CDOs/CLOs

ABS and MBS hedge fund Highland Financial Holdings Group recruited Sheila Huang as director and portfolio manager of the firm's high-grade strategies division. The move reflects, and continues be part of, ongoing efforts at Highland Financial to grow its personnel along with its business.

Subprime lender Novastar Financial Corp. took a $4 million loss in the fourth quarter related to its first CDO issuance. The loss was a public example of what a number of market participants are speculating about - that CDO issuers are being stung by mark-to-market losses on collateral sitting inside warehouse lines. While the Kansas City-based lender plans to move forward with plans for regular CDO issuance, the combination of volatility within cash home equity securities, wider CDO liabilities and the specter of more restrictive warehouse lines has some thinking the ABS CDO machine could be seeing a slowdown.

Moody's Investors Service is reviewing the Business Loan Express SBA Loan Trust 2001-1 transaction, and might downgrade the deal's affected securities.

New York - As the number of commercial real estate CDO transactions increases, analysts and investors are calling for improved surveillance in a market that still lacks transparency, according to speakers at the Information Management Network's Second Annual Real Estate CDO Symposium held here last week. To that end, ratings agencies are attempting to provide at least some information on this somewhat opaque market, beginning with the managers themselves.

Investment bankers dedicated to the financial institutions sector are making an extra effort to work closely with their debt capital markets teams in order to win a greater share of client business. In many instances reporting lines are getting switched around, ostensibly in the hope of spurring cooperation between the two groups.

Full Credit to Book (Equal if Joint) U.S. Public ABS Market/144A Market Managers Proceeds (mils) Rank Mkt. Share # of Issues JP Morgan 1,952.5 1 21.8 5 HSBC Holdings PLC 1,458.7 2 16.3 2 Barclays Capital 1,348.8 3 15.1 2 Banc of America Securities LLC 1,347.1 4 15.0 3 Wachovia Corp 1,210.7 5 13.5 3 Royal Bank of Scotland Group 599.3 6 6.7 1 Credit Suisse 550.0 7 6.1 1 Morgan Stanley 492.3 8 5.5 1 Industry Total 8,959.4 - 100.0 10 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 Citigroup 6,327.8 1 30.2 7 Barclays Capital 5,673.0 2 27.0 2 Bear Stearns & Co Inc 1,485.8 3 7.1 3 Deutsche Bank AG 1,403.3 4 6.7 4 Banc of America Securities LLC 1,269.0 5 6.1 2 Morgan Stanley 1,251.6 6 6.0 6 Lehman Brothers 965.0 7 4.6 2 JP Morgan 918.0 8 4.4 2 Goldman Sachs & Co 850.0 9 4.1 2 Wachovia Corp 845.5 10 4.0 2 Industry Total 20,988.9 - 100.0 31 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 JP Morgan 5,169.8 1 42.3 6 Banc of America Securities LLC 4,312.4 2 35.3 6 Wachovia Corp 962.5 3 7.9 3 Deutsche Bank AG 516.3 4 4.2 4 HSBC Holdings PLC 500.0 5* 4.1 1 Citigroup 500.0 5* 4.1 1 Lehman Brothers 266.3 7 2.2 3 Industry Total 12,227.2 - 100.0 20 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 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 Citigroup 6,325.4 1 15.0 11 Deutsche Bank AG 4,798.0 2 11.4 6 Merrill Lynch 3,666.8 3 8.7 4 Morgan Stanley 3,496.7 4 8.3 3 Lehman Brothers 3,277.9 5 7.8 8 Countrywide Securities Corp 3,142.0 6 7.5 2 Royal Bank of Scotland Group 2,669.7 7 6.3 4 Barclays Capital 2,492.2 8 5.9 7 Credit Suisse 2,365.2 9 5.6 3 Bear Stearns & Co Inc 2,011.5 10 4.8 6 Industry Total 42,160.3 - 100.0 59 Source: Thomson Financial