CDOs/CLOs

With a decent showing this year already, RBS Greenwich Capital is planning a significant expansion of its CDO group, affirming its commitment to the sector with the hire of Romita Shetty, who starts later this month. Shetty was formerly responsible for global structured products at JPMorgan Securities.

A $325 million securitization of diversified payments rights from Turkish commercial bank Garanti Bankasi recently hit the private placement market, sources said. Two monoline bond insurers wrapped the transaction.

The first national correspondent for UCC Capital Corp. in the life sciences sector was announced last week as the firm moves into expansion mode, a rollout that also included the launch of a new Patent Royalty Trust, aimed at academia.

Standard & Poor's rated global structured securities performed better during the second quarter of 2004 than during the first. The upgrade rate for structured finance securities was more than three times the downgrade rate. This positive trend was pronounced across many sectors but was most noticeable among U.S. RMBS ratings. A review of the performance suggests continued strength among U.S. RMBS ratings and therefore upgrades, a significant increase in European and U.S. CMBS upgrades, and a significant decline in U.S. ABS downgrades. A notable increase in European ABS downgrades is due primarily to lowered ratings in the aircraft ABS area. Globally, in addition to aircraft ABS, a few other ABS asset types and CDO sectors continued to show weaknesses in their rating performance during the second quarter of the year.

Year to date as of 07/15 Term (days) 07/09 07/12 07/13 07/14 07/15 1-week

SuperLumina Funding, a newly rated multi-seller ABCP conduit, plans to fund about $1.25 billion in U.S. dollar, triple-A rated new-issue CDOs as its first course of business.

A Westport, Conn.-based credit card issuer, which targets college undergraduate and graduate students, is marketing its inaugural securitization, with the hopes of launching this week. Specialty monoline credit card issuer Clout Financial teamed up with the more familiar M&I Bank to bring Clout Financial Credit Card Trust series 2004-1, a $110 million Ambac-wrapped fixed-rate offering via Societe General, in the Rule 144A markets last week.

As market participants recovered from the long holiday weekend, U.S. ABS primary issuance slowed to an indolent trickle. Total volume was a meager $1.8 billion, with only $1.3 billion actually pricing. Analysts expect the calendar to build quickly over coming days as issuers begin to ready their transactions for the market, according to a report from Credit Suisse First Boston.

The practice of "notching" adjusting ratings, or refusing to rate, certain asset pools in a structured product unless a substantial portion of the assets are rated by the same agency rating the structured product has been a controversial issue for the wider debt markets for some years now.

The recently announced sale of Boullioun Aviation Services by WestLB will likely lead to an aircraft lease securitization shortly after the transactions' close, said sources with knowledge of the situation. Boullioun's attractive lease portfolio and forward delivery schedule, combined with the likely financial needs of potential acquirers, have many expecting an ABS from the new entity, depending on which competitor purchases the unwanted unit.