Heads Roll as Banks React to PPIP Probe
The government’s crackdown on fraudulent sales of mortgage bonds to funds operating under the Treasury Department’s Public-Private Investment Program appears to have claimed the jobs of several more industry professionals.Read more.
Further Delays Seen on Changes to Reg AB
It looks like the SEC once again will extend the comment period for its long-delayed revision of Regulation AB, prompting speculation that a final vote on the controversial measure won’t come until next year.Read more.
‘Qualified’ CLOs Floated Past Regulators
In a last-ditch effort to mitigate the impact of pending risk-retention rules, the Loan Syndications and Trading Association and other industry groups are urging regulators to carve out a new category of “qualified” collateralized loan obligations.Read more.
Banks Alarmed by Leveraged-Loan Review
Banks that write leveraged loans with the intent of distributing them to collateralized loan obligation managers and other investors are expressing fears that a recent increase in scrutiny from regulators could be a precursor to government sanctions.Read more.
S&P Loses Another MBS-Ratings Leader
It turns out that Vandana Sharma wasn’t the only senior employee to step down from S&P’s mortgage-bond rating team last month — putting the agency in the position of having to appoint a new leadership team for the unit.Read more.
Litvak Claims Jefferies, Feds Have Cut a Deal
Defending himself against criminal charges that he defrauded clients of Jefferies, mortgage-bond trader Jesse Litvak is accusing his former employer of colluding with federal prosecutors in an effort to limit damage to the firm.Read more.
Why CLOs Have Suddenly Tightened
Spreads on collateralized loan obligations narrowed significantly this week as the first deals of the year hit the market, reflecting both a temporary dip in supply and less-favorable arbitrage opportunities.Read more.
CLO Issuers Wring Hands Over Asset Prices
Worries are surfacing among managers of collateralized loan obligations that rising prices among the loans backing their offerings could put a crimp on profits, potentially bogging down deal production.Read more.
Industry Gets Regulatory Relief From CFTC
It looks like asset-backed bond issuers can breathe a sigh of relief about a Commodity Futures Trading Commission rule that threatened to regulate many securitizations as commodity pools starting Oct. 12.Read more.
25 Capital Vehicle Targets Nonperformers
An investment shop headed by a former Bank of America securitization banker is marketing a vehicle that would buy nonperforming home loans, with an eye toward securitizing down the road.Read more.
Swiss Re Alumni Launching Fund Outfit
Anthony Contessa, who oversaw Swiss Re’s efforts to unwind a massive portfolio of distressed structured products during the financial crisis, left the reinsurer last month to start a hedge fund.Read more.
Bingham, Mayer Top Law Firm Rankings
Mayer Brown squeaked by Bingham McCutchen as the securitization industry’s most active issuer counsel last year, though Bingham retained its title as top underwriter counsel.Read more.
Issuers Asked to Pay for Quality Label
The Association for Financial Markets in Europe and the European Financial Services Round Table are entering the final stages of an effort to develop a “quality label” for securitizations.Read more.
Mariner Teeing Up Mortgage-Bond Vehicle
Fixed-income fund operator Mariner Investment is about to launch a vehicle focused on mortgage-backed securities, replicating a strategy that has generated double-digit returns for the firm’s multi-strategy hedge funds.Read more.
Agency MBS Repackagings On the Table
A government proposal that calls for Fannie Mae and Freddie Mac to add unguaranteed subordinate classes to their mortgage-bond issues could spawn yet another new product: resecuritizations of the junior securities.Read more.
ASF Angles to Block Franken Amendment
A much-maligned SEC rule designed to spur unsolicited grades on structured products ultimately could prove preferable to the transformation of the rating process envisioned by a controversial amendment to the Dodd-Frank Act.Read more.
Risk-Retention Fight Turns to Military Impact
Opponents of proposed risk-retention rules for mortgage securitizations are expanding their lobbying efforts to embrace a potentially persuasive argument: That the regulations would cut off financing for military families.Read more.
