Asset Securitization Report articles from October 2007

Asset Securitization Report archives from October 2007

Whispers.
October 1, 2007... Moody's Investors Service named new global rating heads. Noel Kirnon became executive vice president responsible for global structured and U.S. public finance ratings. Michel Madelain was named executive vice president responsible for global...

CLARIFICATION.
October 1, 2007... In ASR's Sept. 24 issue, the article on the Hyundai Auto Receivables Trust deal said that both Standard & Poor's and Fitch Ratings rated the transaction's 2007-A series. Moody's Investors Service rated the deal as well. Moody's assigned a...

After Fed Rescue, Real Learning Starts.(trends in financial markets)(Viewpoint essay)
October 1, 2007... Everyone needs a helping hand at some point in life. Such was the case with me when, at four or five years old, I managed to topple a freestanding, double-sided chalkboard on myself while playing in an empty classroom at my local school. I do...

Deals Roll, Slowly, As Sleepy Quarter Ends: A couple of RMBS deals appear, with triple-digit spreads. Consumer ABS dominates.(Residential Mortgage-Backed Security )
October 1, 2007... Largely on the strength of consumer ABS assets, the securitization market slowly cranked out several more transactions last week. Also, while some traders reported better demand across the credit spectrum for ABS paper, a trend developing in...

Turmoil Causes Layoffs at Banks.
October 1, 2007... For several months now, the capital markets have been bracing for layoffs stemming from the downturn in the subprime MBS, CDO and broader ABS markets. Last week, a wave of at least a couple hundred layoffs moved through the MBS businesses at...

Rating Agencies Strive for Clarity in Soured Market.
October 1, 2007... The current joke on the street goes something like this: Do you know what a cov-lite rating is? Well, just the kind of rating the rating agencies were giving - no verification, no due diligence. While rating agencies have taken the heat...

Russian Servicing Modernizes, But Old Habits Die Hard.
October 1, 2007... The swift rise of Russian RMBS has been a shot in the arm for servicing in the country. Leading banks are turning what was once an unsophisticated and highly personalized business model into an industry with the nimble technology and developed...

ARM Resets Might Hit $50B.
October 1, 2007... Industry observers have been bracing for October, when an estimated $50 billion worth of adjustable rate mortgages are going to reset to higher rates. An already beat up market is no doubt jittery about the prospect of a new influx of...

Delinquencies Slow in Sept. Remits.
October 1, 2007... The September remittance reports revealed that conditions in the mortgage market are worsening, although the rate of credit performance dislocation is mostly slowing, according to a UBS report. Delinquency rates in the buckets - 30, 60+,...

Has the Market Raised the Bar on Mortgage Underwriting?
October 1, 2007... For all the dread the collapse of the subprime market has brought to the economy, those looking for a bit of good news have projected a stronger mortgage market on the assumption that lenders have begun tightening their underwriting standards....

FHASecure Pooling Raises Concerns.
October 1, 2007... The new FHASecure program, which was first announced in late August, is now being discussed widely in the MBS market. Countrywide Securities analysts, in their most recent report, talked about the options available for securitizing these...

Bank of England Sets Expensive Rates: BOE auction fails with lender non-participation.
October 1, 2007... Last Wednesday, the Bank of England held the first of four auctions aimed at providing funds at three-month maturity. The auction was for GBP10 billion ($20.15 billion). Despite lingering questions about the bank's motivation, phone lines for...

Market Dynamics Begin to Cause Shift in Mortgage Criteria.
October 1, 2007... As the shockwaves of the subprime debacle continue to ripple through the European structured finance market, U.K. subprime lenders are already applying a lesson learned by reining in their lending criteria. But will it be enough to stave...

Northern Rock's Future Gets Dimmer.(managing the mortgage funds)
October 1, 2007... As rumors of takeover bids continue to swirl, the ability of Northern Rock to continue operating at its current capacity for the foreseeable future is increasingly doubtful. Meanwhile, Fitch Ratings is quick to clarify that it believes the...

