CDOs/CLOs

Last week, the New York Attorney General's office reminded Sallie Mae and Student Loan Express that they had no right to involve universities in underhanded tactics to generate business. The University of Pennsylvania also acknowledged that it received fees from Citibank to refer student loan borrowers to the institution.

ECC Capital Corp. said last week that one of its units is suing a subsidiary of Bear Stearns, seeking more than $20 million for an alleged breach of contract over the sale of a residential mortgage loan portfolio.

While some CDO issuers have packed up and left the home equity loan space amid worsening credit performance, others say they plan to stay put. Perhaps the difference between the two camps depends on where, exactly, in the HEL space they've been camping out in recent months.

Specialty auto finance company Santander Consumer USA's buyout by Banco Santander Centro Hispano last December complemented its ongoing efforts to expand product offerings to dealers and compete more effectively with other lenders. The latter takes a lot of money.

New York City-based Columbus Nova formed a Special Opportunities Fund to invest in middle-market companies through all levels of their capital structures, and the firm recruited a team from Trimaran Capital Partners to manage the effort.

get an FHA loan, Barclays says

Sometimes, originators just want to handle their issues on their own terms - and from their own shelves. Such independent thinking, argue some, is what characterized a lot of securitization transactions in the first quarter and changed the lineup of top-ranked lead underwriters.

In a quarter punctuated by sharply deteriorating subprime mortgage collateral, some CDO underwriters, such as Merrill Lynch, posted substantial gains in year-over-year volume. Meanwhile, others took a noticeable turn in the opposite direction, according to Thomson Financial 1Q07 manager activity rankings.

After several weeks of reaping retribution for its scorching and somewhat precarious rise, subprime mortgage performance continues to inspire worries of spillover effects into other ABS sectors. While it is too early to definitely say whether subprime mortgage performance will affect the auto ABS (see story p.7) sector, market participants say, they point to a set of perfected practices that so far make credit card ABS deals immune to the recent volatility in mortgages.

The addition of subprime mortgage behemoth New Century Financial Corp. to the growing queue of bankrupt subprime lenders has a number of home equity ABS investors wondering where, exactly, issuance is going to come from this year.