Fitch Ratings posted a decline in revenue of 9.1% in dollars during its first fiscal quarter, according to Fimalac S.A., its parent company. Coupled with expectations of slow ABS issuance for the rest of the year, Fimalac said it would lay off about 150, or roughly 7% of its employees by yearend. The company said it would also reduce variable compensation expenses. The rating agency reported revenue of $202.1 million for the company's first fiscal quarter, compared with $222.3 million for the same period a year earlier. The company's first fiscal quarter ran from October to December 2007. Fimalac said the outcome was expected, due to volatility in the credit markets, which led to decelerating issuance activity. Mortgage-backed securities in the U.S. and global CDOs were the sectors whose plummeting revenue and activity suppressed the company's earnings results. "Considering the continuing restricted issuance activity and uncertainty in credit capital markets, based on the information currently available and provided there are no significant change in market conditions, some of Fitch Ratings' businesses are expected to be less buoyant than in the past," according to a company statement. Therefore, said Fimalac, its revenues for the fiscal year ending Sept. 30, 2008 could decline within a range of 10% to 15%, compared with fiscal year 2007. Revenue from corporate finance ratings, comprised of banking, corporate and public finance, continued to grow, according to a company statement. Despite the latest results, Fimalac says it sees opportunities to provide various business services to the financial services industry through Fitch Ratings and the division Fitch Solutions, which was created in January. Also, the company announced last Friday that it would begin to rate paper issued by Canadian ABCP conduits.
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Broken down by product type, the agency's NJCLASS Standard Fixed product should account for a large majority of the loans, 75.4%. NJCLASS Consolidation will account for the next-largest group, 14.1%.
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The notes will price against Treasurys, with spreads expected to fall between 85 and 90 basis points over the benchmark.
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The JPMorgan Chase CEO took aim Tuesday at the proposed Basel III endgame rules, hindrances to mergers and bureaucratic burdens. "I would love to have a more productive relationship with regulators, but I think it takes conversation," Dimon said.
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Bluegreen Vacation originated the loans and Fitch expressed confidence in its record of good performance as servicer.
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Many legal experts think the Supreme Court will rule in favor of the Consumer Financial Protection Bureau in a case challenging its funding. Such a ruling would unleash a flurry of litigation that has been on hold pending the outcome of the constitutional challenge.
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Lendbuzz sells the notes as it juggles mixed performance results from 2023. Originations and revenues saw huge jumps, but so did operating expenses.
April 23