FDIC Official Dampens Covered-Bond Push
Martin Gruenberg, widely viewed as President Obama’s top choice to lead the FDIC, has taken a stand on pending covered-bond legislation that is antithetical to the industry players’ positions.Read more.
Regulators Give In on Risk-Retention Rule
The six federal regulators that unveiled a sweeping risk-retention proposal on March 29 have backed away from a key provision that market players saw as the biggest threat to securitization.Read more.
Banks Sound Alarms Over Consumer Bureau
Banks that want to set up mortgage conduits are suddenly wondering if their efforts could be hindered by a yet-to-be-issued directive from a U.S. government agency that still doesn’t exist.Read more.
Bankers Puzzled Over Brief S&P Watch List
Industry participants no longer see a major threat in efforts by S&P to determine whether stricter swap-counterparty requirements might lead to downgrades of asset- and mortgage-backed bonds — but they may not be completely out of the woods.Read more.
BofA, Citi Draw Flak for Trading Tactics
Bargain hunters are grumbling that Bank of America and Citigroup have been stepping in at the last second to buy pieces of their own clients’ bid lists — but many market players say there’s nothing wrong with the practice.Read more.
Waterfall Back in Capital-Raising Mode
Waterfall Asset Management is pushing to raise another $600 million for a hedge fund that buys nonperforming home loans, rehabilitates them and then securitizes some of the credits.Read more.
Truce at Hand Between Underwriters, S&P
S&P has proposed new wording for the paperwork underwriters must sign when hiring it to rate mortgage bonds - a change that could help the agency resolve a standoff with those institutions.Read more.
Lloyds, Nationwide Keep UK Supply Flowing
Look for Lloyds Banking and Nationwide Building Society to race out securitizations of fresh U.K. mortgages, now that RBS has placed a huge transaction at some of the lowest yields since the onset of the credit crisis.Read more.
Issuers Chasing Bad-Mortgage Portfolios
Arch Bay Capital and Kondaur Capital are among the leading bidders for a large portfolio of nonperforming mortgages that Flagstar Bank is shopping - assets the shops are eyeing as future bond collateral.Read more.
UBS Nabs Mulford for Mortgage-Bond Role
Ken Mulford, best known for his role in securitizing subprime mortgages at the now-defunct Ameriquest, arrived at UBS this week - the latest sign of the bank's ambitions to rebuild its once-active securitization-banking business in the U.S.Read more.
Deutsche Takes Aim at Student-Loan Assets
Deutsche Bank intends to expand its role in the student-loan industry - both by purchasing an education lender and by picking up loan portfolios from companies that plan to exit the rapidly evolving marketplace.Read more.
Skepticism Surrounds Trups-Buying Strategy
Two Highland Capital partners are trying to purchase trust-preferred securities issued by a bank they partially own - shares that currently reside in the underlying portfolio of a collateralized debt obligation.Read more.
Dynamic Credit Layoffs Reflect CDO Retreat
Dynamic Credit Partners, once an active issuer of collateralized debt obligations, laid off portfolio manager Dan Nigro and trader Chris Sandleitner last week amid an ongoing shift in its business.Read more.
Accounting Relief Seen in Conduit Tweak
Companies that rely on commercial-paper conduits for funding are getting innovative in a late-year scramble to make sure their receivables continue to receive off-balance-sheet treatment.Read more.
Marathon Raises Eyebrows With CLO Re-Buy
Marathon Asset Management pocketed millions of dollars over the past few months by buying back securities from a collateralized debt obligation it issued in 2005 and then retiring them at higher prices.Read more.
Conduit Distribution Pros Face Downsizing
Credit Suisse insists that it has no plans to downsize or eliminate its asset-backed commercial paper distribution desk, contrary to what appeared in the Oct. 9 article "Conduit Distribution Pros Face Downsizing."Read more.
MBS Losses Grow Murky as Defaults Rocket
The July mortgage-bond defaults cited in a Sept. 11 article, "MBS Losses Grow Murky as Defaults Rocket," included classes of bonds that S&P had earlier downgraded to "D" and then confirmed at that rating during the month. Of the 2,996 defaulted tranches, 881 had their ratings lowered in July, compared to 289 in July 2008. The rest of the July 2009 tally consisted of confirmations of previous downgrades. In the first seven months of this year, S&P downgraded 7,233 tranches of home-loan securities to "D" while confirming such ratings for 7,624 classes.