MV CDOs Spread Widening Forces Liquidations.
October 1, 2007... As if the structured finance CDO market has not been dragged through the mud already, market-value CDOs appear to be the latest investment vehicle wounded by the lack of liquidity in the mortgage sector. With forced liquidations driving...

MBS Holdback Keeps Market Tame: Merrill's FFMER braves chilly waters; a pair of card ABS and a single auto deal fill the till.
October 8, 2007... Last week, the asset securitization market closed out the third quarter with a thud. Similarly, it opened the final quarter of 2007 with a very dull roar. A mere $2.4 billion in issuance priced by press time, and although issuers were preparing...

Whispers.(Luminent Mortgage Capital Inc. sold it's assets)(AmBank Group launched nonperforming loans)(PMI Mortgage Insurance Co. appointed Dan Nicoll)
October 8, 2007... Luminent Mortgage Capital sold off the assets financed by its ABCP program, eliminating all of its outstanding commercial paper liabilities. The firm has also repaid all of its warehouse lines of credit that were used to finance whole-loan...

LatAm Issuance Gives Signs of Life.
October 8, 2007... The liquidity crunch still has a chokehold on the cross-border EM market. Nothing has come to light since Banco de Credito de Peru closed an Ambac-wrapped deal backed by diversified payment rights (DPRs) via Standard Chartered in early August....

JPMorgan Tops Lead-Manager Rankings For Third Quarter.
October 8, 2007... The third quarter turned out to be a very slow and painful period for the asset securitization market. Issuance was a mere $114.4 billion during the period, which represented a 60% plunge from the same quarter last year, according to...

Capitol Hill Gets Tough on Capital Markets.
October 8, 2007... Repairing the shattered subprime mortgage market is shaping up to be a contentious matter as politicians begin to collide with capitalism. While lawmakers step up pressure for reforms, a complicated debate has begun about what governments...

Citigroup Tops CDO Manager Rankings, Despite Losses.
October 8, 2007... Citigroup Global Markets managed to claim the top position among U.S. ABS CDO managers, according to Thomson Financial, despite a recent announcement that the bank is facing losses on $1.3 billion in pretax subprime MBS collateral, CDO...

Deutsche Launches 'Montage' Feeder Conduit.
October 8, 2007... Outstanding paper in the asset-backed commercial paper market might have pulled back since August, but new vehicles are still cropping up. Deutsche Bank, for one, launched a so-called feeder conduit called Montage Funding recently. The...

4Q Kicks off with Rampant Layoffs.
October 8, 2007... Investment banks unleashed round after round of job cuts in the asset securitization industry last week, and sources say they are bracing for even more layoffs in the coming weeks. Top fixed-income executives at Merrill Lynch took the...

Limited Volume, Better Buying in MBS Week: Wait for employment report holds down early volume,money manager and foreign central banks buy 6s.
October 8, 2007... MBS performance is off to a positive start in October. Lehmans MBS Index records 18 basis points in excess return in the first two days of trading. This compares to -3 basis points in the ABS Index, +2 basis points in the CMBS Index and +8...

Lehman Takes Top RMBS Manager Title, Issuance Declines.
October 8, 2007... Overall market conditions were challenging in the RMBS sector, but Lehman Brothers managed to improve its standing, claiming the top position among U.S. RMBS managers for the first three quarters of the year. Lehman outsold second-place...

Market Ponders Life for Granite After Northern Rock.(Northern Rock PLC)
October 8, 2007... The embattled U.K. bank, Northern Rock, is living on borrowed time. All signs point to a takeover, even if the bank itself continues to send out mixed signals and is rumored to have appointed an administrator in the event of a breakup or a...

Secondary European ABS Sizzles, Primary Fizzles: Investors test waters as market begins comeback; market gets by with help from secondary trading.
October 8, 2007... The European primary market remains practically at a halt, with limited deal flow seen since the market reopened after the August break. It is unclear if issuers will brave the market in October, but some market players are hoping that the...

