CDOs/CLOs

CLO market players will be more discerning about transactions in the second half of this year, according to panelists at a Loan Syndications and Trading Association seminar held in New York last Wednesday. The participants highlighted the recent slowdown after $57 billion in CLOs were issued in the first half of 2007.

Things will never be the same in the extendible note (EN) portion of the ABCP sector, and that is the way investors want it. The buy-side community made its wishes plain over the past two weeks, firmly refusing to buy much new extendible note ABCP debt, especially the sort that funded MBS and CDO debt via single-seller vehicles.

Fitch Ratings has responded to the subprime market turmoil by revising its criteria for measuring mortgage default and loss risk for newer vintages. The methodology now takes into account current credit risks that have sent the U.S. RMBS market into a tailspin, including high-risk loans, significant changes in adjustable-rate mortgages and declining home prices in certain regions.

MGIC Investment Corp. and Radian Group were not the only stakeholders to lose confidence in the outlook for the subprime market last week. Across the entire consumer ABS spectrum, capital markets investors dug in their heels and held onto their cash so tightly that they virtually shut down the new-issuance ABS market last week.

Figuring out how to finance a college education is a notoriously confusing and frustrating process. It is not always clear to borrowers exactly how much a loan will cost once it is approved, how much of the debt should be repaid before graduation or how to effectively manage and repay the thousands of dollars owed after graduation.

As the subprime RMBS market continues to face uncertainty, prime loans might be hit next - not surprising given the loose underwriting standards that characterize all of the 2006 vintage. These expectations come amid 2006 vintage resets and increasing concern over Alt-A collateral.

Business is booming for cell tower lease operators, thanks to the busy lifestyles that prompt Americans to rely more heavily on wireless communication devices, advanced technology that could take advantage of the industry's existing infrastructure and high barriers to entry that create a virtually protected market. Capital market experts expect to see steady growth in the securitization of cell tower lease payments, which parallels gains in the wireless telecommunications business.

INVESCO Senior Secured Management (ISSM) plans to close a synthetic CLO early this month, referencing $500 million in high yield bank loans through a series of total return swaps. The deal, Hudson Canyon Loan Fund, is being arranged by Citibank, which is also the protection buyer. LaSalle Bank is the trustee on the transaction.

arclays posted robust first-half results last Thursday, earning nearly $8.1 billion, up 12% from last year's first half, and citing its investment banking division as one of the drivers. Grant Kvalheim, co-president of Barclays Capital and head of investment banking, spoke with IDD about those results, and more.

This May, Sen. Carl Levin (D-MI) introduced the Stop Unfair Practices in Credit Cards Act (S.1395), pro-consumer legislation that could significantly impact the credit card industry, and which will possibly have a ripple-effect impact on the securitization of credit card receivables. Sen. Levin introduced the legislation after an investigation by the Permanent Subcommittee on Investigations, which he chairs, into the billing practices of the credit card industry.