Asset Securitization Report articles from September 2003

Asset Securitization Report archives from September 2003

Whispers.
September 8, 2003... Barclays Capital has hired Ekaterina (Katya) Aleksandrova to work in its term ABS structuring group, reporting to managing director and group head Michael Wade. Aleksandrova has worked for the past eight months at recently sold surety provider...

After one year, prodigal son AmeriCredit returns to FSA: And promises continued surety diversity.
September 8, 2003... For the first time in roughly one year, AmeriCredit Corp. offered auto loan ABS backed by a full guaranty from Financial Security Assurance (FSA). In somewhat of a surprise, FSA changed its policy on cross-collateralization across all...

Three more FIN 46 FSPs from FASB: Three more FIN 46 FSPs from FASB: And the Board decided not to scrap its 140 amendment.
September 8, 2003... Last week the Financial Accounting Standards Board published three new FIN 46-related FASB Staff Positions on its Web site. All three are out for comment until Oct. 3. The most controversial of the pack address the so-called "kick-out"...

CIFG might take on MBIA in Brazil future flows.
September 8, 2003... MBIA might soon face competition in Brazil, as CDC IXIS Financial Guaranty (CIFG) is heard sniffing around for future flows transactions from the Latin giant. "It would make sense that [Brazilian future flows] would be their first port of call...

U.S. ABS market calm before storm.
September 8, 2003... The U.S. ABS market returned to the office for last week's holiday-shortened session to see just $5 billion of new-issue supply hit. After what was a fairly slow end of August, the primary market is expected to pick up significantly throughout...

Issues and topics lined up for BMA CDO gala.
September 8, 2003... September, the hallmark homestretch, is underway and the forces of the CDO market gather together in two weeks for the Bond Market Association's CDO Committee Conference. Consider- ing how these instruments once perched on the brink of...

Clark returns to market with 2nd brokered insurance deal.(Brief Article)
September 8, 2003... Clark Consulting, formerly Clark/Bardes, is prepping its second future flow insurance broker commission financing, a sequel to a $305 million first-of-its kind transaction last year, via Bear Stearns and Banc One Capital Markets. The firm...

Correction:.(Correction Notice)
September 8, 2003... In the 8/18 issue of ASR, a story on Korean ABS mistakenly referred to Samsung Life as Samsung Capital.

Tobacco bonds are getting to be a real drag But many investors still like their smokes.
September 8, 2003... Like teens sneaking cigarettes in a high school bathroom, institutional investors who own tobacco bonds seem confident of their continuing health - despite what appears to be cancerous headline risk and the dangers that prompted another ratings...

Niche shop Gryfon gaining traction: Hedge fund seen in 2004.
September 8, 2003... Gryfon Partners, a relatively new niche shop specializing in investing in higher risk opportunities within the asset-backed market, has steadily gained ground throughout the year, sources said. Spurred by buy-side interest, the next step for...

ABS lenders hit the streets.
September 8, 2003... If you missed last Monday's West Indian Carnival parade in Brooklyn, NY, then you missed out on Delta Funding Corp.'s banner float, which featured an oddly appealing, triangular-shaped mascot named "Ms. Mortgage." Delta commonly taps the...

Two-way flows return after two-week summer break.
September 8, 2003... Mortgage flows picked up after a two-week slowdown related to the traditional summer doldrums. Originator selling averaged between $1 billion and $2 billion per day. At the same time, investor activity was mixed with heavy selling noted from...

Prepay speeds seen slowing in the next three months.
September 8, 2003... The sharp rate backup has changed the mortgage market from one in which almost all mortgages were refinanceable to one in which fewer than half are refinanceable. In this scenario, investors are asking how slow can speeds get if rates hold. ...

Market lauds proposed GSE regulatory changes.
September 8, 2003... With changes amuck in mortgage land, market participants are now evaluating the potential impact on the market. Specifically, Congress is proposing to shift regulatory authority over the two GSEs - Freddie Mac and Fannie Mae - from the...

Santander moves onto Mexico in peddling sweets: Dipped in Nestle, deal replicates Brazil transactions.
September 8, 2003... Already familiar to Brazil's domestic market, a financing vehicle for construction company Grupo Walter Torre is taking root in Mexico. "It's nearly identical to the deals done in Brazil," said a source close to the transaction. Spanish bank...

El Salvador deal breaks Brazilian vise-grip on future flows.
September 8, 2003... Finally, a cross-border Latin deal that is not Brazilian. Following a rash of future flows transactions from the region's largest country, El Salvador produced a US$125 million bond backed by diversified payment rights (DPR). Led by Citigroup...

