CDOs/CLOs

The private placement market - which is currently waiting for a pick up in issuance - was graced with a 144A securitization backed by timber receivables.

Hoping to profit from the CDO expansion wave, Wilmington Trust Corp. has formed a subsidiary to operate most of its CDO business. The firm recruited from independent capital markets and risk management consultancy and hired its founder and CEO and president to lead the CDO administration effort at Wilmington.

The asset securitization market has seen several key changes since the beginning of the year, but that is not at all reflected in the lineup of lead manager rankings. Citigroup Global Markets tightened its iron grip on the title as top lead manager of ABS deals by claiming first place in the ranking for the year to date, according to data from Thomson Financial.

Final regulatory guidance for federally chartered bank lenders on so-called non-traditional mortgage products came forth to a relatively receptive market late last month. The guidelines were little changed from those proposed last December.

With the ABS market coming out of one holiday weekend and going into another, plus historical seasonal slowdowns in activity, trading desks were fairly quiet last week. At last tally, market professionals estimated that new issuance would not amount to more than $15 billion.

Merrill Lynch dominated CDO underwriting in the third quarter when it managed more than $14.7 billion worth of deals and increased its market share to 18.2%. In the first three quarters of this year, the investment bank has brought a total of $34.6 billion worth of deals to the market - almost doubling the $18.3 billion it did in the first three quarters of last year, according to data maintained by Thomson Financial. Total CDO issuance as of the third quarter was nearly $227 billion, completely eclipsing the $103.6 billion in CDOs issued to the market by the third quarter in 2005.

After doubling its assets under management and the number of its employees, then consolidating its various businesses into three sectors, Florham Park, N.J.-based GSC Partners has changed its name to GSC Group.

President George W. Bush signed the Credit Rating Agency Reform Act into law last week, setting in motion substantial changes that could revamp the rating agency business by next year.

NEW YORK-Widespread talk of a meltdown in the U.S. housing market - and the effects it might have on the structured finance market through the RMBS sector - have not diminished the popularity of carry trades in the cash CDO market. Indeed, the power play continues to attract a lot of hedge fund and similar fast-money players, said several analysts at the Bond Market Association's (BMA) CDO Investors Conference held here last week.

The International Swaps and Derivatives Association last week unveiled a protocol that will allow cash settlement across a broad spectrum of credit derivative products - including single name index tranches and plain vanilla credit derivatives. The protocol is essentially the same as those used for half-a-dozen credit events since the May 2005 bankruptcy of automotive supplier Collins & Aikman Corp. to settle covered index trades.