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 Total Volume $m No. of Deals Share % by Volume
1 Bank of America Merrill Lynch (BAML) 7,026 25 11.95
2 Citi 6,449 21 10.96
3 BNP Paribas 5,093 18 8.66
4 Barclays 4,040 11 6.87
5 Lloyds Bank 3,615 14 6.15

Bookrunners of Global Structured Finance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 14 Dec 2017
1 Citi 120,126.76 346 12.85%
2 Bank of America Merrill Lynch 99,988.41 288 10.70%
3 Wells Fargo Securities 88,516.28 265 9.47%
4 JPMorgan 69,113.88 208 7.39%
5 Credit Suisse 51,313.00 155 5.49%