CMBS

Standard & Poor’s today cut its projection of U.S. CMBS issuance in 2012 to $35 billion from $45 billion. That would translate to flat growth from this year’s estimate. The agency reduced its forecast thanks to three consecutive months of rising spreads, an uncertain economic outlook and a slowdown in origination by lenders.

Using different styles and tactics, Jamie Dimon of JPMorgan Chase & Co. and Vikram Pandit of Citigroup Inc. are making the same argument: policymakers have already done enough to rein in risk-taking. Doing more, particularly tacking on a capital surcharge for the largest firms, the CEOs insist, will crimp credit and in turn chill economic growth.

A sample of comments in response to the SEC's rating agency reform proposals suggests the market could find itself in a situation where the government must balance its interest in oversight and control with its plans to avoid more responsibilities and liabilities. It also may need to balance its aim to restrict conflicts of interest with another reform goal involving more sharing of information and transparency.

An enhanced version of the ratings rule 17g-5 would provide additional benefits that would reduce both issuer conflict of interest and the concept of ratings shopping.

European CMBS Maturity Repayment Index changed only marginally during September on the back of full and partial redemptions totaling EUR140.9 million($187mn).

Esoteric or nontraditional assets are gaining momentum to claim a bigger piece of the ABS market.

U.S. structured finance players are exploring new frontiers. With ABS issuance volume not as robust as it once was, yield-hungry investors have turned to esoteric assets.

The Dodd-Frank Act's call for the creation a self-regulatory organization (SRO) or other entity to assign new ratings was mostly panned by structured-finance industry participants, but relying on existing Rule 17g-5 - the industry's preferred alternative - may have a fatal flaw.

Santander Consumer is in the market with an auto deal under its Santander Drive Auto Receivables Trust 2011-4. The company filed with the Securities and Exchange Commission (SEC) for a $750 million offering.