Mexican pipeline sees good flow and asset mix.
September 8, 2003... August was anything but slow in Mexico, as three new issues hopped into the already hopped-up pipeline. State credit agency Fonacot has slated its first visit to the public market for Ps500 million (US$46.1 million). The company provides...

Taiwanese potential picks up again.
September 8, 2003... In the last few weeks, activity in the Taiwan market has picked up. The SARS virus was one of the key reasons for the slowdown in the development of the Taiwan market, says Andy Lai, managing director and head of the financial engineering group...

A rush until the end.
September 8, 2003... For the past couple of years the European market has been guilty of sifting its largest issues through to the second half of the year. Pair this with a much leaner first half and you have market dynamics that disrupt the supply and demand...

S&P reviews Australian RMBS methodology.
September 8, 2003... Deal performance in the Australian structured finance market had been less favorable in the second quarter of 2003 then the first quarter, according to Standard & Poor's in reviewing the methodology. In fact, in the second quarter the market...

Whispers.
September 15, 2003... Intellectual property securitization firm The Pullman Group LLC is opening a Los Angeles office this week, with the aim of purchasing entertainment revenue streams for the purpose of repackaging them into new securitizations. Pullman will...

DVI breaches three default covenants; investor committee formed Performance, servicing trigger downgrades...
September 15, 2003... Cash-strapped medical finance company DVI Inc. missed the coupon payments on five of its nine outstanding equipment lease securitizations last Friday and breached three servicing covenants, trustee U.S. Bank announced to bondholders. If the...

Wachovia busts into LatAm arena.
September 15, 2003... Bounding onto the Latin American playing field, Wachovia Securities has won a mandate from El Salvador's Banco Agricola for a deal backed by diversified payment rights (DPRs), according to sources. One of the pillar asset classes supporting the...

FDIC embeds early-AM provisions.
September 15, 2003... Patterned after an approach taken by the Basle Committee on Banking Supervision, the U.S. federal regulators are introducing for commentary a new "sliding" risk-based capital charge against revolving securitizations with early amortization...

FGIC sale to PMI sparks protest.
September 15, 2003... A consumer advocacy group is trying to derail the sale of Financial Guaranty Insurance Corp. (FGIC) to investors led by The PMI Group, Inc., citing PMI's ties to the troubled Fairbanks Capital Corp. Matthew Lee, executive director of the...

FASB adds 46-d.(Brief Article)
September 15, 2003... The Financial Accounting Standards Board released a fourth FASB Staff Position last Wednesday addressing fees paid to the decision maker and/or guaranty provider in a variable interest entity, and how this impacts the expected loss or expected...

ABS supply picks up to the tune of $12 bln.
September 15, 2003... As anticipated, the U.S. new-issue ABS market picked up steam last week, pricing $12 billion across the auto loan, credit card and home equity sectors. The field was represented from well-known top-tier issuers, well-known mid-tier issuers and...

Industry group forms grownup education programs.(Brief Article)
September 15, 2003... Last Friday, members of the American Securitization Forum sat before Congress to present the "Securitization Institute," a newly developed educational outreach program that the industry group will use as one of its lobbying tools. Tom...

United Capital brings first new issue.(Brief Article)
September 15, 2003... Secondary market maker United Capital Markets quietly closed its first new issue offering, a $233 million repackaging of structured finance product. Details beyond that were unavailable, except that about $20 million of the apparently non-rated...

Accredited securitization on the horizon.
September 15, 2003... Accredited Home Lenders, which plays in both the debt and equity courts, is pumped for the fourth quarter. Perhaps that's because co-founder Ray McKewon is betting his firm, a subprime lender, will grow despite a rising interest rate...

Boeing 767 aircraft ABS details seen hitting in October: Bonds may not hit until 2006, however...
September 15, 2003... The long-awaited securitization of 100 Boeing 767 aircraft leased to the U.S. Air Force is currently in the structuring process and preliminary details could emerge sometime in October, sources said. The $10 billion-plus transaction needs...

Clark's 2nd CBC Insurance ABS hits the market.
September 15, 2003... As reported in last week's ASR, the second-ever life-insurance commission securitization from Clark Consulting Inc. is out in the Rule 144A market, with pricing seen in the coming weeks, sources said. Led by Banc One Capital Markets' Dallas...

Wachovia releases CDO info tool.
September 15, 2003... Wachovia Securities' Structured Products research team just issued its inaugural CDO Performance Report, a new information tool that incorporates regular updates. Wachovia has led, co-led, or co-managed 60 CDOs since August 1998. It is now...

