Asset Securitization Report articles from October 2003

Asset Securitization Report archives from October 2003

Whispers.(meshed briefs)
October 6, 2003... Information Management Network has rescheduled its ABS West 2004 conference to Feb. 2-5, moving the event up by two days. The ninth annual event is still set for its new venue, the JW Marriott Desert Ridge Resort & Spa in Phoenix, Arizona. The...

ABS market to invade Boca Raton.
October 6, 2003... Fresh off securing its first cryogenics laboratory, the resort city of Boca Raton welcomes the asset-backed community for the first time, as Information Manage- ment Network, in conjunction with Frank Fabozzi, host the ninth annual ABS East...

FIFA brings World Cup furor to securitization again.
October 6, 2003... Mia Hamm, hammering in yet another goal for the USA women's world cup, is one reason the world is in tune with Federation Internationale de World Cup Football Association (FIFA). But for the securitization industry, the draw might be its new...

Even cow deals get the blues.
October 6, 2003... Cowboys gone bad, dodgy ranch hands and stolen livestock branded with the insignia of sophisticated financial trusts: a corner of Colombia's securitization market is looking awfully like a Western. While the marriage of agribusiness and...

Market seen navigating GE Mortgage Insurance downgrade.(Brief Article)
October 6, 2003... Despite Standard & Poor's Corp. announcement that it would evaluate the credit quality of the collateral backing RMBS insured by G.E. Mortgage Insurance, following its announcement that the insurer would no longer maintain a triple-A rating,...

BofA completes ABS/MBS reorg.(Brief Article)
October 6, 2003... In the completion of the previously announced restructuring within Banc of America Securities (see ASR 7/21/03), Global Asset Securitization operations have been split into two groups - Global Structured Finance and Residential Mortgage...

S&P takes servicer rankings past mortgages with MBNA.
October 6, 2003... Setting a new standard for the industry, MBNA America Bank received a servicer rating of "strong" last week by Standard & Poor's with a "stable" outlook - the first servicer rating assigned to a non-real estate consumer asset class. The move,...

DVI aside, equipment churns into 4Q03.(Industry Overview)
October 6, 2003... As anticipated, issuance in the equipment sector is significantly ahead of last year's pace, with close to $9 billion so far in 2003, including truck and equipment wholesale financing. At about $7 billion, small-, mid-ticket and A&G sectors...

ANC's first post-bankruptcy deal.
October 6, 2003... Say hello to the new ANC Rental Corp. - or rather, say hello to Vanguard Car Rental USA, the freshly formed entity that bought ANC's assets, including its subsidiary brands Alamo Rent a Car and National Car Rental, out of bankruptcy. The...

Heading into Q403, Citigroup maintains lead as ABS manager.(Industry Overview)
October 6, 2003... California sunlight, sweet Calcutta rain, Honolulu starbright - the song remains the same. Citigroup Global Market's fast start this year remained insurmountable throughout the third quarter this year, as it remained atop the league tables for...

Mortgage lending maintains reaffirms GMAC's lead.
October 6, 2003... Thanks to its mortgage-lending unit, General Motors Acceptance Corp. is the leading issuer of ABS through the first three quarters of the year, according to Thomson Financial. With GMAC-RFC accounting for the bulk of its $44.2 billion in total...

Autos lead another $14 bln ABS primary week.(Industry Overview)
October 6, 2003... The U.S. ABS primary market remained hot, with $14.5 billion marketed throughout the week. For a change, the auto sector saw the most supply, pricing over $6 billion, including a pair of firsts as well as some familiar names. Home equity supply...

ABS downgrades drop overall in Q303, DVI exception.
October 6, 2003... Downgrades in Q303 were down sharply from Q103, with the exception of CDOs and equipment leases, according to Moody's Investors Service, which is expected to release these findings in its report detailing upgrade/downgrade activity for the...

Rich levels hurt mortgages in both rally and selloff.(Industry Overview)
October 6, 2003... Last week, mortgages demonstrated their current predicament. Their rich levels limited them from participating in rallies and led to strong underperformance on market selloffs. The week saw an increase in originator selling to about $1.5...

UBS tops RMBS manager league tables again.
October 6, 2003... UBS, no stranger to the No.1 spot, once again emerged on top of the manager activity rankings for both agency and non-agency MBS, according to final results from Thomson Financial's RMBS 2003 league tables for the first three quarters of the...

