Finance

For collateral managers who focus on CDOs, the most recent stream of troubling news in the financial sector has further shaken up an industry already reeling from more than a year's worth of nega-

The third quarter of 2008 brought a dramatic reorganization of the global banking system and a virtual shutdown in the credit markets. Financial guarantors, which have been battling downgrades for months now, have seen new structured finance opportunities seize up.

Fannie Mae announced two weeks ago that it would cancel the planned increase in its adverse market delivery fee. The hike would have taken effect Nov. 1.

Manager Activity: AutosFull Credit to Book (Equal if Joint) U.S. Public ABS Market/144A Market

More bad news for the MBS sector came in this week, according to a recent report from RBS Greenwich Capital, which showed that housing starts plummeted in September by over 6%, the lowest level since 1991.

The Mortgage Bankers Association (MBA) has hired Len Wolfson to be director of legislative Affairs.

Fitch Ratings announced that it has started a review of its counterparty criteria for global structured finance transactions.

The Bank of New York Mellon (TBNY) has been selected by the U.S. Department of the Treasury to help implement the government's Troubled Asset Relief Program under the Emergency Economic Stabilization Act.

The Treasury Department Tuesday morning said it would use $250 billion of taxpayer money earmarked for the new Troubled Asset Relief Program to invest in dozens of the nation's depositories, including some of the largest: Bank of America (which now owns Countrywide Home Loans), Citigroup, JPMorgan Chase, Merrill Lynch, and Wells Fargo.

Moody's Investors Service withdrew the 'Ca' issuer rating for The Education Resources Institute (TERI).

Fitch Ratings said today that U.K. nonconforming RMBS face increasing downside as a result of the current declining performance trends and downward pressure on house prices.

Eclectica Asset Management appointed Joe Rouncefield and Camilla Panton to its sales and marketing team.

Manager Activity: AutosFull Credit to Book (Equal if Joint) U.S. Public ABS Market/144A Market

Recent events in Russia are putting its RMBS under tighter scrutiny.

Despite getting an increase in the liquidity support originally pledged toward saving Hypo Real Estate (HRE), Pfandbriefe tied to the bank continue to suffer from disruptive pricing, Dresdner Kleinwort analysts said. The increase was to >50 billion ($68.4 billion) from >35 billion.

Gordian Knot has put up a good fight, weathering blow after blow amid the financial crisis. Its SIV, however, has finally had to call it a day, thus becoming the last independent SIV to go into receivership.

Monolines said they are still hopeful that they can find a niche in Europe via the municipal bond market, said speakers at the monoline panel at Information Management Network's second annual European CLOs, Structured Credit Products, and Credit Derivatives Summit.

Given the way the securitization market has dissolved over the past 14 months, the industry needs to make a case for why securitization is needed, said a senior official of Britain's Financial Services Authority (FSA) at Information Management Network's second annual European CLOs, Structured Credit Products, and Credit Derivatives Summit held in London last week.

Speakers on the opening panel at Information Management Network's second annual European CLOs, Structured Credit Products, and Credit Derivatives Summit said that the medium- to long-term outlook for the securitization market is positive, although it will be a bumpy ride along the way.

The more interesting story about September prepayments came in GNMAs, where speeds increased more than expected: 8% versus 1%. 2007 vintages were sharply higher in 5.5s, 6s and 6.5s; these surged a respective 80%, 63% and 28% from August's average.