Asset Securitization Report articles from October 2006

Asset Securitization Report archives from October 2006

Whispers.
October 2, 2006... Investment bank Friedman Billings Ramsey says it will exit the mortgage-backed securities (MBS) underwriting business, after years as an also-ran for home equity loan securitization deals. "We are exiting the mortgage ABS underwriting...

Home is where the deals are: LatAm Domestic Market Still on Top.
October 2, 2006... NEW YORK - At Moody's Investors Service Seventh Annual Latin American Securitization Briefing, a shared story emerged among participants. In a nutshell, it was that domestic markets are flexing their muscles, while their cross-border cousin is...

ISDA unveils new CDS protocol.(International Swaps and Derivatives Association)(credit default swap )
October 2, 2006... The International Swaps and Derivatives Association last week unveiled a protocol that will allow cash settlement across a broad spectrum of credit derivative products - including single name index tranches and plain vanilla credit derivatives....

CapitalSource issues mega-CLO.
October 2, 2006... Commercial loan provider CapitalSource has priced its most flexible ABS transaction to date, a $1.5 billion revolving cash flow CLO. Backed by mainly senior secured commercial loans, plus subordinate middle-market loans, the CapitalSource...

Maxim rebounds from Chau departure with new team.(service introduction of Collateralized debt obligations)
October 2, 2006... Maxim Group is preparing to bring its first CDO to the market following the departure several months ago of its CDO group head Wing Chau. Maxim shelved its CDO group, Maxim Advisory, after Chau and several key staff members left. Now, under the...

Market raises brows, widens spreads at conspicuous absences.
October 2, 2006... Far from going quietly into the night, the third quarter of the ABS market came to a close with a final week that saw slightly wider HEL spreads and the absence of Fitch Ratings from a stream of home equity loan ABS deals. Market players...

Fitch: CRE CDO upgrade pace likely to slow.
October 2, 2006... Driven by investor demand and the availability of new structures, commercial real estate CDO issuance has reached nearly $30 billion so far this year, compared to only $14.5 billion in 2005 and $6.4 billion in 2004. While the sector has...

Carlyle closes ninth high yield fund, pace to continue.
October 2, 2006... Still on a roll in the world of CLO issuance, private equity firm The Carlyle Group announced the close of its ninth U.S. high yield fund last week Carlyle High Yield Partners IX (CHYP IX). "This fund was very well received," said Linda...

Moody's tweaks catastrophe bond methods to include wider swaths of disasters.(service introduction of Moody's Investor Service)
October 2, 2006... Perils associated with natural disasters have become more intense since 1997. Just as the insurance-linked securities sector has adjusted to these changes by developing new structures to absorb risks associated with such events as winter/ice...

Bear Stearns: Leveraged loan performance remains robust.(reports of Collateralized loan obligations and Collateralized debt obligations)
October 2, 2006... CLO and leveraged loan spreads are expected to remain at or near tights as credit fundamentals in the corporate sector remain robust against a backdrop of deterioration within the U.S. housing market, Bear Stearns analysts wrote last week. ...

Mortgages struggle on higher volatility, selling and convexity hedging concerns.(Mortgage backed securities)
October 2, 2006... Mortgages were pressured last week by better selling, higher volatility, and jitters about convexity hedging. Mortgages' September performance has now dropped into negative territory, according to Lehman Brothers data. Month-to-date through...

Prepayment analysts adjust their projections in premium coupons.(prepayment projections)(Brief article)
October 2, 2006... With the continuing rally that has brought the 10-year Treasury to below 4.60%, mortgage rates down nearly 50 basis points from July's high, and refinancing activity finally showing response to the improved rate levels, revisions are starting...

Both GSEs see contraction in retained portfolios for August.
October 2, 2006... In their August summaries released last week, Freddie Mac and Fannie Mae reported negative growth in their retained portfolios of 6.8% and 7.3%, respectively. These leave their respective ending balances at $707 billion and $726.8 billion. This...

S&P downgrades Metronet deals.
October 2, 2006... Standard & Poor's downgraded two of the London Underground Limited's (LUL) public-private partnership securitizations, taking their ratings to just above junk. The drop in underlying ratings will not directly affect bondholders, although it...