Lackluster bank demand only temporary, analysts say.(Industry Overview)
October 6, 2003... Banks have been retreating from buying MBS at current yield levels, affecting CMO demand. Analysts predict that these financial institutions will soon be buying mortgage-backeds again, though CMO creation might wait a little before it catches...

Moody's, S&P watch listings for CMBS as better indicator.
October 6, 2003... Watch listings done by Moody's Investors Service and Standard & Poor's more often lead to CMBS downgrades than those put out by Fitch Ratings, said a recent report by Nomura Securities International. Aside from this, Nomura said that CMBS...

Mexican consumer assets struggle to re-emerge.(Industry Overview)
October 6, 2003... A deal last week by Mexican credit agency Fonacot ended a dry spell in consumer loan securitizations that began with the final issue off a program by department store Elektra in mid 2002. "After Elektra we saw nothing," said Maria Tapia, an...

Big calendar continues to build in Europe.(Industry Overview)
October 6, 2003... There are no signs of a slowdown in Europe, and the forward calendar is bulking up in excess of E10 billion (US$11.6 billion) moving into the new quarter. There are still a number of RMBS issues yet to price, but the market is warming up to a...

Korea taps into Japanese investors.
October 6, 2003... After the dearth of supply from the Korean market, the 27 million transaction (US$ 243 million) for Korean Air Lines provided a renewed focus of hope for the market. KAL Japan ABS 1 involved a securitization of Japanese yen-denominated future...

Is a new future in store for German synthetic ABS?
October 6, 2003... The German financial regulator, BAFin, is looking to rework the dynamics of structuring synthetic securitizations. Some issuers have already felt pressured, believing that the regulator might decide on a document that would create some...

Whispers.(meshed briefs)
October 13, 2003... Deutsche Bank Securities announced last week the hiring of John O'Connor as director and senior 15-year mortgage passthrough trader. O'Connor, who is based in New York, will report to Trip Mestanas, managing director and head of mortgage...

FASB delays FIN 46 effective date.
October 13, 2003... BOCA RATON, FLA. - In a meeting last week, the Financial Accounting Standards Board decided to delay implementation of its consolidation guidelines for VIEs, the notoriously controversial Financial Interpretation No. 46. Initially reported in...

Meaningful bank buying finally materializes.(Industry Overview)
October 13, 2003... Last week mortgages benefited from light supply and strong demand from a variety of sources, most notably banks. The previous week's selloff cheapened mortgages up enough to encourage investors to move back into the sector. While mortgages are...

ABS researchers optimistic on CCABS spreads.
October 13, 2003... BOCA RATON, FLA. - The ABS research roundtable discussion at Information Management Network's ABS East conference last week centered primarily on the valuation of triple-B credit card ABS versus comparably rated corporate unsecured debt. The...

"Pistol-whipping CFOs": Is ABS fundamentally flawed?
October 13, 2003... BOCA RATON, FLA. - In the spirit of ABS conferences past, the opening panel discussion at Information Management Network's ABS East had some heat and tension to it. Perhaps the panel climaxed when John Devaney of United Capital Markets...

Credit-savvy investors speak up, and it's their turn to shine.
October 13, 2003... The ABS investor has seemingly evolved into a credit-savvy creature wary that structure does not always protect investments. Speaking at Information Management Network's ABS East, the Uncovering Relative Value in the Public Markets panel...

E*Trade gains CDO manager rating.(Brief Article)
October 13, 2003... Fitch Ratings took action last week on E*TRADE when it added E*TRADE Global Asset Management Inc. to the list of CDO managers it has reviewed and for which it has issued manager ratings. Topping the findings of Fitch's report on the firm...

Material nonpublic information guidelines released.(brief article)(Brief Article)
October 13, 2003... The Joint Market Practices Forum last week released its final version of its principles and recommendations regarding the handling and use of material nonpublic information when managing credit risk. The guidelines had been presented in an...

Correction.(Brief Article)
October 13, 2003... In a story published in ASR's 10/06/03 issue entitled "Lackluster Bank Demand Only Temporary, Analysts Say," the source of a report cited was incorrectly attributed. Morgan Stanley released the recent report on bank demand, not Lehman Brothers....

