Asset Securitization Report articles from October 2005

Asset Securitization Report archives from October 2005

Whispers.(Rabobank International appoints Ronald Grobeck)(American Securitization Forum made a donation to Habitat for Humanity International)(Rachel Hardee moves to Hong kong branch)
October 3, 2005... Rabobank International hired Ronald Grobeck as a managing director in the firm's CDO group, where he will be responsible for the overall management of Rabobank's corporate CDO fund vehicles, including portfolio management, trading, structuring,...

New Century feels whole loan bid pinch, vows to decrease I/Os.(Loans with an Interest Only )
October 3, 2005... Irvine, Calif.-based subprime mortgage lender New Century Financial Corp., one of the largest issuers of subprime mortgage ABS in the market, last week announced that it's having difficulty selling loans to secondary market investors. Pointing...

Origination evolves in Mexico.(Residential Mortgage-Backed Security )
October 3, 2005... NEW YORK - The nascent RMBS market in Mexico has stirred interest in upstream activities like co-financing between private and state-owned originators, risk-based mortgage lending and credit scoring. These topics formed part of a lively...

Moody's revises CDO correlation.(Collateralized Debt Obligation)(Moody's Investor Service)
October 3, 2005... Moody's Investors Service has enhanced its analysis of highly concentrated structured finance CDOs - largely as a result of the ever-increasing exposure to RMBS in recent deals. As the largest sector of the ABS market, it's not uncommon to see...

Florida chooses advisor for hurricane recovery bond program.(Florida. Public Service Commission)(asset backed securities)(Brief Article)
October 3, 2005... The Florida Public Service Commission announced last week it selected New York-based advisor Saber Partners to be advisor for a program of hurricane recovery stranded cost ABS issuance to help Florida utility companies fund repairs to power...

ABA report spooks some, but CCABS on solid ground.(American Bankers Association)(credit card Asset backed securities)(Brief Article)
October 3, 2005... An American Bankers Association report that credit card delinquencies rose for the second quarter in a row raised some eyebrows in the ABS market last week. However, sources say the news may be much ado about nothing, and poses no immediate...

U.S. ABS primary slows to $11 billion.(asset backed securities)
October 3, 2005... The U.S. ABS primary market generated $11 billion in new issues last week as the market digested the impact of the milder-than-expected Hurricane Rita. In the home equity sector, Lehman Brothers priced a $221 million deal on Monday. The...

CenterPoint RRB likely unscathed by Rita-related outages.
October 3, 2005... CenterPoint Energy's 2001 rate-reduction bond deal will likely not be affected by power outages to nearly half of the company's customers due to Hurricane Rita. Rating agency officials say the disaster likely falls within the credit enhancement...

Mortgage borrower concentrations shift by region.
October 3, 2005... As not only Hurricane Katrina, but pockets of rapid home price appreciation have made "geographic concentration" a popular term lately among concerned secondary market participants, another factor - borrower type - has entered into the equation...

Subprime MBS pools weather first payment shocks.
October 3, 2005... Now that the first of the subprime ARM pools have reset into the heart of the Federal Reserve Board's quarter point rate increases, preliminary studies are showing them to be performing relatively well. In a report last week, analysts with...

Synthetic CMBS CDOs gaining speed.
October 3, 2005... Following on the heels of the booming synthetic subprime mortgage market, CMBS are picking up steam within the synthetic sector. The collateral type is no longer just an afterthought in synthetic CDOs of asset-backed securities, as CMBS now...

MBS levels attractive, but many are waiting for clearer direction.(mortgage backed securities)
October 3, 2005... Two-way flows were modest last week on expectations of much better buying, as valuations have cheapened to levels not seen in quite some time. Yield curve movement, however, did not really settle down and provide a clear direction, limiting...

Fannie and Freddie stop their incredible shrinking portfolio.(Federal National Mortgage Association)(Federal Home Loan Mortgage Corp.)
October 3, 2005... Fannie Mae reported an additional $20 billion decrease in its retained portfolio in August, with another dip expected for September. After this, Fannie could likely stop reducing its mortgage holdings as it is expected to exceed the capital...

