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High-yield investors are demanding--and receiving--tighter covenants on new issues, in what market professionals say is becoming a buyers' market.

Financial Guaranty Insurance Co. is looking to start wrapping its first collateralized debt obligations and is in the process of setting up a subsidiary that can offer credit default protection to investors, said Tracy Pridgen, managing director and head of CDOs in New York.

Michael Oehm, director in Deutsche Bank’s financial institutions securitization group in London, has been hired by Morgan Stanley for its FIG securitization team in London, reporting to Paul Rolls, head of FIG asset-backed securities.

The second public securitization fully-backed by secured shipping loans, due to come to market in September, will offer a firm base on which to build the asset class, according to market participants.

The pending Homeland Investment Act, which would allow companies to repatriate off-shore profits at a reduced tax rate, could spark a chain of events that would result in Moody's Investors Service lowering its ratings on high-grade issuers in the pharmaceutical sector, the rating agency said in a report last week.

Nomura Securities International's asset finance group in London is in hiring mode, according to Nitin Bhandari, who was himself recently hired from Bear Stearns as a senior director to build the firm's securitization capability.

Cairn Capital, a new asset management firm in London run by well-known credit veterans, is taking what it calls a unique approach and plans to offer three distinct capabilities: structuring/advisory, asset management and financial guaranty.

The recent lower-than-expected non-farm payroll figure indicates that high-yield bonds may be overvalued, said Oleg Melentyev, associate at Merrill Lynch in New York.

Tracy Pridgen, managing director and head of collateralized debt obligations at Financial Guaranty Insurance Co., on its plans to offer CDO guarantee services.

The bonds of Dobson Communications and American Cellular, which is fully owned by Dobson, dropped around seven points last week after the parent revised earnings guidance for the second time this year.

The estimated €300 billion of non-performing loans on German banks' books looks increasingly ripe for securitization as pressure mounts on issuers to clean up their balance sheets.