Citi helps demystify deep MI.
October 13, 2003... Citigroup Global Markets is adding to its analysis of subprime mortgage securitizations to allow for better comparisons of credit performance, regardless of whether deals have mortgage insurance (MI). Although deep MI mitigates losses,...

Auto lease growth leveled off.(Industry Overview)
October 13, 2003... BOCA RATON, FLA. - The once-rapidly growing auto lease sector of the ABS market has likely reached maturity and growth will be limited for the foreseeable future, panelists speaking at Information Management Network's ABS East gathering said....

Mortgage hedging knocks around other bonds.
October 13, 2003... As the MBS market grows in size and as borrowers become increasingly adept at exercising the refinancing option, the negative convexity in mortgages is beginning to have more of an influence in the bond market as a whole, said analysts. In...

Anti-Predatory Lending Laws Assume a Prominent Role in the U.S. RMBS Market.
October 13, 2003... By Natalie Abrams, Esq., Assistant General Counsel; Maureen Coleman, Esq., Assistant General Counsel; and Susan Barnes, Director, of Standard & Poor's Ratings Services Increased access to mortgage loans has led to increased home ownership...

Talk of American Airlines sale-leaseback deal takes flight.
October 13, 2003... There is word that American Airlines is in preliminary discussion with the Oklahoma Development Finance Authority regarding a sale-leaseback transaction involving two of the company's maintenance facilities in Tulsa. The sale-leaseback...

Korean ABS keeps its head above water.
October 13, 2003... From a Korean ABS market - described by Fitch Ratings in a recent report as stressed but surviving' -Shinan's Card's first cross-border securitization deal emerged last week. The transaction securitized credit card receivables and the bonds...

Argentines stay the course with consumer and export assets.
October 13, 2003... As Argentina enters Q1, the tone for the securitization industry is little changed since the beginning of the year; perhaps it's a tad brighter, but volumes and asset choices remain narrow. The same two sectors that crept back from the meltdown...

Chile auto loans come back, sort of.
October 13, 2003... The second Chilean auto deal is revving its engines, but the asset class is unlikely to ever come anywhere near the importance it has in other mature markets. "Most of the originators here are backed by banks; they don't need to go to market,"...

Frans 2003 reviewed as Air France talks alliance with KLM.
October 13, 2003... After having just closed this summer, Frans 2003 plc - an equipment enhanced trust certificates (EETC) transaction backed by payments from Air France - saw its unwrapped class B securities come under pressure. This came after reports last week...

Insolvency rules may stifle corporate ABS growth in Euroland.
October 13, 2003... Industry players have for sometime expressed interest in new insolvency legislation due to take effect over the next year in Spain and Italy. They are hoping that it could facilitate the use of corporate securitization structures. However,...

Europe sees a week with little sterling but big euro deals circulating.
October 13, 2003... At press time last week the new issuance calendar for October had already reached E6.3 billion (US$7.39 billion) with a number of new deals building up in the pipeline. This should set Europe well on its way to reach predicted year-end...

Whispers.
October 20, 2003... Susan Knapp has been promoted to team manager for Latin America at Moody's Investors Service. Moving into a more business-oriented role from her prior tenure as senior credit officer of Latin American structured finance, Knapp will be...

Time slips away for DVI: Performance declines persist...
October 20, 2003... As the situation at bankrupt equipment finance company DVI Inc. worsened last week following the release of the August servicing report, investors were ironically growing more comfortable with the name - bidding improved, with buyers...

LatAm Q3: Brazil all the rage.
October 20, 2003... Brazilmania swept the cross-border market in the third quarter. Nine issuers took advantage of a balmier climate, placing a total US$2.2 billion in ABS, double the volume of the previous six months. As the new Brazilian President Luiz Inacio...

FASB giveth, FASB taketh away: Is the ultimate FIN 46 solution a "new" item on the balance sheet?
October 20, 2003... In 2003, there has been nary a dull week in securitization accounting, as just about every Wednesday the Financial Accounting Standards Board grinds out a new set of ideas, often in opposition to deliberations the week prior. Over the past...

Amresco's business loans securitized.
October 20, 2003... Business Loan Express is out in the market with a small business loan deal backed 60% by Amresco Independence Funding originated SBA loans, perhaps the last batch of Amresco-branded small business loans ever to grace the ABS market. BLX...