Pricing still stable on the European front.(securities of Porsche Bank AG)
October 2, 2006... The deals that priced over the week were quickly replenished by several new deal announcements made last week. However, the pricing debate is still on and market analysts say they expect to see momentum move in one direction or another. ...

Delta Lloyd issues its first Belgian RMBS.(Mortgage backed securities)(Delta Lloyd Bank Belgium)
October 2, 2006... Underwriters formalized plans for the 1.0 billion ($1.28 billion) debut Belgian RMBS from Delta Lloyd Bank Belgium (DLBB). The lead managers are ABN Amro and Fortis Bank. Sources familiar with the deal said pricing is expected the week starting...

Russia's MDM bank on roadshow for $430m deal.
October 2, 2006... Russia's MDM Bank is approaching its debut in the ABS markets, with a $430 million transaction on roadshow as of last week, according to a source close to the deal. Led by Dresdner Kleinwort Wasserstein and Merrill Lynch, the deal is backed by...

Softbank eyes largest Japanese ABS.(acquisitions and contracts of Softbank Corp.)
October 2, 2006... Japanese telecommunications and internet conglomerate Softbank could next month launch the country's largest ever securitization. According to reports, Softbank plans to raise 1.45 trillion ($12.3 billion) through a whole business...

Astonishingly tight pricing levels for Korean ABS deals.(Asset backed securities)(Brief article)
October 2, 2006... Pricing for two recent Korean cross-border private placement transactions has again left Asian ABS bankers scratching their heads. According to reliable sources, Hyundai Capital priced its three-year $300 million auto-loan ABS at 14 basis...

Australian ABS sees another busy week.(Asset backed securities)
October 2, 2006... It was another busy week in Australia with Members Equity Bank, Resimac and Citigroup pricing or set to price residential mortgage-backed offerings. With the appetite for Aussie paper showing no signs of abating among offshore and domestic...

RCE announces plans to securitize.(Asset backed securities)(RCE Capital )(Brief article)
October 2, 2006... Malaysia's RCE Capital last week confirmed its intention to raise between M$1 billion ($271.2 million) and M$1.5 billion through securitization. The consumer finance company, which specializes in providing loans to civil servants, wants to use...

Whispers.(appointments in securities industry)
October 9, 2006... Wachovia Securities announced last week that Glenn Schultz has joined the firm's structured products research team as managing director and head of ABS and non-agency mortgage research. Schultz, who is based in Charlotte, N.C., reports to Brian...

CLARIFICATION:.
October 9, 2006... In the Oct. 2 issue of ASR, Rocco Capoccia's name was mentioned in the article on Maxim Group. Capoccia is no longer part of Maxim but has been the managing partner at Manchester Square Investment Group, a hedge fund incubator, for all of 2006....

Citigroup nabs top 3Q lead manager spot, as lineup of top five stays intact.(Citigroup Global Markets)
October 9, 2006... The asset securitization market has seen several key changes since the beginning of the year, but that is not at all reflected in the lineup of lead manager rankings. Citigroup Global Markets tightened its iron grip on the title as top lead...

The return of the prodigal asset.(Argentine province Neuquen to sell energy assets abroad)
October 9, 2006... An Argentine province is doing its part to take the country further away from the debilitating crisis that peaked in 2002. Energy rich Neuquen plans to price this Wednesday a $125 million, eight-year transaction backed by oil royalties, the...

New guidelines hit fringe borrowers.(Interagency Guidance on Nontraditional Mortgage Product Risks)
October 9, 2006... Final regulatory guidance for federally chartered bank lenders on so-called non-traditional mortgage products came forth to a relatively receptive market late last month. The guidelines were little changed from those proposed last December. ...

Consecutive holiday weeks slow primary deal flow.(asset backed securities)
October 9, 2006... With the ABS market coming out of one holiday weekend and going into another, plus historical seasonal slowdowns in activity, trading desks were fairly quiet last week. At last tally, market professionals estimated that new issuance would not...

