CDOs/CLOs

The outlook for the securitization market in 2009 is bleak. Problems related to ABS are manifold and a recovery of the securitization market is not yet in sight. On the one hand, the future prospects of the securitization business highly depend on a stabilization of the financial industry overall. On the other hand, the credit cycle downturn will clearly test the solidity of European structured finance notes. Uncertainties related to ABS are high. An apparent example for the current market dislocation is the CLO sector - European leveraged loan CLOs are on the radar screens as undercollateralization is imminent.

Steven Hilfer has joined Experian as senior director of business development to support the firm’s capital markets business.

Treasury Secretary Timothy Geithner's announcement of the revamped Financial Stability Plan proved to be a showstopper during the American Securitization Forum's (ASF) annual industry conference held earlier this month in Las Vegas. But reactions were mixed.

With the onslaught of illiquid assets - particularly displaced MBS and CDO bonds - the development of a market for these securities becomes essential as well as useful not only for the companies that profit from them, but more importantly, the economy as a whole.

Following through on a transformation plan announced last year, MBIA last week said it has restructured its insurance subsidiaries to form a new U.S. public finance-only insurer that will operate separately from its structured finance business.

On Feb. 4, Moody's Investors Service revised the methodology it uses to rate CLOs, spurring a rash of CLO downgrades that has yet to end. As a result, CLO managers have begun requesting amendments to their reinvestment periods to relieve the pressure, sources said.

Standard & Poor's has lowered its counterparty credit, financial strength, and financial enhancement ratings on MBIA Insurance Corp. (MBIA) to 'BBB+' from 'AA'. The outlook on MBIA is negative, according to a release from S&P.

"No matter how cynical you get, it is impossible to keep up." -Lily Tomlin.

Shares for troubled Belgian bank KBC suffered heavy losses this month amid concerns about the bank's exposure to fragile emerging markets as well as its need to raise fresh capital.

For CLO managers, watching the declining performance of their underlying collateral has been about as much fun as a Tijuana jail. And it doesn't look like they'll make bail anytime soon.