDS leads to the return of volatility in home-equity ABS.
November 21, 2005... As RBS Greenwich Capital analysts put it last week, "it has been a while since we last saw it, and new investors in the sector may not recognize it. Volatility has returned to HEL credit." The volatility is a result of pricing fluctuations in...

Hybrid CDO structures satisfy market need.
November 21, 2005... Investors looking to exploit the newly volatile home equity ABS sector are expected to be among the catalysts for the growth in a relatively new CDO structure, combining both funded and unfunded assets and liabilities, to hit the U.S. market....

For CDOs, pay-as-you-go standards still have way to go.(Collateralized debt obligations)
November 21, 2005... Imagine the embarrassment of a synthetic CDO manager when, forced to purchase the par amount of a referenced asset gone bad, also has to suck up nearly the entire amount of the deal's excess credit enhancement in order to fund the purchase,...

Housing starts dip.(Brief Article)
November 21, 2005... Last week, the U.S. Commerce Department reported that October housing starts dipped by a more-than-expected 5.6% to 2.014 million units - the lowest level since March. Single-family home starts declined 3.7%, after increasing 3% in September...

Market rally encourages better buying.
November 21, 2005... Mortgages saw sizeable volumes last week as the market rallied, flows were two-way and buying was better overall. Servicers remained active, but were now selling 6s to move down in coupon. Originator selling also picked up in the early part of...

Higher rates shine spotlight on 6% coupon.
November 21, 2005... With the 6% coupon trading near par, the MBS market is finally seeing substantial production in this coupon from originators. Many analysts attribute the rise not only to higher mortgage rates, but also to the fact that too much excess...

Speeds to continue slowdown.(Brief Article)
November 21, 2005... Prepayment speeds are expected to decline around 16% for 30-year FNMAs in the November report to be released next month, with 2004 and 2003 6s expected to show the largest slowing at 18% to 20%. Speeds actually increased slightly in these...

Analysts encourage investors to embrace ARMs.(Adjustable rate mortgages)
November 21, 2005... With extension risk now an issue in the MBS market, the hybrid ARM sector is once again in the spotlight. Not only are ARMs a defense against extension, the sector also provides shelter from increased market volatility. And although agency...

European deal frenzy is on for last months of 2005.
November 21, 2005... GMAC-RFC found itself in a bit of a hotspot earlier this month following its announcement of data reporting errors in respect to four RMBS deals it services from the RMAC series of RMBS deals (see ASR 11/14/05). Despite this, Standard & Poor's...

Argentine investors accept longer tenors.(Brief Article)
November 21, 2005... The tenors of Argentine structured deals are lengthening, a welcome development in a market where many investors had been loath to take on long-term financial risk of any kind. The senior tranches of five of the 12 transactions that priced in...

Prisons and bedpans beckon ABS players in Chile.
November 21, 2005... It's unlikely that crime and sickness have ever looked so good to Chilean ABS players, as a recent securitization of subsidies to build three prisons could infect others in the same sector and in hospitals. "It's a structure that could be...

BHW completes PROVIDE #6, readies #7.(BHW Bausparkasse)
November 21, 2005... After BHW Bausparkasse and KfW Bankengruppe priced the sixth private residential mortgage loan securitization under the PROVIDE platform, it wasted no time in marketing its seventh deal issued under the platform last week. The PROVIDE Blue...

New union bridges U.S. and European high-yield concerns.(Brief Article)
November 21, 2005... The European High Yield Association (EHYA) plans to integrate its activities with the Bond Market Association's (BMA) European activities in London starting in January, the groups said in a joint press release last week. The combination is...

Whispers.(appointments )
November 28, 2005... Harris Nesbitt hired Eric Schubert as managing director and head of structured finance, reporting to Surjit Rajpal, head of loan products. Schubert joins Harris Nesbitt after nearly 25 years in the investment and corporate banking group at Banc...

Stars align for new Kazakh DPR.(diversified payment rights)
November 28, 2005... Having secured entree to Europe's corporate-bond and loan markets, over the last two years the leading Kazakh banks have skipped the time-consuming structured route. But that doesn't preclude the occasional trip, as evidenced by news that the...

MBS may need new liquidity backstop.(mortgage backed securities)
November 28, 2005... With the Senate version of the GSE bill proposing severe portfolio growth restrictions, mortgages might have to find a new marginal buyer, according to an analysis by Lehman Brothers. The Senate GSE bill currently under consideration calls...

Greece revamps ABS program.(asset backed securities)
November 28, 2005... Greece announced earlier this month that it will no longer move ahead with a 1.5 billion ($1.7 billion) securitization deal slated for next year intended to reduce its budget deficit for 2006. However, the government plans to move ahead with...

New Century implements fraud detection software.(New Century Financial Corp.)
November 28, 2005... Amid growing investor concern regarding mortgage fraud, New Century Financial Corp. announced that it partnered with a company to implement fraud prevention software into its loan origination software. New Century bought consulting...

Barclays adds perspective on credit card chargeoffs.(Barclays Capital )
November 28, 2005... As the number of U.S. consumer bankruptcy filings have returned to earth in recent weeks, the industry has been busy digesting the impact of the surge in filings and what it will mean for credit card ABS. Last week, a team of experts assembled...

ABS primary makes $8 billion showing despite holiday week.
November 28, 2005... The U.S. ABS primary market took a slight holiday break as the Thanksgiving holiday approached last week, but still managed to generate a cool $8 billion in just two days. The shortened week may have caused a number of issuers to sit out, and...

Fitch to introduce auto ABS seller/servicer ratings.
November 28, 2005... Fitch Ratings is working on a new methodology for assigning formal seller/servicer ratings to auto ABS issuers and should have the criteria ready sometime next year. Fitch Associate Director Lena Katsnelson confirmed the methodology was being...

Spread volatility continues in home equity ABS market.(asset backed securities)
November 28, 2005... As the tail of the newly developed ABS CDS market wags the dog of the home-equity ABS market, analysts are hoping a more mature CDS market could bring the end of recently volatile home-equity ABS spreads. According to sell-side researchers,...

Dynamic Credit Partners plans second CDO.
November 28, 2005... Dynamic Credit Partners expects to bring its second CDO to the market before year-end, according to sources. The $992 million Barrington CDO Ltd. will contain as much as an 80% concentration of RMBS collateral, up to 50% of that being subprime...

Conforming limits could see highest ever percentage increase.
November 28, 2005... The new GSE conforming balance limit - to be announced next month - is expected to rise substantially, possibly experiencing the biggest year-over-year percentage increase ever, according to Countrywide Securities. The limits, based on...

Foreign demand may not be enough to stabilize MBS spreads.
November 28, 2005... Even with the U.S, Treasury's September data showing an increase in foreign agency security investment, JPMorgan Securities analysts believe that expectations of foreign demand for MBS are highly overstated. According to the Treasury...

Munich Re issues second wind deal.(Munich Reinsurance Co.)
November 28, 2005... Reinsurer Munich Re said last Monday that it privately placed 110 million ($129 million) of risk-linked securities to provide protection against severe Western European windstorms. BNP Paribas acted as lead manager on the deal and Risk...