Merrill Lynch leads record-breaking CDO sector.(collaterized debt obligations)(Industry overview)
October 9, 2006... Merrill Lynch dominated CDO underwriting in the third quarter when it managed more than $14.7 billion worth of deals and increased its market share to 18.2%. In the first three quarters of this year, the investment bank has brought a total of...

Reorganization results in GSC Group.(Brief article)
October 9, 2006... After doubling its assets under management and the number of its employees, then consolidating its various businesses into three sectors, Florham Park, N.J.-based GSC Partners has changed its name to GSC Group. The alternative asset...

Rating agency reform signed into law.
October 9, 2006... President George W. Bush signed the Credit Rating Agency Reform Act into law last week, setting in motion substantial changes that could revamp the rating agency business by next year. The law combines elements from the Senate and House of...

Panelists: Mixed macroeconomics keep carry trades popular.(Discussion)
October 9, 2006... NEW YORK-Widespread talk of a meltdown in the U.S. housing market - and the effects it might have on the structured finance market through the RMBS sector - have not diminished the popularity of carry trades in the cash CDO market. Indeed, the...

Limited supply, low volatility yield positive start to MBS week.(mortgage based securities)
October 9, 2006... Mortgages saw a fairly active week with better buying, particularly in the lower coupons, which had cheapened in the previous week on heavy selling from banks. The tone was more supportive than in the previous week, and helped by stable yield...

RBS leads U.S. RMBS underwriting pack.(residential mortgage backed securities)(Royal Bank of Scotland)
October 9, 2006... Royal Bank of Scotland Group overtook Bear Stearns as the top U.S. RMBS underwriter as 3Q06 came to a close, according to data maintained by Thomson Financial. RBS brought nearly $80 billion in deals to market, garnering a 12% market share...

Lehman to add agency hybrid ARMs to U.S. Aggregate Index.(Lehman Brothers)(adjustable rate mortgages)
October 9, 2006... Lehman Brothers recently announced it would include U.S. agency hybrid ARMs as part of the MBS Index beginning April 1, 2007. As of the Sept. 28 close, the U.S. Hybrid ARM Index contained 1,285 bonds with a market value of $321 billion,...

JPMorgan explores hybrid relative value as an alternative to seasoned agency 5/1s.(JPMorgan Securities)
October 9, 2006... In a report released last week, analysts from JPMorgan Securities examined the relative value of hybrids to provide an alternative to seasoned agency 5/1s. Analysts noted that bottom-up money managers are still finding cheap convexity with...

Italy's regional debt could end up on central government's tab.
October 9, 2006... Italy could see its estimated 5 billion ($6.34 billion) of healthcare securitization deals executed by several of its southern regional governments tallied up as on balance sheet debt. That's if Eurostat moves ahead with its recent initiative...

Driving the issue: Auto ABS steps out into the forefront.
October 9, 2006... After a long spate of spotty issuance, a solid pipeline of European auto securitization deals has emerged as part of the big fall lineup. According to Deutsche Bank analysts, the auto ABS market had fallen into near insignificance in recent...

Mexican Navistar units to go cross-border.(Navistar International Corp.)
October 9, 2006... Mexico's financial markets appear to have fully recovered from a bout of political jitters occasioned by contentious June elections. Not only is the pipeline humming with transactions, but at least two of them have novel features. One...

ESF and IMN join forces to host biggest European event yet.
October 9, 2006... The European Securitization Forum (ESF) and Information Management Network (IMN) said last week that they have agreed to co-host the industry's annual conference in Barcelona, representing the biggest event of the year for the pan-European...

Ford looks to tap Asian buyers.(Ford Motor Co.)
October 9, 2006... U.S. automobile giant Ford Motor Co. is looking to issue its first securitization in ex-Japan Asia, reliable sources said. Ford Taiwan Services (FTSL) - a wholly owned subsidiary of Ford Credit, the auto financing division of Ford - hopes to...

Guidance is revised for China's first cross border deal.
October 9, 2006... Price guidance for China's first cross-border CMBS by Macquarie Wanda Real Estate Fund - called Dynasty Assets - has been moved outwards to 75 to 85 basis points over Libor (ASR, 9/18/06). The $145 million deal, arranged by Citigroup and...

