Cart

Inside MBS & ABS

May 25, 2012

View Archived Issues

Securitization Markets Near Pre-Crisis Levels, Sans MBS, as Underwriting Continues to Loosen

Most of the non-mortgage securitization market seems to be approaching the more normal levels that were seen prior to the financial crisis, according to market participants, analysts and observers gathered for the annual meeting of the American Securitization Forum this week in Washington, DC. “We’ve come a pretty long way, if you think about 2008, pre-2008 and post-crisis,” said Bob Behal, principal with The Vanguard Group. He noted that there have been healthy pricing levels in auto loan and credit card ABS and more active student loan and container sectors, as well as some interesting niche products and... Read More

CLO Activity Picking Up Steam as Securitization Market Looks for Growth Beyond Mortgages

Collateralized loan obligations and the securitization of esoteric ABS are gaining momentum in a market that is still missing one of the key ingredients of the boom years – non-agency residential mortgages – according to experts at the American Securitization Forum annual meeting this week. When Sara Bonesteel, managing director and head of alternative investments at Prudential Fixed Income, described the appeal of CLOs, she may as well have been outlining the antithesis of the current RMBS market. The CLO sector has fewer regulatory issues, relatively strong performance in the underlying asset and the... Read More

FDIC Sues Issuers and Underwriters Over Non-Agency MBS Bought by Failed Banks

The Federal Deposit Insurance Corp. late last week filed separate lawsuits against a number of companies that issued or underwrote non-agency MBS purchased by Citizens National Bank and Strategic Capital Bank, two Illinois banks that failed in May 2009. The two banks purchased some $140.5 million of non-agency MBS issued by Bear Stearns, Citicorp, Credit Suisse and Merrill Lynch. The lawsuits also name JPMorgan Securities, Citigroup, Credit Suisse, Deutsche Bank, Ally Securities, HSBC Securities, RBS Securities and UBS Securities as underwriters of these transactions. The FDIC is seeking $77.0... Read More

SEC No-Action Letter Clears Way for Canadian Bank to Offer Covered Bonds to U.S. Investors

The Securities and Exchange Commission has given Royal Bank of Canada the green light to issue residential mortgage covered bonds registered in the U.S. The SEC granted permission through a no-action letter shortly after RBC submitted plans for a program through which covered bonds backed by U.S. home loans will be offered to U.S. investors. RBC is a “foreign private issuer” under U.S. securities laws and, as a Form S-3 issuer, has a registered shelf with the SEC through which it can offer multiple securities on an immediate, continuous or even on a delayed basis. Covered bonds are debt securities backed by cash... Read More

Analysts: Undetermined Details of ResCap Bankruptcy Prompt Uncertainty About $8.7 Billion MBS Settlement

Uncertainty lingers in the wake of last week’s announced $8.7 billion settlement between non-agency MBS investors and Ally Financial’s subsidiary Residential Capital as the details and implications of the deal resonate throughout the market. The agreement with 17 residential MBS investors was struck in a photo finish shortly before ResCap’s bankruptcy filing, and it represents the second major settlement between non-agency MBS investors and the sponsors of non-agency securitizations. Bank of America’s controversial $8.5 billion proposed settlement with investors that purchased Countrywide non-agency MBS... Read More

Banks and Thrifts Hold Their Own in ABS Market That Slid Modestly in Early 2012

Banks and thrifts held $150.1 billion of non-mortgage ABS in their investment portfolios at the end of the first quarter of 2012, according to a new Inside MBS & ABS analysis of call report data. Commercial banks accounted for $135.4 billion of that amount, which was down 2.1 percent from the end of last year. Thrifts did not report their ABS holdings until the first quarter of 2012. The biggest category of bank and thrift ABS holdings were consumer loans – mostly student loans – which accounted for 32.6 percent of the institutions’ ABS investments. Credit card ABS...(Includes one data chart) Read More

Securitization Industry Braces for Impact of New Rules on Conflict of Interest, Assigned Ratings

Wall Street is trying to cope with the considerable ambiguity that officials see in emerging rules on conflicts of interest in securitization and a potentially troublesome federal program that changes how issuers arrange credit ratings for their deals. The conflict-of-interest rule was included in the Dodd-Frank Act as an attempt to prevent participants in the securitization process from structuring deals that allow them to profit at the expense of investors. “When this rule first came out, it was not bad; you could probably live with this in most cases,” said Kenneth Morrison, a... Read More

Latest Imf News

More Imf News

Featured Data

More Featured Data

Featured Reports

More Latest Reports

Featured Poll

As homeowner equity continues to build, more and more lenders are launching home equity lending products. Are you thinking of joining this market?

View Results