Prepayment speeds seen dropping in this week's reports.(Brief Article)
October 3, 2005... With the October prepayment reports due to be released Thursday, Street consensus estimates are that speeds will decline 12% to 15% in September. Specifically, Credit Suisse First Boston analysts are expecting speeds to generally drop 8%...

Illinois court ruling: state predatory lending law pre-empted.
October 3, 2005... A long-fought battle ended in Illinois last week, souring consumer and states rights advocates but providing clarity for mortgage lenders and secondary market participants. Striking down an appellate court ruling, the state's Supreme Court...

Aggregate numbers hide regional differences in prepays and appreciation.
October 3, 2005... With home prices still appreciating at record levels, analysts report that the differences in growth rates on an individual state level are disguised, and in turn, artificially inflating prepayment speeds. Credit Suisse First Boston...

GSE limits set to rise once again.(government sponsored enterprise securities)(Brief Article)
October 3, 2005... Fannie Mae's and Freddie Mac's conforming limits for next year are set to increase soon, and analysts are predicting agency limits to top $400,000 next year. The computation of the new limits is based on the Federal Home Loan Board...

Despite troubles, U.K. RMBS continue hitting primary market.(residential mortgage backed securities)
October 3, 2005... October's new-issue pipeline saw another 4.7 billion ($5.6 billion) added at the close of last week, as two U.K. RMBS deals were announced. Marketing began for the GBP960 million ($1.6 billion) Leek Finance # 16, the U.K. RMBS deal from...

The German Distressed Debt Market: A Land Of Opportunity?
October 3, 2005... by Dr. Andreas von Keitz, director, and Roman Zeller, managing director, AlixPartners The German distressed debt market is the biggest and most attractive market of its kind in Europe. The market, estimated at approximately 160 billion to...

Eurostat further defines ABS allowances.(asset backed securities)
October 3, 2005... Eurostat, the statistical office of the European Union, said it intends to further clarify the rules on securitization operations in its ESA95 manual on government deficit and debt, following the numerous problems that have arisen interpreting...

Secondary market playing second fiddle to primary line-up.
October 3, 2005... Volumes in European secondary flows are light and investor participation is low, say market participants, adding that at the moment the secondary does not offer compelling value when compared to a solid European primary pipeline. "The...

Garantibank brings Radian on board.(residential mortgage-backed securities of Su Casita)(Uniao de Bancos Brasileiros S.A.)(Brief Article)
October 3, 2005... Last week, Turkey's Garantibank priced a five-tranche $600 million deal backed by diversified payment rights, with the previously undisclosed participation of Radian Group in the upsized deal (see ASR 9/26/05). The monoline had until now kept...

Mexico real estate originators sidle up to foreign investors.
October 3, 2005... NEW YORK - Moody's Investors Service played host to one of Latin America's burgeoning stars, Mexico's real estate market, at its sixth annual Latin American Securitization Briefing,' held here Sept. 23. Discussions of deals backed by...

Malaysian bank ponders rare NPL ABS.(non-performing loan)(asset backed securities)(Bank Islam Malaysia Bhd.)
October 3, 2005... Bank Islam Malaysia, one of the country's three Islamic commercial banks, may be looking at securitizing some of its non-performing loan portfolio, according to talk emerging last week from Kuala Lumpur. By the end of last year, the bank...

Foreigners unlikely to bite Taiwan's hook.
October 3, 2005... The Government of Taiwan wants to reduce the number of state-run banks from 12 to six by the end of this year, and interestingly, senior officials said it would look to form a foreign bank partnership in its efforts to build an ABS franchise....

SK Corp. and Merrill in ABS venture.(Asset backed securities)(Merrill Lynch and Company Inc.)(Brief Article)
October 3, 2005... Korea's biggest oil refining concern, SK Corp., is set to sell its Seoul-headquarters to a special purpose vehicle for W450 billion ($437 million), company officials said last week. SK Corp. is selling assets partly to offset the $3.1 billion...

Whispers.
October 10, 2005... Brigitte Posch has joined the emerging markets team at Ambac, having left Moody's Investors Service, after eight years at the agency. Posch assumes her new position as first vice president on Oct. 10. Posch had worked in Moody's Latin American...

