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GC Asia
Securitization - Article Archive
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JPM: Banks’ RMBS Holdings Drop By $26B
Banks dumped $26 billion in mortgage-backed securities holdings in the last week, a significant drop over a short period, according to analysts at JPMorgan during a client call on Tuesday.
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CMBS Loan Prices At Two-Year High
The prices of commercial real estate loans collateralizing commercial mortgage-backed securities rose in December to their highest levels in two years, according to DebtX ceo Kingsley Greenland
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JPM Slapped With Another MBS Suit
German cooperative lender DZ Bank has been the latest to file against JPMorgan Chase for alleged misrepresentations in the offering materials of mortgage-backed securities it sold.
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Denver Firm Forms Structured-Finance Group
Denver-based CoBiz Financial has announced the formation of CoBiz Structured Finance, which it says will provide asset-based loans to middle-market businesses.
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FHFA Defends Freddie Mac’s CMO Investments
The Federal Housing Finance Agency has responded to media reports that Freddie Mac profited by pouring money into collateralized mortgage investments in which the government-sponsored enterprise benefited from homeowners are unable to refinance.
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CMBS Rally Seen Ending
The rally in commercial mortgage-backed securities that dominated activity in the first half of January appears to be coming to an end, according to Citigroup analysts.
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Bank Failures To Double Over Two Years
At least 758 banks are expected to fail over the next two years—nearly double the 389 that collapsed between 2009 and 2011, according to Invictus Consulting Group.
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Deutsche Bank Said To Prep for $1 Bln CMBS
Deutsche Bank is said to be preparing to launch a $1billion issue of commercial mortgage-backed securities in February.
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Williams Adds Structured Finance
The Williams Group has formed Eland Capital, a new unit that will explore structured finance opportunities for corporate, federal, state and local government clients.
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AmeriCredit Subprime Deal Takes Off
AmeriCredit Financial Services, a subsidiary of General Motors Financial, priced its first securitization of 2012, a $1 billion asset-backed deal backed by subprime auto loan receivables, this afternoon.
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Natixis Announces Pfandbrief Platform
French bank Natixis formally announced its plans to set up a branch to tap the German Pfandbrief market—the most liquid covered bond market in the world—to finance commercial real estate investments, primarily in Germany and France.
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Reliance On ECB May Bode Poorly In Longer Term
Eurozone bank reliance on the European Central Bank’s emergency-funding facility may be a positive in the short term but could have negative implications in the medium and longer term in terms of regaining access to the public bond market, according to Barclays Capital analysts.
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European Banks May Triple ECB Funding
Eurozone banks may double or triple the amount they borrow from the European Central Bank’s three-year emergency funding facility when the next auction is held Feb. 29.
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Intesa Eyes Sale Of Senior Unsecured Bonds
Intesa Sanpaolo says it is planning a sale of senior unsecured bonds to raise at least EUR500 million ($655.5 million), which would make it the first such debt deal of its kind in months.
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Gross Lending By U.K. Mutuals Up 16%
Gross lending by U.K. building societies and mutuals rose 16% in 2011 to £23.6 billion ($37.1 billion), according to the Building Societies Association.
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BarCap Launches Covered-Bond Indices
Barclays Capital has launched its Fiscal Strength Weighted Covered Bond Indices.
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Austrian Bank To Launch Euro-Denominated Covered Bond
Austria’s Erste Group Bank is expected to launch a benchmark-size euro-denominated covered bond in the near future, market conditions permitted.
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Banks, Traders To Face Fine For Settling Failures
The U.S. Securities and Exchange Commission will begin slapping large banks and trading firms that fail to properly complete certain mortgage-security trades.
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Arkle returns to yen
The provisional capital structure for Lloyds Banking Group’s Arkle 2012-1 RMBS includes a three year yen tranche, following the example of Santander UK’s Holmes 2012-1. Before this year, the only UK deal to offer yen had been Arkle 2010-2.
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Barclays creates €7bn collateral from Italian mortgage book
Barclays has structured a €7bn securitisation of Italian mortgages, using the Mercurio Mortgage Finance programme. The deal will be retained, giving Barclays an extra slug of eligible collateral for the ECB’s LTRO facility, ahead of the second tender at the end of February 28.
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Freddie Mac Said To Use Inverse Floaters To Make Money
ProPublica and NPR say their joint investigation has found that Freddie Mac was making money from so-called “inverse floaters” at the same time that it was supposed to be making it easier for struggling borrowers to refinance.