ABFS pullsthrough the squeeze.(Brief Article)
October 20, 2003... Last week American Business Financial Services announced that it had closed two mortgage warehouse facilities with two separate institutions, providing the company with $450 million in added liquidity to fund its origination, which had been...

Murrayhill positions itself as a deal cop'.
October 20, 2003... Sandwiched between the brave new world of securitized assets and recording boatloads of revenue on the balance sheet is that dimly lit and somewhat pesky area known as oversight. One of the fixed-income market's first firms to burrow in and...

College Loan Corp. maps issuance plan.
October 20, 2003... With its first public term securitization under its belt, College Loan Corp. aims to issue student loan ABS two to four times a year going forward, sources said. The new player in the student loan sector also plans an expansion into Europe, via...

Holiday-shortened market picks up steam late.
October 20, 2003... The post ABS East primary ABS market started off slow last week, with just one transaction kicking around as of Tuesday's market close. But as has been the case throughout the two MLB league championship series, the action developed late and...

No break for mortgage valuations.
October 20, 2003... Mortgage valuations remain rich as supply continues to be limited and demand holds strong. Last week, originator supply averaged about $1 billion per day. At the same time, banks were very active buyers along with insurance companies. Other...

Is mortgage credit deteriorating?
October 20, 2003... Though delinquency rates for mortgage loans rose for the second quarter report (after three consecutive quarterly declines) and are expected to show a slight uptick in the third quarter report, Jay Brinkmann, vice president of research and...

Fannie discloses positive month-end results.
October 20, 2003... Fannie Mae released the details of its September month-end duration position last Thursday, disclosing a positive one-month duration gap. The figure was down from Fannie's August results of positive four months. Analysts from US Bancorp Piper...

Basle II: bumpy ride could get bumpier.
October 20, 2003... At a recent meeting held in Madrid, the Basle committee decided to comply with several of the suggestions set forth by an overwhelming majority of industry participants. The meeting was held to address the approximate 200 public responses Basle...

Euro market maintains solid pipeline.
October 20, 2003... It was another busy week, as the European market shows no signs of abating. According to researchers, European supply is running 40% ahead of issuance this time last year, meeting forecasts that places year-end volume for 2003 at E165 billion...

Despite a slight dip, Japan still in positive growth state.
October 20, 2003... For the first nine months of 2003, Japanese issuance stood at US$25.6 billion, slightly down compared to US$27 billion recorded last year, according to figures provided by Merrill Lynch. Deutsche Securities' numbers nearly match, indicating...

U.K. housing sound, save a significant spike in rates.
October 20, 2003... Numerous, sometimes contradictory, reports on the state of U.K. housing have created a general uncertainty as to the market's future. While frustrating, this has done little to quell the growth and performance of securitization in the sector....

Whispers.
October 27, 2003... The International Finance Corp. (IFC) is reportedly participating in a securitization for Brazilian bank Unibanco via Nomura Securities (see p. 24). UCC Capital Corp. recently hired Carl Douglas to lead the firm into technology-related...

Bridging the Alt-A/subprime gap with Alt-B.
October 27, 2003... If mortgage rates do begin to steadily rise - as most of the Street predicts - lenders could look down in credit to maintain origination volume, an effect that could trickle into all tiers of the market, as, for example, prime lenders skim the...

GSEs take the forefront at MBA.
October 27, 2003... SAN DIEGO - Never before has the mortgage market played such a significant role in the macro economic landscape, so it's hardly surprising that last week's annual Mortgage Bankers Association convention kicked off with this sentiment. MBA...

NERA issues final' notching study draft.
October 27, 2003... An independent study meant to settle the now-stale notching debate appears to be near completion, after a lengthy and unexplained delay. The most recent draft went to the three rating agencies for comment last week, popping up in email...

Fleet surprise buyer of FNANB portfolio.
October 27, 2003... Holders of approximately $1 billion of First North American National Bank (FNANB) credit card ABS cheered last week's announcement that the $1.5 billion portfolio would be sold to FleetBoston Financial. While the move was viewed an undeniably...

In FASB news...
October 27, 2003... At this Wednesday's meeting, the Financial Accounting Standards Board will discuss issues that have arisen relating to the proposed modification of FIN 46 (estimate 90 minutes), as well as issues related to the re-drafting of the amendment to...