FSA soothes U.K. covered bond issuers back to market.(Financial Services Authority)
October 10, 2005... On the back of reassurances recently made by the Financial Services Authority that it did not intend to implement a rigid limit to covered bond issuance (see ASR 8/15/05), lenders Nationwide and Northern Rock have lined up respective deals due...

40-year MBS on the rise.
October 10, 2005... With mortgage lenders like New Century Financial Corp. introducing 40-year mortgages to their customers, supply is seen growing in the sector going forward. Although not seen as presenting significant additional risk versus 30-year...

DPRs hit, warm to Eurasia.(diversified payments rights)
October 10, 2005... Diversified payments rights have grown into a pillar of emerging market structured issuance over the last decade. DPR deals have totaled over $16.8 billion in issuance so far, with originators from Turkey and Brazil combined capturing 90% of...

Countrywide leading issuer at 3Q05 close.(Brief Article)
October 10, 2005... Countrywide Securities is once again at the top of the ABS issuance league tables, according to data tracked by Thomson Financial. As the market heads into the homestretch of what will most likely be yet another record-breaking year, 2005 could...

U.S. ABS primary opens quarter with $11 billion week.(asset backed securities)
October 10, 2005... The ABS primary market generated $11 billion in new issuance to open the final quarter of 2005, the same volume as the week before. The Jewish holidays may have served to dampen volume slightly, as many in the market observed the holiday, and...

Bear tops year-to-date MBS manager rankings.
October 10, 2005... After falling to third place at midyear, Bear Stearns is back atop the RMBS manager activity rankings year-to-date, according to data maintained by Thomson Financial. The strong showing throughout the quarter has Bear Stearns on pace to top the...

Citigroup leads Lehman, field gets tighter.
October 10, 2005... For the past two years Citigroup Global Markets has occupied the top slot in the lead manager league tables, according to data maintained by Thomson Financial. However, this could be the year that a new champion emerges as Lehman Brothers is...

Merrill Lynch again dominates growing ABS CDO market.(collateralized debt obligations)(asset backed securities)
October 10, 2005... Merrill Lynch again brought the largest share of CDOs to the U.S. primary market compared to its peers, bringing some $17.5 billion to the market to achieve an 18.1% market share in the first three quarters of the year, according to data...

Private student loan ABS to benefit from bankruptcy law.
October 10, 2005... Private student loan ABS should experience lower default rates and spreads could potentially tighten on some deals as a result of the implementation of the Bankruptcy Reform Act next Monday, according to Morgan Stanley researchers. Changes to...

Credit card ABS positioned for final bankruptcy surge.
October 10, 2005... As the Oct. 17 implementation date for the Bankruptcy Reform Act rapidly approaches, a second surge of bankruptcy filings has beset the ABS market as consumers continue rushing to file before the more stringent law takes effect. Though the...

PG&E plans $800 billion RRB for November.(Pacific Gas & Electric Co.)
October 10, 2005... Pacific Gas & Electric Co. plans on issuing an additional $800 million energy recovery stranded cost ABS next month, according to a company official. PG&E Assistant Treasurer Nick Bijur confirmed the deal was imminent, and that Barclays...

DBRS continues march south into U.S. market.(Dominion Bond Rating Service Ltd.)
October 10, 2005... For a rating agency whose analysts claim that a lack of market share is a competitive advantage, its growth would nearly prove counterintuitive. Dominion Bond Rating Service, the only private rating agency certified with NRSRO status in the...

The effects of pool WAC changes on excess spread in U.S. auto ABS.(weighted average coupon)
October 10, 2005... By Moody's Investors Service Associate Vice President, Wing Ng and Associate Analyst, Wei Hu Changes over time in the weighted average coupon, or WAC, of a securitized pool of auto loans can have a significant impact on the amount of...

Issuer delinquency tiering still fairly scattered.
October 10, 2005... Subprime mortgage loans considered seriously delinquent began to increase in August, while prepayments slowed amid rising short-term interest rates, according to a Friedman Billings Ramsey report released last week. Further, head ABS analyst at...

Gross: Bubble hangover could hit within 3 to 6 months.(Brief Article)
October 10, 2005... According to Newport Beach, Calif.-based PIMCO's Bill Gross, the party of rapid home price appreciation should come to a fizzle within the next three-to-six months. "Make no mistake about it, the froth in the U.S. housing market is about...