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Dutch Pension Fund Sues GS Over MBS
Dutch pension fund Stichting Pensioenfonds ABP has filed suit in New York state Supreme Court against Goldman Sachs for allegedly providing misleading information about the credit quality of residential mortgage-backed securities.
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Banks Remain Tight On Credit Despite Rising Demand
U.S. bank continued to maintain tight lending standards in the fourth quarter despite rising demand, according to the Federal Reserve.
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RMBS Group To Focus On Disclosure
The newly formed Residential Mortgage-Backed Securities Group is expected to focus on insufficient or misleading disclosure in selling the securities relating to credit quality, conforming to underwriting guidelines and underlying property valuations, among other factors, according to Robert Khuzami, director of the U.S. Securities and Exchange Commission’s Division of Enforcement.
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Citi Snubs High-Risk Mortgages
Citigroup has adopted a strategy to avoid purchasing medium or high-risk mortgages that could eventually result in requests from Fannie Mae and Freddie Mac to buy them back.
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Outlook Stable For LatAm Structured Finance
The outlook is stable this year for the credit quality of new and outstanding structured-finance transactions in Latin America, according to Moody’s Investors Service.
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SEC Eyes Paulson’s Role In Deutsche Bank CDO
The U.S. Securities and Exchange Commission is said to be investigating the role hedge fund Paulson & Co. played in selecting mortgage-backed securities for a collateralized debt obligation sold by Deutsche Bank.
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Banks May Not Escape Criminal Liability From Settlement
The proposed settlement between state attorneys general and mortgage servicers will not likely allow financial institutions to escape criminal liability.
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Cat Bonds On The Prowl
The asset-backed securities sector is starting to see the uptick many said to expect post-ASF2012, with some market players turning their attention to catastrophe bonds (aka event- or insurance-linked securities).
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B of A: Mod Rates Could Surge Under New HAMP
The expansion of the Home Affordable Modification Program’s guidelines to include a wider array of borrowers could cause modification rates to pick up by as much as 36%, according to researchers at Bank of America Merrill Lynch.
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RBS Hires Hybrid Capital Head
The Royal Bank of Scotland has scooped up A.J. Davidson as managing director and head of hybrid capital in the investment bank’s London office.
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Banks Confused By E.U.’s ABS Position
The European Union has confused banks regarding its position on asset-backed securities with contradictory clauses in the latest draft of its Capital Requirements Directive.
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Italian RMBS Stable, Outlook Negative
Performance of Italian residential-mortgage-backed securities was stable in November, according to Moody’s Investors Service, with delinquencies at the same level as a year earlier.
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UBS May Face Fine Over Unauthorized Trades
The U.K.’s Financial Services Authority and the Swiss Financial Market Supervisory Authority may impose a penalty on UBS for oversight failures that led to costly unauthorized trades and some $2.3 billion in losses last year.
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FSB Threatens To Name Basel Laggards
The Financial Stability Board has threatened to “name and shame” those countries that don’t properly implement new capital and liquidity requirements adopted by the Basel Committee on Banking Supervision.
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Lloyds CEO Said To Eye Management Changes
Antonio Horta-Osorio, ceo of Lloyds Banking Group, is said to be planning management changes that would result in his relinquishing some responsibilities in the hopes of avoiding another bout of exhaustion, which led to his recent two-month medical leave.
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RBS CEO Waives Bonus Under Pressure
Stephen Hester, ceo of Royal Bank of Scotland, has waived his bonus of nearly £1 million ($1.6 billion) after the U.K.’s Liberal Democrat party threatened to force the government, which holds a 83% stake in RBS, to cancel the compensation.
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Goldman-Citi Prices, CMBS Mezz Market Rallies (Update)
Goldman Sachs and Citigroup this week priced the sixth commercial mortgage-backed securities deal from their joint shelf, the $1.15 billion GSMS 2012 GS6. Most of the offered classes hit guidance levels, despite what some market players presumed would be a brief lull in demand caused by focus on the American Securitization Forum’s 2012 conference in Las Vegas.
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Specially Serviced U.S. CMBS Increase
The number of loans in U.S. commercial mortgage-backed securities in special servicing has been on the rise since the fourth quarter and are likely to continue to increase, according to Fitch Ratings.
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RMBS Task Force Formed, Banks Subpoenaed
U.S. Attorney General Eric Holder has announced the formation of the Residential Mortgage-Backed Securities Working Group, made up of members of the Department of Justice, state attorneys general and officials of other federal agencies.
