News
The Federal Deposit Insurance Corp. has awarded a Bear Stearns special servicer subsidiary, EMC Mortgage Corp., as the winning bidder for Superior Bank's portfolio of residuals. The actual dollar amount of the portfolio was not determinable as of press time, although the residuals were, at one point, valued at about $1.1 billion, before suffering several mortal write-downs. Overvaluation of residual interest was a primary factor in the failure of Superior Bank.
EMC is no stranger to the business of acquiring headline portfolios. The company acquired the servicing rights of failed subprime/manufactured housing concern United Companies Financial Corp in 2000. UCFC filed for bankruptcy protection in March 1999.
Fitch has warned CMBS investors to be careful when they invest in certain sale/leaseback financings, specifically those transactions which represent a last-ditch effort by troubled companies to obtain financing when traditional corporate funding has become unavailable or too expensive. In a release, the rating agency said that it had reviewed several sale/leaseback transactions and is particularly eyeing firms who are pursuing this financing strategy that are on the brink of bankruptcy and may subsequently shut their doors. Fitch also cautioned investors to carefully review sale/leaseback transactions where investment-grade rated proceeds exceed a highly-stressed value of the property.
Fitch has announced new rating criteria to evaluate CDO asset managers. The rating agency has expanded its review of CDO asset managers to include qualitative and quantitative metrics as criteria to rate CDO asset managers for every asset class that they manage CDO portfolios for. Examples are bank loans, high yield bonds, asset-backed securities, high grade corporates, and emerging market credits
Analysts from Fitch said the varying performance records of CDO asset managers and the continuing evolution of the CDO market gives rise to the need for greater scrutiny of CDO asset managers. The ratings will be used to enhance the rating agency's credit rating analysis and provide investors with clear measures for asset manager capabilities.
Moody's Investors Service last week downgraded four classes of Peachtree Franchise Finance's issued securities. Class A-1 through Class F notes remain on review for possible downgrade. The downgrade was based on the resolution of the workout for the second largest borrower in the pool, which is makes up roughly 10% of the pool. The borrower is a Burger King franchisee, with the loan proceeds used to buy units in Alabama and Washington. The collateral for the loan is a leasehold interest. The notes remain on review based on several delinquent loans in the pool.
People
Steven Odesser has joined HypoVereinsbank's New York office as a transactor in the asset-backed finance unit. In his new position, Steven will originate, structure and execute private securitization transactions. He reports to Mark Hirshorn, managing director of the ten-member team. Steven comes from the asset securitization group at CIBC World Markets where he structured and executed a wide variety of transactions for its asset-backed commercial paper programs.
Clarification
In last week's story concerning Enron Corp., Alex Roever's comment on accounting firms was misconstrued. Roever meant that certain accounting firms were taking a closer look at all their off-balance sheet transactions, not transactions specifically associated with Enron.
Calendar 2002
Feb. 6-9: Phoenix, Arizona Information Management Network will host the seventh annual investors' and issuers' summit on Asset Securitization 2002. For more information visit www.imn.org.
Feb. 10-13: Scottsdale, Arizona The Strategic Research Institute will host the ninth annual Asset Securitization 2002 symposium, an investor and issuer forum. For more information, visit www.srinstitute.com.
Feb. 25-26: New York, New York - Information Management Network will present the fifth CDOs 2002: Brave New World. For more information visit www.imn.org.
March 24-25: Las Vegas, California - Banc of America Securities will host the fourth annual ABS and MBS investor/issuer forum. For more information contact Covell Day at (704) 388-7835 or gmgevents@bankofamerica.com.
April 7-10: Orlando, Florida Standard and Poor's will host the 17th annual Structured Finance Seminar. For more information visit www.standardandpoors.com/Events/Articles/pdf/PostcardforEBLAST.pdf
May 14-15: Royal Park, Tokyo Japanese Securitization will be hosted by the Information Management Network. For more information, visit www.imn.org.
June 17-19: Barcelona, Spain Information Management Network will host the sixth annual Global Asset Securitization. For detailed information visit www.imn.org.
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