CDOs/CLOs

With major investment banks testing the waters, Intellectual Property (IP) securitizations have been seeing a lot of activity lately.

In India, a stream of well-intended but unfulfilled plans to get real estate investment off the ground brought about the saying: in the country, REIT stands for Real Estate Investment Tour. Craig S. Phillips, former global head of securitized products at Morgan Stanley, said he has seen enough of the country to persuade him that India's southern region is finally ready to support a meaningful investment of capital.

Over the past week, several investment banks began hosting situation room' type sessions to begin reckoning the damage to the subprime industry and the industry's prospects for the rest of the year. The mood among many analysts, investors and other market professionals was unquestionably downcast - and somewhat humbled - at press time.

An ugly cloud continued to hover over Southern California's otherwise beautiful, unseasonably warm weather last week. And no, it was not the smog. It was the ugly, frenzied turmoil that's struck the subprime lending industry faster than anyone seemed to expect.

These days, one would be hard-pressed to find an area of the capital markets that has not been influenced by CDO practices, in one way or another. Now the reinsurance and capital markets industry has SelectCat, a product developed to guide the reinsurance and capital markets in hedging and pricing risk on certain managed portfolios they mean to protect.

Moody's Investors Service team managing director and co-head of the term asset-backed securities team Kumar Kanthan has decided to relinquish his position for personal reasons. Kanthan will be working part time for the rating agency as a senior vice president in the asset finance group, focusing on the group's programs such as its enhanced publication efforts and initiatives related to enhancing methodologies and analytical tools. After transitioning his current responsibilities, Kanthan will "fulfill his desire to carve out some more time to pursue his personal interests outside of work," according to an internal memo.

by Steven Stubbs, Aoto Kenmochi, CFA, and Raman Kalra Ph.D., Fitch Ratings

Bear Stearns analysts last week refuted claims that the current turmoil in the subprime mortgage market would result in ABS CDO blowups similar to those experienced years ago from losses on manufactured housing loans and high yield bonds.

Full Credit to Book (Equal if Joint) U.S. Public ABS Market/144A Market Managers Proceeds (mils) Rank Mkt. Share # of Issues JP Morgan 3,069.4 1 27.4 7 HSBC Holdings PLC 1,458.7 2 13.0 2 Barclays Capital 1,348.8 3 12.1 2 Banc of America Securities LLC 1,347.1 4 12.0 3 Wachovia Corp 1,210.7 5 10.8 3 ABN AMRO 1,116.9 6 10.0 2 Royal Bank of Scotland Group 599.3 7 5.4 1 Credit Suisse 550.0 8 4.9 1 Morgan Stanley 492.3 9 4.4 1 Industry Total 11,193.2 - 100.0 12 Source: Thomson Financial

Full Credit to Book (Equal if Joint) U.S. Public ABS Market/144A Market Managers Proceeds (mils) Rank Mkt. Share # of Issues Merrill Lynch 12,297.4 1 24.4 13 Citigroup 10,120.5 2 20.1 11 Barclays Capital 6,136.6 3 12.2 4 UBS 5,924.0 4 11.8 7 Deutsche Bank AG 3,067.3 5 6.1 6 Bear Stearns & Co Inc 2,572.0 6 5.1 5 Morgan Stanley 2,551.6 7 5.1 9 JP Morgan 2,542.5 8 5.1 5 Banc of America Securities LLC 1,869.0 9 3.7 3 Lehman Brothers 965.0 10 1.9 2 Industry Total 50,311.3 - 100.0 69 Source: Thomson Financial