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Credit Suisse CEO Won’t Get Derivatives-Linked Bonus
Brady Dougan, ceo of Credit Suisse, is said not to be in line to receive bonds made from derivatives as a bonus, as other bankers are poised to be awarded, to avoid a conflict of interest.
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Securitization Seen A Viable Option For Solar Developers
Securitization Seen A Viable Option For Solar Developers Securitization for solar photovoltaic developers may be a viable option for monetizing cash flows from future lease or power purchase agreement payments, according to Andrew Guidici, a credit analyst at Standard & Poor’s.
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BofA Said To Cut Cash Comp
Bank of America is said to have told investment bankers that their compensation would on average be 25% less than a year ago.
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Mortgage Originations Down, But Quality Up
Mortgage originations continued to decline in December after peaking in September, falling more than 10% than the preceding month, according to Lender Processing Services.
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“You ask the question, how relevant is the asset class going to be three or four years down the road? But it’s not an issue now. The technicals of the sector are strong.”
—Steven Juszczyszyn, v.p. at Delaware Investments, at ASF2012’s Credit Card ABS Sector Review panel on his being unfazed by the sector’s shrinking size.
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One Year Ago In Total Securitization
Analysts from Citigroup reported that equity slices in collateralized loan obligations were performing well, with almost 85% of equity portions kicking off full payments to investors.
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CLO Pipeline Starts To Produce
Collateral manager Symphony Asset Management has closed its Symphony CLO VIII, a $349 million cash flow arbitrage CLO comprising a revolving pool of broadly syndicated senior secured loans.
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European Lending Tightens To A Record
European banks cut lending to the private sector by 0.7% in November, the most since the European Central Bank began keeping records in 1991.
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Portuguese Bank Eyes Covered Bond Buyback
Portugal’s Banco BPI is planning to raise its capital ratio with a discounted buyback offer for a covered-bond issue, the second European bank to do so this year following National Bank of Greece.
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E.U. Creditor Write-Downs On Hold
Michel Barnier, the European Union’s commissioner of financial services, says he will delay proposals for writing down creditors at failing banks until the worst of the region’s crisis passes.
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International Banks Snub France and Italy
International banks have reduced lending to banks and government in Italy, France and Spain, while favoring Germany, Japan and the U.S., according to Bank for International Settlements data.
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Trade Group To Lobby Against Bank Regs
The Global Financial Markets Association is planning to reshape itself and become a lobbying group representing the interests of the world’s largest banks as regulators begin imposing tough restrictions.
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BofE, FSA Outline Regulatory Framework
The Bank of England and the U.K.’s Financial Services Authority have released a draft Memorandum of Understanding, detailing how they expect the new Financial Conduct Authority and the Prudential Regulation Authority to operate amid different mandates.
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Lloyds Preps New Arkle Offering
Lloyds Banking Group is preparing a new issue of U.K. residential mortgage-backed securities from its Arkle master trust.
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Obvion Sees Strong Demand As Storm Prices Tight (Update)
Dutch lender Obvion has priced its Storm 2012-I Dutch residential mortgage-backed securitization, upsizing the original deal and pricing the A1 bond 10 basis points tighter than initial guidance.
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Pipeline heats up as risk rally takes hold
Three new ABS mandates hit the market in the second half of the week — auto deals from Socram Banque and Société Générale, and a new Arkle RMBS from Lloyds Banking Group. A constructive market backdrop, along with a blowout deal from Obvion’s Storm (see separate stories) flushed issuers out.
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Commerz turns to synthetic securitisation to plug capital hole
Commerzbank has launched a synthetic securitisation of its Mittelstand loan portfolio, aiming to sell €160m of equity risk and €30m of mezzanine risk as part of frantic efforts by the bank to fill its €2.3bn capital hole.
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KBC risks Fitch wrath in tweaking deal docs
KBC Bank has amended deal documents in Irish RMBS deals Phoenix Funding 2 and 3, to avoid triggering counterparty replacement provisions — exactly what Fitch warned issuers to avoid at the beginning of the year.
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FIG markets back to pre-crisis days as Lloyds TSB triumphs
With investors scrabbling for bank paper after a powerful secondary rally and a slowdown in new issues since the year’s initial rush, bankers are urging financial issuers to seize a compelling opportunity to raise new debt. A €1.5bn Lloyds TSB senior deal that attracted almost €4.5bn of orders in just 90 minutes on Thursday morning underlined the point.