E2.2 Upgrade next for S&P.(Brief Article)
September 15, 2003... CDO investors and bankers who subscribe to Standard & Poor's proprietary CDO Evaluator are in for a nice surprise. Version 2.2 is set to debut in the coming weeks, the rating agency said. Besides an increase in execution speed, CDO...

Fan and Fred to follow Treasury's lead.
September 15, 2003... Last week Treasury Secretary John Snow and Housing and Urban Development (HUD) Secretary Mel Martinez testified before the House Financial Services Committee about the proposal to increase the safety and soundness of Freddie Mac and Fannie Mae....

Banks are up in ARMs for value.
September 15, 2003... With hybrid ARMs comprising a more considerable share of mortgage production compared to several months ago, analysts are now egging on investors to take advantage of this supply situation and to move into hybrid product for relative value. ...

Mortgages benefit from technicals, T-bills, lower vols.
September 15, 2003... Mortgage flows picked up last week with steady buying seen primarily from money managers, and a bit of interest from the banks as well. At the same time, originator supply remained light with selling averaging around $1 billion per day. In...

CMBS Roundup: Spreads pressured by calendar.
September 15, 2003... The September calendar has a significant number of deals on it, and this is having an impact on spreads. Most recently, the BSCMST 2003-PWR2 deal, led by Bear Stearns, Merrill Lynch and Wells Fargo priced on Wednesday, with triple-As 10-years...

Argentine deals move at a constant trickle, but volumes elusive.
September 15, 2003... After the tidal wave of Argentine defaults last year, foreign investors tuned out the flailing country. This year, issuers have come back, but with the exception of a YPF placement, they have tapped only domestic investors and produced tiny...

In Chile, home (sector) is where the heart is.
September 15, 2003... Thanks to a trio of domestic deals since the end of July, Chile kept moving when activity ground to a halt elsewhere. Two transactions sprang from the housing sector, which would typically be a yawn in a market where real estate structures are...

MBIA returns to first love in Mexico: toll roads.(Brief Article)
September 15, 2003... A little over three months since pairing with a Mexican peso deal, MBIA is again on the make. Sticking with toll roads, the guarantor is providing a surety for the Ps3.6 billion (US$327 million) senior tranche of a total Ps4.8 billion (US$436...

U.K. Housing Association transaction faces administration risk.
September 15, 2003... U.K. social housing securitizations have, up to now, enjoyed exemption from administration risk - where a third party suspends control of a company if its solvency become questionable. Because the social housing deals were believed to be exempt...

Securitization still word of the day for Europe.
September 15, 2003... Picking up fuel and adding names to the pipeline, the Euro securitization market is showing no signs of slowing down. Meanwhile, investment banks are hiring in the sector, according to industry reports. The reports attribute the activity to...

Malaysia picks up with CMBS...(Brief Article)
September 15, 2003... Two groundbreaking first-time deals closed during 2002 in Malaysia's domestic ABS market, including the country's first primary CLO - an RM2 billion (US$0.5 million) transaction involving 25 obligors. The second deal represented the first CMBS...

Draft of new Basle Accord still causing disaccord.
September 15, 2003... There's still plenty of debate among banking industry professionals regarding the latest draft of the Basle Accord, the international bank capital adequacy guidelines that have been in development for several years. One of the latest...

Whispers.
September 22, 2003... United Capital Markets, which will be sponsoring the Margarita Madness event, has announced that hard rock/blues legends ZZ Top will headline the show. ZZ Top is currently on its "Beer Drinkers and Hell Raisers Tour 2003"in support of the...

Was FIN 46 born premature?
September 22, 2003... Less than a year since Financial Interpretation No. 46 was published, it appears the Financial Accounting Standards Board is ready to drill out another Exposure Draft, this one regarding proposed amendments and modifications to the eight-month...

Buysiders still bidding in Europe.
September 22, 2003... European supply for September has already reached the E5 billion (US$5.6 billion) mark, with a number of robust deals continuing to emerge in the pipeline. The market is sailing toward volume projections predicted for 2003. But even with the...

SFA returns to roots Starting new fund.
September 22, 2003... Long-time ABS investment house Structured Finance Advisors (SFA) is moving away from the "flawed models" of the CDO market and will soon launch a new investment find - dubbed the SFA Managed Account Program - which SFA President and founder Joe...

Forensic accountants offer Spiegel autopsy.
September 22, 2003... Though it's been pretty clear for almost a year now that deals from Spiegel Inc.'s banking subsidiary, First Consumers National Bank, were underperforming, news emerged last week from an independent examiner appointed by the Securities and...

