As of press time, the Financial Accounting Standards Board (FASB) had not released its final drafting of ARB No. 46, the latest rendition out of the SPE consolidation project, now dubbed "Consolidation of Variable Interest Entities."

The board indicated that the final guidelines would be released on Friday of last week - after ASR's Thursday night close.

The commonly held view is that bank sponsors will be made to consolidate the assets contained in their multi-seller ABCP conduits, though it's also believed the individual sellers might restructure mini-QSPEs that do not need to be consolidated, or otherwise consolidate the assets themselves. If the sponsor or the seller is made to consolidate, the use of the conduit could lose some of its economic luster.

Further, in its current form, the analysis for expected losses and residual returns, when applied to CDOs, could "result in a determination that the collateral manager is the Primary Beneficiary of a CDO entity even if the collateral manager owns little or none of the equity and its fees are market- based," said Marty Rosenblatt of Deloitte & Touche last week, referring to summaries that FASB has posted on its Web site.

Regardless, market players are anxiously awaiting the final decisions, so as to best position themselves for implementation (or to begin restructuring arrangements).

For market color and commentary on the draft that was distributed to a select group of "insiders" in mid-December, see ASR 01/06/03.

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