Thai ABS goes on despite military turmoil.
October 9, 2006... Anyone who has followed the recent political strife in Thailand could be forgiven for thinking its capital markets would go quiet for a while. After all, the ousting by military coup of Prime Minister Thaksin Shinawatra was hardly an...

Whispers.(Standard Chartered Bank appointed Peter Mack )(Lehman Brothers appointed R. Blake Murphy )(Dewey Ballantine LLP appointed Doron Goldstein )
October 16, 2006... Standard Chartered Bank has hired Peter Mack to work in its alternative investment group, where he will focus on non-performing loan opportunities in Asia. He joins the bank from South Africa's Standard Bank, where until recently, he headed the...

TCW: CDOs set for another year of record growth.(collateralized debt obligations)(Interview)
October 16, 2006... Trust Company of the West's credit mortgage group, led by group managing director Louis Lucido and charged with managing more than $26 billion in assets, recently took time to answer questions on the state of the U.S. housing market, new CDO...

Value of disclosure rules debated.(Regulation AB )
October 16, 2006... Disclosure requirements under Regulation AB (Reg AB) might not be terribly useful to ABS investors for the time being, but in due time, periodic updates might allow investors to conduct meaningful, time-series analysis of ABS issues,...

Bear Stearns buys out Encore Credit.
October 16, 2006... Bear Stearns agreed to buy Encore Credit Corp., the wholesale subprime lending business of ECC Capital Corp., last week, an event that added to a string of consolidations in the subprime lending industry. Earlier this year, the subprime...

Holiday hangover persists, as ABS market squeaks by with another slow week.(asset backed securities)(Market overview)
October 16, 2006... After coming off of an extended weekend, the ABS market had another relatively sedate week of production. By press time, market participants expected about $12 billion in ABS debt to come to market, although slightly more than a third of that...

New CDO asset managers rush to market.(collateralized debt obligation)
October 16, 2006... While the top two U.S. cash CDO asset managers, in terms of outstanding liabilities, defended their territory for the three quarters ending June 30, an influx of new managers - particularly in the CLO space - are beginning to thin the market...

Timber securitization finds its way into the private placement market.(TimberStar)(Brief article)
October 16, 2006... The private placement market - which is currently waiting for a pick up in issuance - was graced with a 144A securitization backed by timber receivables. Merrill Lynch, along with Morgan Stanley, brought special purpose vehicle TimberStar,...

Wilmington Trust launches CDO platform.(collateralized debt obligation)
October 16, 2006... Hoping to profit from the CDO expansion wave, Wilmington Trust Corp. has formed a subsidiary to operate most of its CDO business. The firm recruited from independent capital markets and risk management consultancy and hired its founder and CEO...

Backup in rates attracts buying in mortgages.
October 16, 2006... Mortgages saw active two-way flows last week. Of particular note was a pickup in originator selling as the market continued to back up following strong upward revisions made to employment and comments from the Federal Reserve minutes saying...

Barclays analysts talk about seasoning with a twist.
October 16, 2006... In a recent report, Barclays Capital analysts talked about 22 WALA FNCI 4.5 as a security that has seasoning "with a twist." This is in light of mortgage investors concerning themselves about the implications of seasoning for prepayment speeds...

-ST_BY-.
October 16, 2006... (c) 2006 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved. http://www.asreport.com http://www.sourcemedia.com

Basel II could mean changing CDO landscape.(collateralized debt obligation)
October 16, 2006... As European banks and the broader financial markets situate themselves for the impending implications of Basel II, market participants are noting - and speculating on - a number of changes to come within the growing CDO sector. European...

Argentina's Neuquen pierces, but doesn't topple, barrier.
October 16, 2006... Neuquen broke through a wall Oct. 11, when the Argentine province priced the first cross-border bond backed by onshore assets from the country in the aftermath of the 2002 crisis. But, judging from the stripe of investors that bought in, and...

Mexico's Infonavit places country's largest RMBS.(residential mortgage backed security)
October 16, 2006... In a persuasive sign that concerns have faded in Mexico over contentious presidential elections, state mortgage agency Infonavit priced the domestic market's largest RMBS ever at a rate lower than a deal the agency issued in mid June, roughly...