Whispers.
October 15, 2007... New-York based REIT Cypress Sharpridge Investments plans to raise up to $142.8 million in an IPO of 18 million shares. In a filing with the Securities and Exchange Commission, Cypress said it expects the offering to price between $7 and $8...

ABS Market Begins to Regain Footing: Investors, armed with newer sources of liquidity, go bargain hunting; AAAs prevail amid credit tiering.
October 15, 2007... Production volume in the securitization market was low last week, as market participants came off of the third quarter's end and a holiday weekend. Still, distressed-debt funds and choosy investors kicked up enough dust to let the market know...

Tranched LCDX Hits the Market.
October 15, 2007... Independent data and trade processing firm Markit launched the first tranched LCDX last Wednesday, with market players forecasting that a new crop of investors would take an interest in the product and create liquid trading conditions. "We...

In from the North: Covered Bonds.
October 15, 2007... The Royal Bank of Canada is preparing to issue a 15 billion ($21 billion) covered bond program to finance a pool of mortgages. The Global Covered Bond Programme represents the first issuance of covered bonds backed by Canadian assets. ...

UnifiedMarket Offers IOI Forum for Illiquid MBS and ABS.
October 15, 2007... When the asset-backed - and especially the mortgage-backed - securities markets came screeching to a halt over the summer, market participants were afraid to post bids and offers on the often highly illiquid securities because no one knew their...

Rising Arrears Show Signs of Trouble in Spain: Spanish housing market expands to risky borrowers, growth in home prices weaken.
October 15, 2007... Industry analysts are seeing signs that the slowdown in the Spanish housing market is beginning to leave its mark on Spanish RMBS deals. A report published by Fitch Ratings last week said that the slower growth in house prices weakened the...

U.K. Nonconforming RMBS Falls.
October 15, 2007... Market players have raised the red flag on U.K. nonconforming RMBS. Recent developments in the market - namely the summer credit crisis and teaser rates set to expire at the end of 2007 and beginning of 2008 - are some of the factors that have...

Brazil IPOs slow personal loan ABS, but conditions are turning.
October 15, 2007... The collateralization of Brazilian personal loans, a locus of growth for securitization in the country, slowed down in the first half of the year from the second half of 2006. But the current market circumstances, should they linger, could...

Kazakh's TuranAlem DPR fails to dispel gloom.
October 15, 2007... The press release on a $750 million deal from Kazakhstan's Bank TuranAlem trumpeted the issuer's approach to "an entirely new investor base", but a few sources close to the deal said it was placed privately, and at least one acknowledged that...

Europe Begins Picking Up the Pieces After the Fall.
October 15, 2007... In Europe, daylight saving time may not end until the last week of October; nonetheless the continent's asset backed securitization market may have already suffered through its darkest hour. Investors have cautiously returned, and investment...

Third Quarter 2007 Guarantor: Monoline Cash Cushions, Outlooks Withstand 3Q Storm.
October 15, 2007... The turmoil in the subprime market has spared no one, including monoline insurers that have traditionally kept their attachments to the triple-A level. To that end, a couple of rating agencies have expressed concern as to whether the industry's...

CDO Market Stalls, Spreads Tighten for CLOs.
October 15, 2007... Liability spreads in the ABS CDO market may continue to push out as issuance remains at a standstill. But with the pickup in new deals in the CLO sector, similar widening appears to have ended with the third quarter. While one CLO analyst...

ABS Pioneers Launch Web Venture.
October 15, 2007... Securitization pioneers Lewis Ranieri and Marcia Myerberg are back in the mortgage finance world with a new venture, an Internet business that links consumers directly with mortgage lenders, thrifts and commercial banks, bypassing mortgage...

Subprime Loan Mods Slow to Happen: With two million ARMs due to reset in the coming year, some question how many borrowers will be helped.
October 15, 2007... A month after the Federal Reserve and other banking regulators encouraged lenders to help troubled borrowers avoid foreclosures through loan modifications, doubts are growing as to whether these programs can actually help substantial numbers of...