September prepays down considerably.(Federal National Mortgage Association)
October 10, 2005... The October FNMA prepayment report - reflecting September activity - showed overall speeds were down 18% and 30-year FNMA discounts slowed significantly by more than 20%. The 15-year sector showed comparatively less declines, with 2003 15-year...

Rising rates fuel servicer MBS selling.
October 10, 2005... The first part of the week saw better selling - especially in 5.5% coupons- as the 10-year yield backed up towards 4.40%. Servicers, in particular, were actively selling 5s to move up in coupon or out of the sector. Originator selling held to...

Fannie Mae headline risk to have a muted impact on MBS.(Mortgage backed securities)
October 10, 2005... Although Fannie Mae was scheduled to meet its excess capital requirement set by the Office of Federal Housing Enterprise Oversight - potentially allowing the firm to slow portfolio reduction - the recent unveiling of alleged new accounting...

Tooling into market, Mexico's Tribasa prices toll-road deal.(Residential Mortgage Backed Securities )
October 10, 2005... A toll road deal tooled into Mexico's domestic market last week. Placement agent Interacciones led a transaction totaling 195 million inflation-indexed units ($65 million) for the stretch of highway linking the cities of Tenango and Ixtapan de...

Jersey's new netting law sets the record straight.
October 10, 2005... Jersey's new bankruptcy law provides greater certainty to parties of structured finance transactions that will help the island maintain its position as one of the top European jurisdictions for capital markets structuring. Transactions...

For Belgium and Italy, delinquency spells opportunity.
October 10, 2005... Belgium is expected to market a 500 million ($596 million) delinquent tax receivables deal before year-end, joining a growing list of government securitizations that are expected to come to market before the end of the year. Italy this...

U.K. whole business ABS protected from Spectrum ruling.(asset backed securities)
October 10, 2005... The recent Spectrum Plus ruling poses little threat to U.K. whole business ABS, say Fitch Ratings analysts. "While overall, the ruling could impact loss given default it will not impact probability of default and therefore will not affect...

GHLC plays part in record year for Japan.(Government Housing Loan Corp.)
October 10, 2005... Japanese securitization issuance at the end of the third quarter reached 5.4 trillion ($47.4 billion), according to Merrill Lynch, exceeding the total for the whole of last year. Comfortably the single largest contributor to this total is the...

StanChart issues synthetic CLO.(collateralized debt obligations)(Brief Article)
October 10, 2005... Standard Chartered launched a $121.5 million partially funded synthetic CLO last week. The bank, listed in Hong Kong and London, says the deal is part of a portfolio management program designed to boost liquidity and increase its origination...

Korea's Hana bank disciplined for fraud.(Brief Article)
October 10, 2005... Reports emerged last week that Korea's Hana Bank has been severely disciplined by the country's financial regulator, Financial Supervisory Service, for offering false guarantees on a W19 billion ($19 million) private placement it issued last...

Whispers.(Fitch Ratings hired Vincent Matsui as a senior director )(earnings of MGIC and Harley-Davidson Inc.)
October 17, 2005... Fitch Ratings hired Vincent Matsui as a senior director in its CDO asset manager ratings group. In his new position, Matsui reports to Senior Director Said Rafat, who heads Fitch's CDO asset manager rating group. Prior to Fitch, Matsui worked...

Northern Rock unloads first-loss positions.
October 17, 2005... Northern Rock's plan to sell the majority of its first loss positions from outstanding RMBS deals should greatly improve the mortgage lender's capitalization and has prompted Standard & Poor's to assign a positive outlook for its A' rated...

Citigroup bids for outstanding bonds.(Brief Article)
October 17, 2005... Citigroup Global Markets commenced a cash tender offer for certificates issued by Citibank Omni-S Master Trust, formerly Sears Credit Account Master Trust II, for $4.2 billion of certificates outstanding, according to data from Merrill Lynch....

Delphi hits European synthetic CDOs.
October 17, 2005... Auto parts supplier Delphi Corp.'s bankruptcy is expected to add some pressure on European CDO ratings in the near term - but the impact is expected to be largely felt on the synthetic side, said market analysts. Standard & Poor's said...