US Set for Pivotal Capital-Reserve Ruling
U.S. government officials are aiming for September to decide once and for all how banks' capital reserves should reflect a tidal wave of securitized assets that are headed for their balance sheets.Read more.
PPIP Managers Hit With One-Month Setback
The U.S. Treasury Department has quietly notified the nine asset-management groups chosen to set up funds under its Public-Private Investment Program that the effort's timetable has been pushed back by at least a month.Read more.
Fed Weighing Revisions for TALF Haircuts
The Federal Reserve is thinking about increasing the down payments it requires from investors that buy certain types of bonds with financing from its Term Asset-Backed Securities Loan Facility.Read more.
Government Aid Keeps Supply on Even Keel
Worldwide securitization activity is set to build ever so slightly in the next six months with continued central-bank support, as annual issuance volume heads toward its lowest point since 2002.Read more.
Banks Get Jump on Possible TALF Expansion
Mortgage lenders have started approaching rating agencies with securitization pools that they think might qualify for an expanded version of the Federal Reserve's Term Asset-Backed Securities Loan Facility.Read more.
BofA Unable to Clear Subprime Threshold
Even as other credit-card lenders rush to sell bonds for use in the Federal Reserve's Term Asset-Backed Securities Loan Facility, Bank of America is worried such a move would leave it with an unwanted stigma.Read more.
Momentum Building for TALF's June Round
Structured-product issuers are lining up an estimated $15 billion to $20 billion of deals for the next monthly installment in the Federal Reserve's Term Asset-Backed Securities Loan Facility.Read more.
TALF Distribution Raises Buyers' Hackles
As the Federal Reserve's Term Asset-Backed Securities Loan Facility produced its third monthly wave of bond offerings this week, some investors were grumbling that they never got a fair shot at the deals.Read more.
Bankruptcy Threat Hits Chrysler, GM Bonds
President Obama's threat to push Chrysler and General Motors into bankruptcy has all but ruled out the possibility of those companies securitizing auto loans anytime soon, while scaring off secondary-market buyers of their bonds.Read more.
More Issuers Scramble as Card Payments Lag
Deteriorating borrower performance has forced American Express, Citigroup and First National Bank of Omaha to divert cashflows from securitized credit cards into special reserve accounts - and more drastic moves could follow.Read more.
Rating Downgrades Swamp Alt-A Bonds
A Feb. 27 article, "Rating Downgrades Swamp Alt-A Bonds," mischaracterized the volume of alternative-A mortgage bonds held by State Street Global Advisors. The firm owns $234 million of such securities, accountinRead more.
Vegas Crowd Torn by Uncle Sam's Role
Many securitization professionals came away from this week's big industry gathering in Las Vegas feeling conflicted and increasingly nervous about the U.S. government's expanding role in the market.Read more.
Spread Tightening Seen as Short-Lived Trend
A Jan. 16 article, "Spread Tightening Seen as Short-Lived Trend," incorrectly stated that Ford had received support from the U.S. Treasury Department's Troubled Asset Relief Program (TARP). The automaker hasn't aRead more.
Citi, Morgan Stanley Speeding Up Retreat
A Nov. 21 article, "Citi, Morgan Stanley Speeding Up Retreat," contained errors. The item overstated layoffs within John Wood's analytics group, which was reduced to 19 people from 27. In the mortgage-finance divRead more.
Looming Regulatory Wave Vexes Industry
Securitization professionals are getting worried that the inauguration of President Barack Obama in January will usher in an onslaught of regulatory constraints that they've been able to beat back in the past.Read more.
Confidence Creeping Back Into CP Sector
The asset-backed commercial paper market showed signs of recovery this week, as sweeping government efforts to bolster financial markets made investors more comfortable with longer-term conduit issues.Read more.