Supply overwhelming as HEL ABS remains strong.
September 22, 2003... Although as of press time just $7.3 billion of new-issue ABS supply had priced, a slew of offerings were marketing and slated to price late last or early this week. While home equity supply led the way with $12 billion total making the rounds,...

Metris CCABS tighter on good news.(Brief Article)
September 22, 2003... Metris Master Trust credit card ABS tightened following the news that parent The Metris Companies closed a portfolio sale and a new conduit facility. Metris sold $145 million in accounts and receivables from the Direct Merchants Credit Card...

CDO deal info makes it to mainstream.
September 22, 2003... Rumored to have been in the works for nearly a year, the Bond Market Association announced it was indeed publishing outstanding CDO deal documentation via its new CDO Transaction Library. The confirmation arrived on the heels of the BMA's first...

S&P releases synthetic criteria, notes hybrids.(Brief Article)
September 22, 2003... As far as CDOs go, there is a huge variance between traditional cash and synthetic transactions, although both have found keen interest from investors. The rise in single tranche, or customized, synthetic CDOs this year is a testament to the...

Isabel unlikely to damage CAT bonds.
September 22, 2003... As Hurricane Isabel hit land Thursday, it appeared unlikely that any catastrophe bonds would suffer damage. About $1.29 billion in outstanding CAT bonds are subject to risk from Isabel, said James Doona, a director in the insurance group at...

Technical summary of FIN 46 number two.
September 22, 2003... The board decided to proceed towards the issuance of an exposure draft of a proposed interpretation modifying FIN 46 in the following ways: 1 Providing a limited scope-exception for a reporting entity's interest in a variable interest...

Secondary CDO market maker emerges.
September 22, 2003... Newcomer Fieldstone Capital Group, a broker dealer founded in 2001 by high yield veteran Jonathan Blatt, has spent the past year building up a CDO secondary trading effort. Last week the firm brought on Johnny Srivastava, who was most recently...

Spreads tighter on wide range of investor support.
September 22, 2003... Last week started off with better selling, especially from originators, as investors quietly waited for the FOMC meeting to conclude. Since Friday, Sept. 12, mortgage bankers have sold more than $13 billion. Most of the supply was in 30-year...

Office and industrial loan CMBS may see increased losses.
September 22, 2003... After releasing separate loss and default studies previously, Fitch Ratings last week focused on comparing loans that had experienced defaults and losses in terms of property type. In a press conference held last Tuesday, Fitch analysts...

Is three a crowd for FHLB and the GSEs?
September 22, 2003... In Secretary of Treasury John Snow's recent testimony to the House Financial Services Committee, Snow confirmed the Bush Administration's stance that the Federal Home Loan Banks, along with Freddie Mac and Fannie Mae, should be regulated under...

School's in for Brazilian tuition ABS.
September 22, 2003... The U.S. is a pioneer in an array of assets, but if you want to bone up on tuition-backed deals, you've got to study abroad. Until recently, the only market worth the trip was Chile, which hosted the first two tuition bonds in the region during...

Brazilian securitizer Altere closes inaugural deal.(Brief Article)
September 22, 2003... Established a few months ago by Brazilian private equity firm GP group, Altere Securitizadora is officially open for business. Earlier this month, the agency closed its first deal using an entrenched financing vehicle for construction company...

Yield drops in Argentine consumer loan program.(Brief Article)
September 22, 2003... Argentine consumer deal Consubond XX closed last week. Brought to market by Banco de Valores and Compania Inversora Bursatil, the Ps11.2 million (US$3.8 million) senior piece priced at 9%. The bid-to-offer ratio was 3.5X. "Demand shows that the...

Pricing details emerge on El Salvador's Banco Cuscatlan.(Brief Article)
September 22, 2003... Further details have surfaced on a future flow deal from Central America. Pricing for Banco Cuscatlan's bond backed by diversified payment rights (DPR) came at 87.5 basis points over three-month Libor, according to a source on the...

A closer look at German RMBS.
September 22, 2003... Classes C, D and E under the Provide GEM RMBS structure were downgraded last week by both Fitch Ratings and Moody's Investor Service, echoing investor concerns over the deteriorating credit quality in German residential mortgage pools. ...

EIB considers securitization a boost for EU growth initiative.(Brief Article)
September 22, 2003... Discussions continue regarding the European Union's growth initiative, now expected to reach E100 billion (US$112 billion), mostly via increased investments in Trans-European networks and major research and development projects. And at the...

Asian issuance stuck in a rut.
September 22, 2003... Diane Lam's recent report for Standard & Poor's on the Asian securitization market came to a sobering but not completely dismal conclusion that, although macro financial and economic troubles continue, there are some rays of hope. "Collectively...