Positives Emerge in MBS Market.
October 15, 2007... Last week's MBS flows started off slowly, but a lack of subprime tape bombs and improvement in rolls and financing helped improve production as the week progressed. Tuesday's return from the Columbus Day holiday saw slightly below normal...

Buyout Firms Find Value In Troubled Subprime Market.
October 15, 2007... Even though this summer's credit crisis effectively brought an end to the buyout boom, private equity firms and investment banks are still looking to capitalize on the fallen subprime market. Some well-known asset management firms have...

Whispers.
October 22, 2007... Laura Schwartz, senior managing director of ACA Capital and chief operating officer of ACA Management, responsible for the company's CDO asset management platform, has left the firm, according to market sources. Calls to Schwartz were not...

ABS Barely Makes Showing: Credit card, student loan ABS pulls tighter, but there is talk of autos lagging.
October 22, 2007... The securitization market completed about $9.8 billion in transactions during the last two weeks, according to data from UBS. Although that amount is a fraction of what is normally issued in any given two-week period, traders and issuers appear...

Synthetic CDOs in Europe and Downgrades Injure ABS CDOs.
October 22, 2007... New issuance in the U.S. CDO market remains dormant amid continued ratings instability. But the center of gravity seems to be moving east for CDOs as an increasing number of transactions are popping up overseas, particularly synthetic...

Bear Stearns Under AG Scrutiny.
October 22, 2007... The Brooklyn U.S. attorney has started an investigation into the collapse of the two Bear Stearns hedge funds - its High Grade Structured Credit Strategies Master Fund and its High Grade Structured Credit Strategies Enhanced Leverage Master...

MBS Struggles as Housing Fears, Subprime Worries Pick Up.
October 22, 2007... Last week, mortgages struggled on the return of negative subprime and housing news that led to a flight to quality bid in Treasuries, and a sharp uptick in volatility. Increasingly disturbing news regarding the housing market has increased the...

States Weigh Legal Action Against Lenders: Ohio, Massachusetts among states accusing lenders of deception.
October 22, 2007... State attorneys general are stepping up the legal pressure on the mortgage industry, but it is unclear whether their response to the subprime market fallout will actually lead to a glut of lawsuits. At the forefront of the legal battle...

Industry Warms to New Ginnie Pool.(United States. Government National Mortgage Association)
October 22, 2007... Ginnie Mae's new multi-issuer pool type has received positive reviews since it was announced on Oct. 15, as the program appears to have tempered investor concerns that the new securitized loans would be a drag on the current programs. The...

Origination Declines Seen Ahead.
October 22, 2007... Purchase and refinance mortgage originations could decline by as much as 33% over the next two years, as the full impact of the sub-prime credit shock and fallout is not yet seen as bottoming out in the immediate near term, says the Mortgage...

Questions Abound After M-LEC.
October 22, 2007... About a month ago, amid the turmoil that caused about $80 billion in securities to evaporate from the structured investment vehicle (SIV) market, Moody's Investor's Service suggested that bank sponsorship might make the difference between...

What M-LEC Will Do for Europe: The conduit may be a short-term savior for SIVs.
October 22, 2007... Liquidity relief in the U.S. may not translate across the Atlantic, and analysts in Europe have begun positing how Europe would benefit from the $75 billion master liquidity enhancement conduit (M-LEC), set up primarily by Bank of America,...

Sullivan Urges Caution on Pending Risks in Euro RMBS.
October 22, 2007... The recently appointed head of capital markets at PMI Europe urges caution in the European asset-backed sector, as the industry begins slowly to return to form. Richard Sullivan, a former Dresdner Kleinwort investment banker who moved into the...

European Covered Bonds Expand and Get Attention.
October 22, 2007... Recent woes in the European asset backed market do not appear to be contaminating the covered bond market, according to analysts and ratings agencies. In fact, the market is growing so strong that England will see its first, dedicated covered...

New Playbook For Monolines in Mexico.
October 22, 2007... For monolines in Mexico, the rules of the game have changed. Last month, FSA, and shortly thereafter MBIA, announced that they had secured licenses to provide wraps locally. Prior to that, FSA and MBIA - like others in the field - had to...