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S&P upgrade sends Granite triple-Bs flying
Granite triple-Bs have been bid over 60 cash price this week — a rise of at least four points on the week, coming on the back of a 10 point rally since the beginning of the year. Part of the action has been driven by Standard & Poor’s, which upgraded the bonds from BB with negative watch to BBB-.
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Analysts dash ABS liquidity hopes
Hopes that ABS might be deemed eligible for inclusion into bank liquidity buffers may be misplaced, according to notes by analysts from JP Morgan and Bank of America Merrill Lynch published this week.
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Obvion rides rally to Storm success
Obvion managed to almost double the size of its Storm 2012-1 RMBS, while tightening pricing on the short tranche by 10bp. The success of the trade surpassed expectations of market participants, whether involved in the deal or not, and sets a strong tone for the clutch of ABS mandates announced this week (see separate story).
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Tesco shrugs off rating risk to fifth CMBS
Tesco sold a £450.5m sale-and-leaseback commercial mortgage backed security on Wednesday, shrugging off a downgrade warning from Moody’s, but paying a 30bp new issue premium that repriced its other bonds.
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No Fed Agency MBS Sales Expected Until 2015
Ben Bernanke, chairman of the Federal Reserve, said the central bank is not planning to sell any of $847.4 billion in agency mortgage-backed securities or $101.5 billion of agency debt before 2015.
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Fed’s Interest Move Puts Margin Pressure On Banks
The Federal Reserve’s announcement that it plans to keep interest rates low at least until late 2014 is expected to make it harder for big banks to increase profits and raise capital.
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Bailed-Out Firms Still Owe $133 Bln
Firms bailed out during the financial crisis still owe the government $133 billion, including 371 banks.
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Morgan Hit By Two RMBS Suits
Morgan Stanley has been hit with lawsuits by two foreign banks over residential mortgage-backed securities.
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Servicer Settlement Approval Uncertain
Approval of a proposed $25 billion settlement between large banks and state attorneys general over mortgage practices appears uncertain as Kamala Harris, the attorney general of California, called the draft inadequate, saying it does not include meaningful relief or enforcement.
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Freddie Mac Mortgage Delinquencies At Nine-Month High
Delinquencies in mortgages held by Freddie Mac climbed to 3.58% in December, its highest level in nine months.
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Lagging HAMP Servicers Stand To Lose Millions
Major mortgage servicers stand to lose more than $131 million in fees for failing to improve their performance in the Department of Treasury’s Home Affordable Modification Program.
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Refi Pitch Could Yield HARP Expansion
Changes to the Home Affordable Refinance Program could be around the corner, even if plans for a large-scale refinancing President Barack Obama laid out in his State of the Union speech are unlikely to clear Congress, market players say.
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Goldman-Citi Prices, CMBS Mezz Market Rallies
Goldman Sachs and Citigroup this week priced the sixth commercial mortgage-backed securities deal from their joint shelf, the $1.15 billion GSMS 2012 GS6.
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ABN Amro CMBS Loan Given Standstill Extension
The troubled Apple whole loan, securitized in ABN Amro’s EUR1.08 billion ($1.42 billion) Talisman 6 German commercial mortgage-backed deal, has been given a further standstill period to run until Jan. 15, 2013.
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FSB Praises Swiss ‘Too Big To Fail’ Law
The Financial Stability Board’s peer review has approved Switzerland’s “too big to fail” law for systemically important banks, which goes into effect March 1.
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Basel Mulls Use Of Credit Ratings For Ratio
The Basel Committee on Banking Supervision is said to be considering the use of credit ratings to dateline which sovereign bonds qualify for its liquidity coverage ratio.
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Big European Banks To Snub Sovereign Debt
Large European banks are unlikely to use loans they secured from the European Central Bank’s three-year lending facility to purchase sovereign debt because of its volatility, according to Standard & Poor’s.
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U.K. RMBS Performance Remain Stable
Performance of non-conforming and prime residential-mortgage backed securities remained stable in the three months ended in November, according to Moody’s Investors Service.
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German Bank-Rescue Fund To Reopen
German lawmakers have voted to reopen SoFFin, the government’s bank-rescue fund, as a last resort to help avert failures of financial institutions during the European debt crisis.
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UniCredit To Boost Capital With EUR3 Bln Buyback
UniCredit is looking to boost its capital with an offer to buy back up to EUR3 billion ($3.9 billion) of Tier 1 and Tier 2 bonds.
