Consumer ABS

London-based fixed-income specialist BlueBay Asset Management has lost the cohead of its distressed debt funds, according to a report in the Financial Times.

As the hunt for yield sends investors looking further down the credit curve in CMBS and RMBS land, market sources said that another good place to look might be in esoteric asset classes.

Dealer floorplan ABS losses currently remain low, with performance metrics within range of historical levels. U.S. dealer networks have been exhibiting some stability and improvement in certain areas since the middle of last year. With the U.S. economy and auto industry stabilizing, automobile sales have picked up, all contributing to higher dealer profits as dealership costs declined, a notable change from the tremendous stress that dealerships were feeling in 2008 and the first half of 2009.

After experiencing a barrage of criticism for their tardy downgrades, the top three ratings agencies are seeking to regain credibility by tailoring their research efforts to better meet the needs of investors.

Although covered bonds and ABS are starting to be regarded as alternatives to one another, market experts said that these two markets could definitely co-exist. For one, these products have very different sets of buyers. The two also have varying liquidity and structural advantages and constraints.

Despite the devastation in the wake of the global financial crisis, there are certain areas of the securitization market that present opportunities for investors.

In terms of issuance, diversified payment rights (DPRs) deals have made a poor showing so far this year, with Scotiabank Peru the only originator to have hit the market.

As of press time, the Argentina province of Chubut was approaching the finish line for the issuance of a $150 million deal backed by oil and gas royalties.

Last June the Basel Committee released the calendar for implementing adjustments to the Basel II market risk framework.

For 1H10, public ABS issuance reached $25.76 billion, according to preliminary figures from the ASR Scorecards database. This figure dropped from $50.7 billion for 1H09.