Whispers.
October 29, 2007... Departures continue at Morgan Stanley, apparently. Michael Dubeck, co-head of the bank's residential fixed-income unit left the bank recently, according to market sources. Sources said Bruce Witherell, managing director and co-head of the U.S....

Market Stillness After Consumer ABS Absorbed: Talk circulates of BMW, one other auto ABS deal; just $4 billion in pipeline by midweek.
October 29, 2007... Early in the asset-backed securities production week, issuance was so slow that one trader said he thought investors had already snatched up whatever attractive paper was on the table. "Consumer ABS supply has been absorbed. There is...

Cohen Shops Latest ALESCO Trups Deal in Illiquid Market: Credit slump could cut profits on Trups CDO; market predicts Cohen may be trying to create liquidity in dry market.(Cohen and Co. (Hollywood, Florida))
October 29, 2007... Cohen and Co. is in the market with a $408 million cash-flow trust preferred CDO, ALESCO Preferred Funding XVII. The deal will be the 22nd trust preferred transaction completed by Cohen & Company Financial Management and its affiliates, but it...

Could Basel II Have Shortened SIV Woes?
October 29, 2007... WASHINGTON - Almost as soon as the news broke that some of the largest U.S. banks had agreed to create a fund to relieve problems in the commercial paper market, proponents of the Basel II capital accords began arguing that the situation would...

IMN Survey: Bigger Impact From Subprime.(Survey)
October 29, 2007... No surprise here: ABS East Conference delegates are concerned that the weakness in the subprime mortgage market is expanding to affect the overall market for securitized assets, according to an Information Management Network survey. ...

Bad News in October Remit Data.
October 29, 2007... As of press time, remittance data was out for 19 of the 80 ABX reference deals and not surprisingly October brings more headaches to the mortgage market. For all four indices, the average size of the monthly increase continued to grow, Deutsche...

Primary Market in Europe Gets Moving Again: Deutsche's pan-European CMBS and Eurosail's RMBS gets things moving, but production still not back to normal.
October 29, 2007... The primary market in Europe is beginning to show signs of life after a months-long slump, but the new movement hasn't been enough to lift the mood entirely. Pundits say that the market is still far from being active and more important,...

Cheyne Finance Finds Other Hero.
October 29, 2007... While details of bailout structures, such as the U.S.-based M-LEC, or Super SIV, have been slow to surface, problems persist on the SIV front. The latest casualties come via the London-based hedge fund manager Cheyne Capital's Cheyne Finance...

U.K. Lenders Show Vital Signs.
October 29, 2007... With the wholesale market still closed for much needed funding opportunities, U.K. market players remain cautious about what fallout other U.K. mortgage lenders may face. With one of the U.K.'s major player's, Northern Rock taking such a major...

BofA's Structured Products in Limbo: Third-quarter profit drop will lead to massive layoffs and bigger questions.(Financial report)
October 29, 2007... Bank of America's steep 32% third-quarter profit drop has led to a shakeup in leadership and a reported plan for massive layoffs. Now it remains to be seen what becomes of the bank's structured products business, which is reeling from the...

Countrywide Will Restructure Troubled Loans.
October 29, 2007... Countrywide Financial Corp. has teamed up with one of its most relentless critics to launch a new program intended to help thousands of borrowers restructure their loans and save their homes. Countrywide, which announced the bailout program...

In MBS, Convexity Buying Increases.
October 29, 2007... Mortgages experienced overall better buying in normal-to-above-normal volume in the first half of last week. Contributing to this on Monday and Tuesday was a lack of data and big headline news that led to intraday backups in yields and some...

Bright Skies, Bright Future for Utility ABS: Energy needs are evolving, and a new slate of deals demonstrates that securitization is not far behind.
October 29, 2007... Utility companies once turned to the securitization industry to recover what it called stranded costs - actually stranded profits - as they surrendered monopolies in their respective markets through mandatory deregulation. Many of those...