CapOne first prime credit card trust to feel bankruptcy sting: More likely to follow...(Capital One Financial)(Brief Article)
October 17, 2005... Net chargeoffs in the credit-card trust of Capital One Financial increased in September, in what some are calling the first signs of fallout from the spike in bankruptcy filings wrought by the Bankruptcy Reform Act, which was officially enacted...

ABS primary generates $19 billion.(Asset backed securities)
October 17, 2005... The U.S. ABS primary market swelled to $19 billion last week after two relatively cool weeks of issuance. The largest deal to price on the week was a $3.85 billion global MBS deal from the Bank of Scotland's Mound Financing vehicle led by...

CLO managers rush to amend spread restrictions.(Collateralized loan obligation)
October 17, 2005... Collateralized loan obligation spread tightening has been so dramatic, particularly in subordinate tranches, that an increasing number of CLO managers are seeking to lower weighted average spread requirements within their portfolios, according...

CRE CDOs continue performing well.
October 17, 2005... Demonstrating strength against both mother nature's wrath of hurricanes and father capitalism's M&A activity, CDOs backed by commercial real estate assets continue to show strong performance, according to Fitch Ratings. In fact, the number of...

Fortis prepares first U.S. CDO.(Collateralized debt obligations)
October 17, 2005... A little more than a year after European financial services giant Fortis Group launched its structured finance and CDO initiatives within the U.S., the company is preparing to issue its first CDO. Fortis Investments USA - the subsidiary of the...

U.S. cash, synthetic CDOs may be affected by Delphi.(Collateralized debt obligations)(Brief Article)
October 17, 2005... The bankruptcy of Delphi Corp., the largest U.S. auto parts manufacturer, is expected to have some impact on U.S. synthetic and cash CDOs, according to a report issued last Thursday by Moody's Investors Service. Any subsequent rating...

GSEs embrace option ARMs and I/Os.
October 17, 2005... Agency ARM issuance surged in September, jumping to $23.8 billion in September from $14.3 billion in August - the highest monthly issuance level ever recorded, according to Merrill Lynch analysts. Much of the growth could be attributed to...

Home sales remain robust all around.
October 17, 2005... Near-term housing indicators remain at historically elevated levels as evidenced by the National Association of Realtors' upward revision of its home sales forecast last week. The Mortgage Bankers Association also projects increased home sales...

Eurostat targets next Greek tax package.
October 17, 2005... While Eurostat is back at the drawing board for government related deals that could lead to a change in data reporting for some member states, new transactions continue to come to market. The two tax package securitizations that already form...

Morgan Stanley Eloc deals in the works.
October 17, 2005... CMBS volumes have passed unprecedented levels and look likely to mass more volume before the year comes to an end. Morgan Stanley is looking to issue two new deals from it ELoC program, both of which will be backed by low-leverage...

Brazil's CVRD edges towards A-list, securitized deals upped too.
October 17, 2005... Brazilian iron ore producer Compania de Vale do Rio Doce (CVRD) has scaled one step closer to the A-list. Shortly after Standard & Poor's assigned BBB' for both the local and foreign currency ratings on the corporate last week, the agency...

Brazil's domestic market has Motorola's number.
October 17, 2005... The local unit of Fortune 100 telecommunications monster Motorola Inc. is scheduled to roadshow this week a receivable investment fund (FIDC) worth around R$400 million ($176.7 million), with regulatory approval to upsize it to R$540 million...

Mexico's Profrezac to refinance, Infonavit downsizes.(Brief Article)
October 17, 2005... Following in the track marks of Tribasa, highway operator Grupo Profrezac aims to drive a securitization into the market. The issuer is readying up to Ps1.35 billion ($123 million) of 15-year notes backed by toll road revenue, according to a...

CapitaMall breaks $1 billion mark.
October 17, 2005... Real estate investment trust CapitaMall Trust, established in 2002 by Singaporean property group CapitaLand, has launched the fourth CMBS from its Silver Maple Investment Corp. medium-term note program. The latest deal, which at closing will be...

