Saga Could Fuel Technicals In MBS, ABS

The ongoing General Motors saga and concerns on whether it will end up in speculative-grade territory could affect different parts of the structured finance market, with researchers predicting it might result in positive technicals for mortgage-backed securities and a potential supply overhang for asset-backeds.

  • 25 Mar 2005
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The ongoing General Motors saga and concerns on whether it will end up in speculative-grade territory could affect different parts of the structured finance market, with researchers predicting it might result in positive technicals for mortgage-backed securities and a potential supply overhang for asset-backeds.

On the mortgage-backed side, a downgrade of GM to junk could increase the net demand for MBS by $4 billion, according to researchers at Lehman Brothers. They calculated a GM downgrade would force Lehman Brothers Aggregate Bond Index investors to rebalance portfolios into non-credit sectors. And they anticipate MBS would benefit from positive technicals as a result, although the researchers noted in a report this is unlikely to have a material impact on spreads.

On the asset-backed side, more expensive unsecured funding costs for GM could mean its finance unit, General Motors Acceptance Corp., increases the amount of its loan-backed bond sales. Bear Stearns' ABS research chief Gyan Sinha estimates GMAC might need to raise as much as $63 billion from the ABS market this year, partly to replace maturing debt. While the company could fund some of that through the whole loan market, a worst-case scenario would pose negative technicals for GMAC and could force spreads up to 10 basis points wider, he wrote.

  • 25 Mar 2005

GlobalCapital European securitization league table

Rank Lead Manager/Arranger Share % by Volume
1 Societe Generale 15.35
2 Rabobank 14.41
3 Morgan Stanley 11.73
4 Barclays 8.99
5 Credit Agricole 7.57

Bookrunners of Global Structured Finance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 27 Feb 2017
1 Wells Fargo Securities 11,897.40 33 11.83%
2 Bank of America Merrill Lynch 9,837.56 29 9.78%
3 Citi 9,714.54 32 9.66%
4 JPMorgan 7,997.38 24 7.95%
5 Credit Suisse 6,335.67 14 6.30%