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Covered Bonds Losing Their Luster
Europe’s bleak economy may hurt covered bond prospects in 2012, especially in countries such as Greece, Italy, Portugal and Spain, according to Standard & Poor’s.
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RBS’ Top-Paid Banker Urged To Forgo Bonus
John Hourican, head of Royal Bank of Scotland’s investment bank and its highest-paid staffer, is under pressure to forgo £5.6 million ($8.8 million) of long-term bonuses that he is due according to his contract.
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Issuers Scope Japanese Appetite As VW Prices ABS
Issuers in the U.K. and Europe now sounding out Japanese demand for future deals after Volkswagen Financial Services’ Driver Japan One auto loan securitization closed 3.5 times oversubscribed.
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ASF 2012 Daily Issue PDFs
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ASF 2012 Daily Photos
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SocGen on the road with German autos
Société Générale is roadshowing a German auto ABS from one of its subsidiaries, Bank Deutsches Kraftfahrzeuggewerbe (BDK) — the French bank’s first public ABS since before the crisis.
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Storm boosts size in booming market
Lead managers Rabobank and Société Générale are aiming to increase the size of Storm 2012-1, a Dutch RMBS from Rabo subsidiary Obvion. The leads set the spread on Wednesday, fixing a level of 110bp for the ‘A1’s and 155bp for the ‘A2’s. This is already 10bp tighter than initial guidance on the ‘A1’ tranche.
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Leaving Las Vegas: ASF Wraps Up
Wednesday’s first panels at the ASF2012 conference were well attended, even as many of the conference goers packed and queued for taxis to the airport.
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Another $300 Bln In RMBS Losses Projected
Losses on residential mortgage-backed securities may total an additional $300 billion, according to R&R Consulting.
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Task Force To Probe MBS, Loan Fraud
President Barack Obama has announced the establishment of task force devoted to investigating alleged fraud involving mortgages and mortgage-backed securities.
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Obama Proposes Refi Plan
President Barack Obama in his State of the Union message Tuesday night asked Congress to approve a mortgage-refinance plan that would allow borrowers current on their loan payments to secure a new mortgage at record-low rates.
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Regulators Urged To Break Up BofA
Public Citizen along with a group of nearly two dozen other consumer advocates, academics and economists are planning to file a petition with the Federal Reserve and other regulators to break up Bank of America into smaller, safer units.
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Fannie Mae Multifamily RMBS Issuance Soars 45%
Issuance of residential mortgage-backed securities linked to multifamily dwellings by Fannie Mae surged 45% in 2011 to $23.8 billion.
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S&P Sued In Ill. Over MBS Ratings
Lisa Madigan, the Illinois attorney general, has filed suit against Standard & Poor’s for its role in assigning its highest ratings to “unworthy” mortgage-backed securities in the years leading up to the housing market collapse.
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Fitch Downgrades Distressed U.S. RMBS
Fitch Ratings has downgraded 489 distressed bonds in 291 U.S. residential mortgage-backed securities from Csf and CCsf to Dsf, indicates the bonds have incurred a principal write-down.
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Economists Expect Fed To Buy More MBS
Nearly half of economists say the Federal Reserve will likely launch a new round of bond buying of only mortgage-backed securities purchases, if it determines the U.S. economy needs it.
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Citi Eyes More Cuts In Securities Unit
Citigroup may cut back further in spending on its securities unit if revenue doesn’t improve this year, says John Gerspach, the bank’s cfo.
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Industry Players Shrug Off Obama’s Refi Proposal
Market players at the ASF2012 conference in Las Vegas this morning expressed little concern over President Obama’s State of the Union speech last night, in which he called on Congress to pass legislation allowing homeowners current on their mortgages to refinance.
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Tesco Rolls Out Asset Finance ABS
U.K. supermarket chain Tesco has priced a £450.5 million ($701.6 million) securitization from its Tesco Property Finance program, which is backed by supermarket assets and leases.
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CS Bonus Plan Seen As A Basel Strategy
Credit Suisse’s plan to award annual bonuses in part with structured notes is seen as a strategy that will allow the bank to remove toxic assets from its balance sheet that, if they remained, would mean higher capital charges as imposed by the Basel Committee on Banking Supervision.
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European Banks, Regulators Differ Over Capital Raising
European banks and regulators have different approaches on how financial institutions should raise capital to boost their core Tier 1 ratios.