European consumer ABS performance continues to weaken.
October 16, 2006... Fitch Ratings announced the launching of its new rating methodology for European consumer ABS transactions that incorporates Fitch's Default VECTOR ABS model. It is the first time that a multifactor Monte Carlo simulation model is applied to...

More issues added to European pipeline.
October 16, 2006... European spreads are proving resilient despite the continued building of ABS paper. "Although deals tend to be oversubscribed, testing the lower levels of pricing has been relatively unsuccessful recently," Commerzbank analysts said. New...

Alliance launches Malaysian CLO.(collateralized loan obligation)
October 16, 2006... Malaysia's Alliance Investment Bank (AIB) last week launched an M$800 million ($216.4 million) primary collateralized loan obligation (CLO), which has a maturity of five-years and will be sold via the Idaman Capital special purpose vehicle. ...

Whispers.(appointments)
October 23, 2006... Merrill Lynch brought to market late last month what is being classified as the first tax exempt CDO. The deal, arranged as a structured tax-exempt passthrough, consists of $418.5 million of senior, mezzanine, subordinate and junior...

Fitch gives birth to Derivative Fitch, new methodologies.
October 23, 2006... Fitch Ratings last week packaged its global CDO and structured credit services into a stand-alone company called Derivative Fitch - a move that is expected to allow the agency's derivatives ratings much needed breathing room from the...

Covered bonds flood Euro market.(Market overview)
October 23, 2006... A high number of newcomers are currently making their covered bond debuts in rapid succession. From the U.K., Yorkshire BS and HSBC are readying the launch of their respective debut U.K. covered bonds programs. From Sweden, Swedish Nordea...

Wisconsin Electric pauses power deal.
October 23, 2006... Wisconsin Electric Power Co. pulled the plug - at least temporarily - on plans to complete a $500 million ABS transaction to finance certain environmental upgrades to its facilities, saying it could not agree with other major players in the...

Pros expect $12B in primary issuance.(Market overview)
October 23, 2006... After a quarter-end push, followed by a two weeks of issuance dragged down by two major holidays, the asset securitization market began to chug back to life again last week. Market players expected primary issuance to hit around $12 billion for...

Sea Containers ABS bonds untouched by bankruptcy.(Sea Containers America Inc)
October 23, 2006... Sea Containers, the Bermuda-based marine shipping container leasing company that filed for bankruptcy protection last week, is struggling with an inefficient capital structure and $467 million owed to more than 20 of its largest creditors, but...

Finding value in derivative tug-of-war.
October 23, 2006... Like gamblers to Las Vegas, investors are pouring into the derivatives markets in the hopes of winning the jackpot - that is, placing the right bet on the ability of U.S. consumers to make their monthly mortgage payments in a slowing housing...

Wachovia: Highly rated CLO tranches a good bet.(collateralized loan obligations)(Survey)
October 23, 2006... CDO notes have generally been a better investment than corporate bond swaps over the past three years, Wachovia Securities analysts said in a research report issued last week. For the study, analysts used a performance analysis based on...

CDO volumes on the rise, BMA said.(Bond Market Association)(collateralized debt obligations)
October 23, 2006... Several factors have led to the significant increase in CDO issuance, including the relatively strong corporate performance and a large supply of loans, along with the increasing size of the investor base and the flexibility provided by...

Mortgages benefit from better market technicals.
October 23, 2006... Mortgages put in a good performance last week aided by better technicals, low volatility and generally tighter swap spreads. According to Lehman Brothers, the MBS Index is up 25 basis points month-to-date. This brings the year-to-date...

Bear Stearns suggests new trust 5.5% IOs for view on HPA.
October 23, 2006... For investors who want to take a view on the housing market, Bear Stearns analysts have suggested moving into new 5.5% Trust IOs. These bonds are the most leveraged instruments to the housing market that are currently available in the agency...

Deerfield to manage first European CLO.(collateralized loan obligations)(Deerfield Capital Management)
October 23, 2006... Deerfield Capital Management is preparing to manage a market value CLO backed by European leveraged loans. The deal is Deerfield's first foray into the European CLO market. The 300 million ($376 million) CLO is expected to price this week via...