Thai mortgage lender announces offering.
October 17, 2005... Thailand's Government Housing Bank announced plans last week to raise THB30 billion ($731.6 million) by securitizing part of its mortgage portfolio, as part of a THB124 billion program to fund the expansion of its loan business. Aside from the...

Activity stirs in Malaysia, Korea, China.
October 17, 2005... Standard Chartered will now handle arranging duties for Samsung Card's auto loan ABS, due next month, according to sources. The Korean consumer finance entity originally selected The Royal Bank of Scotland to handle the offering, after being...

Whispers.(Cadwalader, Wickersham and Taft appoints Robert Davis Jr. as partner)(Countrywide Securities appoints Brett Fitzgerald)(BNP Paribas appoints John Lennon)
October 24, 2005... The Bond Market Association announced the formation of a new Asset Managers Division, which will focus on the interest of the fixed-income investor community. The new division is an outgrowth of the Asset Managers Forum, or AMF, a group of...

Is Refco a sign of things to come?
October 24, 2005... While the tangible effect of actual losses in CDO portfolios due to the presence of Refco Inc. loan and bond collateral is in large part minimal, perhaps the largest losses to be faced within the CDO market stem from what could trigger a turn...

A REIT good time in Asia.(Real estate investment trusts)
October 24, 2005... The REIT business has long been a fruitful source of securitization activity in the U.S., Australia and Japan. In the ex-Japan Asia market, however, CMBS deals off the back of REITs have been non-existent outside of Singapore, which has seen...

IMN vs. ASF; Round III.(Information Management Network)(American Securitization Forum)
October 24, 2005... For the past two years, the industry's two winter conference events, Information Management Network's ABS West, and the American Securitization Forum's annual ABS conference have gone toe to toe, with IMN proving the significantly larger draw....

GMAC news pleasant surprise to market.(sale of General Motors Acceptance Corp. to Bank of America Corp., HSBC Holdings and GE Capital)
October 24, 2005... The announcement that General Motors Corp. is exploring the sale of a controlling stake in its financing arm, General Motors Acceptance Corp., had ABS market participants speculating about the possible impact a sale would have on its...

Moody's: ABS upgrade-to-downgrade ratio on a record pace.
October 24, 2005... U.S. ABS upgrades outpaced downgrades in the third quarter for the first time since 3Q01, according to a report by Moody's Investors Service. accounting for 114 of the 175 ratings actions throughout the quarter, with downgrades dropping off 38%...

$13 billion in new issues hit U.S. ABS market.
October 24, 2005... The U.S. ABS primary market played host to $13 billion in new issues last week, as the market came alive again after a series of holiday-interrupted weeks and a mild, early-autumn slowdown. As the market digested news of another quickly forming...

Natural gas compressor deal makes way to market.(Universal Compression Inc.)
October 24, 2005... First-time issuer Universal Compression, Inc. was set to price the first deal backed by leases on natural gas compressors the ABS market has seen to date. The $200 million, 144A deal, Universal Funding 2005-1, was being led by Wachovia...

Sprint Internet distribution license deal shopped.(Wirefree Partners LLC)
October 24, 2005... Wireless broadband service provider Wirefree Partners LLC is shopping a $138.5 million securitization of distribution licensing payments due the company from Sprint Nextel Corp. over at least the next 10 years. The series 2005-1 transaction,...

Usual suspects trigger 3Q05 CDO rating actions.(Collateralized debt obligations)
October 24, 2005... The third quarter report card for U.S. CDOs released last week by Standard & Poor's, showed some expected strengths - located in the high-yield corporate bond and loan sectors - as well as the usual weaknesses, such as later vintage MH...

ABCP issuance rises as autos, CDOs, look for financing.(Asset-Backed Commercial Paper)(Collateralized debt obligations)
October 24, 2005... As an increasing number of companies look to structured products for funding, and short-term rates continue inching higher, ABCP issuance continues growing. As of the second quarter, U.S. ABCP outstandings reached $630.7 billion, a 5.1%...

Teaser rates proving draining.(Brief Article)
October 24, 2005... Despite increasingly strict rhetoric from the Federal Reserve, near-record mortgage volume continues to be sustained by low initial teaser rates. But subprime mortgage lenders probably won't be able to afford the game much longer. As of...