Auto sector makes bulk of $16 billion ABS week.
October 27, 2003... New-issue ABS volume soared last week, with $16 billion having priced and up to $2 billion left in the pipeline for this week. The auto sector led the way last week, pricing over $7 billion of supply split among loan, lease and floorplan...

DVI servicing transfer now seen Bids due Oct. 31.
October 27, 2003... The decision to transfer the servicing rights of DVI Inc.'s deteriorating medical equipment portfolio has reportedly been made by debtor-in-possession provider Goldman Sachs. If all goes well, the servicing rights will be transferred to the...

Diversity divides CDO nation.
October 27, 2003... The pros and cons of CDO diversification has attracted a lot of attention. In his opening comments at the Bond Market Association's CDO conference last month, Merrill Lynch's Chris Ricciardi noted diversification had offered little in the...

Changes abound to the private market's ratings game.
October 27, 2003... The age-old practice of rating distributions is on the cusp of a new era. Effective Jan. 1, 2004, the ratings process for private market issuers will undergo a streamlining between the National Association of Insurance Commissioners (NAIC) and...

ABN Amro ready to roll with U.S. term ABS team.
October 27, 2003... With the recent hiring of Jim Regan to head its U.S. ABS secondary trading desk, the ABS puzzle is just about complete for ABN Amro. Since May, the Dutch underwriter has been quietly filling senior roles in its management team, poaching...

Munchies for multisector CBOs - issuance up 50% since 2000.
October 27, 2003... Grasping the brass ring of stable performance these days is as highly sought after as a World Series ring around Boston these days. But while no asset class is ever risk-free, the CBO market has been drawing a flock of investors in phenomenal...

MBA says economy is improving as the job market becomes more robust.
October 27, 2003... SAN DIEGO - In a press conference at the Mortgage Bankers Association (MBA) 90th Annual Convention and Expo, economists from the MBA said the picture is improving, which will likely lead to employment growth in the coming year. The MBA also...

Rich levels stall buying.
October 27, 2003... Buyers were more reluctant last week to add to their positions given the very rich levels. The early part of the week saw some support from banks, as the market held within a narrow range and supply was nil. As the market rallied mid-week,...

Australian RMBS continues to look global.
October 27, 2003... The Australian RMBS market has for some years now been successfully issuing on a programmatic basis mainly into the U.S., but also to the European market. A total of A$140 billion (US$97.92 billion) of Australian RMBS has been issued to date,...

Will the Lebanese tobacco monopoly get thumbs up for securitization?
October 27, 2003... According to market reports last week, the Lebanese state-owned tobacco monopoly, Regie Libanais des Tabacs et des Tombacs, is set to proceed with its long-awaited securitization, structured under the country's law No. 430. As it turns out,...

A whole lot of business for Europe's whole business.
October 27, 2003... While it's hard to predict the next rendition of corporate securitization in Europe, the hybrid sector holds promise, as evidenced by the emergence of a new, streamlined European Corporate Securitization group at Standard & Poor's, co-headed by...

U.K. stamp duty adds taxing dimension to sale/lease-backs.
October 27, 2003... A new U.K. stamp duty could add a significant tax burden to long-term leases that will, in the long run, mar the cost-effectiveness of sale/lease-back transactions, said analysts at Standard & Poor's. "It's a tax that will certainly make things...

Double-B opportunity for investors in Euro market.
October 27, 2003... Last week kicked off with at least E2 billion (US$2.3 billion) of funded notes circulating the market, so there's plenty of paper still left to price by the end of this month. In keeping with the revival of ABS paper, more corporate paper crams...

International Finance Corp. heard pairing with Unibanco.(Brief Article)
October 27, 2003... The International Finance Corp. (IFC) is understood to be involved in a securitization for Brazilian bank Unibanco, with Nomura Securities as lead. It is unclear whether the multilateral agency is providing a partial credit guaranty - as it has...

Colombians use Midas touch in securitizing foreign junk bonds.
October 27, 2003... What's junk to foreigners might be gold to natives. For three years Colombian bankers have plucked high-yield, cross-border bonds from the dollar market and used them to back high-rated local deals, denominated in both pesos and greenbacks....