Primary digesting deals although belly is still full.
October 23, 2006... With 52 billion ($65.08 million) in the pike and 19 billion expected to price this week, record volumes are the prediction for October. The European ABS market is starting to see some softer spreads in the secondary front, although new issue...

Basel II's impact on ABCP still being considered.
October 23, 2006... LONDON - As European banks get ready for the road towards full implementation of Basel II, the number of ABCP program restructurings for Basle II reasons remain low. This was the consensus at the Moody's Investors Service's and the...

Corporate loan CLOs boost risk transfer volumes for 2006.(collateralized loan obligation)
October 23, 2006... ABN Amro has started marketing the equity tranche for its latest Amstel CLO, which will allow the bank to transfer the risk on a portfolio of investment grade corporate loans worth 10 billion ($12.5 billion). ABN will be sole bookrunner on the...

Deals pour out of Brazil despite dragged out vote.
October 23, 2006... There was a time when presidential elections in Brazil dictated the direction of financial markets. Now things are different. By all accounts, the domestic structured finance arena has been untouched by the first-round presidential vote on Oct....

Russian Standard launches auto loan deal.(Russian Standard Bank)
October 23, 2006... Russian Standard Bank (RSB) will soon hit the market with a 250 million ($313 million) transaction backed by auto loans, in a deal that the originator hopes will further diversify its funding base, thanks in part to slightly higher ratings than...

Russia's MDM prices $403m auto loan deal.(finance)(MDM Bank)(Brief article)
October 23, 2006... Russia's MDM Bank priced, last week, a $403 million transaction backed by auto loans under the name Takanga Car Loan Finance. The leads were Dresdner Kleinwort Wasserstein and Merrill Lynch. A $270.9 million A piece with an average life of 0.92...

First Chinese cross-border CMBS prices.(Macquarie Wanda Real Estate Fund)(commercial mortgage backed securities)
October 23, 2006... Macquarie Wanda Real Estate Fund (MWREF), a joint venture between Australia's Macquarie Group and Chinese property developer Dalian Wanda, last week closed the first cross-border CMBS involving properties located in Mainland China (ASR,...

MBS and ABS win preliminary exemptions from FAS 155.(asset backed securities)(mortgage backed securities)(Financial Accounting Standards Board)
October 30, 2006... The Financial Accounting Standards Board (FASB) lifted a huge burden from MBS and ABS investors' shoulders last week by exempting those bonds from mark to market accounting requirements under FAS 155. Industry participants were concerned that...

Defaults higher in newer subprime.
October 30, 2006... Mortgage loans originated to U.S. borrowers this year and in late 2005 - marked by an environment of slowing home price appreciation and desperate mortgage brokers - are not performing as well as those loans originated in 2003 and 2004. In...

Special Report.(Joseph M. Donovan to retire from Credit Suisse Group)(Brief article)
October 30, 2006... Joseph M. Donovan, a 23-year seasoned expert in the asset securitization business and chairman of ABS and debt financing at Credit Suisse, is planning to retire from the company by yearend. The news took the ABS industry by surprise last...

CFC expands fixed, fee-based biz.(Countrywide Financial Corp. )
October 30, 2006... As the U.S. mortgage market continues its ugly decline, Countrywide Financial Corp. is looking to find profits in other lines of business - particularly those within capital markets. In a move that would further align it with the vertical...

CDO hunger plays role in tighter sub spreads, healthy ABS issuance.(Barclays Capital Inc.)(Residential Funding Corp.)(The Goldman Sachs Group Inc.)(collateralized debt obligations)
October 30, 2006... Market sources expected new issuance to total slightly more than $15 billion last week, thanks in no small part to continued demand for HEL tranches that will feed into CDO transactions. By press time, about a third of expected issuance had hit...

Rated, zero coupon equity structures on the rise.(collateralized debt obligations)(Brief article)
October 30, 2006... As the search for yield continues, both U.S. and European investors are seeking new kinds of exposure to CDO equity tranches. Zero-coupon equity and rated equity pieces in investment grade corporate synthetic transactions are on the rise in...