Italian NPL boom sheds light on structure.
September 22, 2003... Italy has nurtured the growth of what has become one of the largest markets for non-performing loan securitizations. According to Moody's Investor Services, since implementing its securitization law 130/99, Italy has seen over E31 billion...

Whispers.
September 29, 2003... Sam Pilcer recently started as a managing director in the conduit group at Credit Lyonnais. On Aug. 1, Pilcer left his position as an MD in the asset-backed CP group at Moody's Investor Service, where he had worked for more than 10 years (see...

Mexico MBS paraded before crowd: And the show has yet to begin.
September 29, 2003... NEW YORK - While it has yet to get off the ground, Mexico's MBS market - or rather talk of it - can already draw a crowd in New York. At Moody's Investors Service 4th annual Latin American Securitization Briefing, attendance at a session...

ABFI reveals 10-K: Smaller deals and whole loan sales for American Business.
September 29, 2003... American Business Financial Services announced last week that it will report a net loss of $29.9 million for the fiscal year, primarily tied to its inability to close a securitization last quarter. In its 8-K filing with the Securities and...

DVI saga continues.
September 29, 2003... DVI Inc. took another wrong turn last week, as the trustee announced that DVI Financial Services, as servicer, "may have inappropriately used somewhere between $2.5 and $3.5 million" of funds due to nine trusts in question prior to filing for...

Target readies new card MT program.
September 29, 2003... Target Receivables Corp. amended its S-3 filing with the Securities and Exchange Commission last week, to issue up to $3 billion in retail credit card ABS through Target Credit Card Master Trust. It's been over a year since the discount...

Little impact seen from Texas HELOC law.
September 29, 2003... Although Texas legislators recently changed their laws allowing mortgage originators to extend home equity lines of credit (HELOC), market players do not expect Texas-originated HELOCs in many new issues going forward. Driving this sentiment is...

Board relaxing some FAS 140 amendment provisions.
September 29, 2003... Accountants monitoring last Wednesday's Financial Account -ing Standards Board meeting noted that FASB has tentatively "loosened" some of the hard-line provisions in the Exposure Draft of proposed amendments to FAS 140. The redeliberations will...

Pre-Boca market buzzes with activity.
September 29, 2003... New issues rushed into the primary market last week, as volume topped $14.5 billion with just two weeks to go before the asset-backed market shuts down for the annual ABS East conference in Boca Raton, Florida. Over $7.5 billion of home-equity...

High yield makes a comeback as CDO collateral.
September 29, 2003... Mention high yield to someone in the CDO market, and you'll likely elicit a negative reaction. After all, high yield has been the least favorite asset class for CDO collateral over the past couple of years, as a result of the record defaults...

BMA CDO conference attendees clamor for space during secondary market discussion: Insurers, hedge funds eyeing secondary ...
September 29, 2003... The rapid development of a secondary CDO market attracted a standing room-only crowd during the Bond Market Association's inaugural CDO conference last Tuesday. Seven traders from leading CDO dealers weighed in on what has been, from some...

Innovators Crack the Code on Securitizing Life Insurance.
September 29, 2003... Triple X deal gets the market excited for more, but no, it's not porn Two groundbreaking life insurance securitizations - done very quietly this summer - introduced a new asset class to eager investors and opened up exciting possibilities...

Servicers beware, Fitch is on the lookout.
September 29, 2003... Last week, Fitch Ratings warned CMBS special servicers against engaging in opportunistic servicing. The release said that Fitch is concerned when a special servicer, based on its role in the deal, makes use of "self-serving opportunities...

Technicals remain supportive for MBS.
September 29, 2003... The mortgage story is once again about technicals. Last week was characterized by limited originator selling - approximately $1 billion per day - and increasing buying support. In particular, there is a returning CMO bid. Money managers were...

Massive drop in prepay speeds expected for September.
September 29, 2003... With higher mortgages rates compared to lows seen in the middle of this year, analysts said that the September report should show the most significant drop in prepayment speeds seen this year. "There should be a pretty significant decline...

Paper regenerates at the pace of pricing.
September 29, 2003... It was business as usual last week in Europe as volumes edged past the E12 billion (US$13.7 billion) mark. By press time several new deals priced and new paper began marketing as well. According to reports, at least E8 billion (US$9.1) is...

European consumer credits: Not all shine and glory.
September 29, 2003... There's been no shortage of RMBS supply in the European securitization market so far this year, yet industry accounts still point to an unstated demand among investors that continues to drive pricing in, despite the heavy calendar ahead. But...