News

Interpool is rumored to be prepping a $800 million some-odd shipping container/chassis deal via Wachovia Securities. The transaction will mark the largest deal of its kind to date and is said to be highly structured.

Consumer Portfolio Services has acquired MFN Financial for $10 per share, or approximately $100 million, according to filings from the companies. The two companies announced their merger intent in November, and closed the deal last week.

Interestingly, both companies securitized subprime auto assets within a week of the merger, MFN tapping the market last week with $100 million term deal via Deutsche Bank. CPS also closed a $100 million securitization facility, which it will eventually take to the term market, CPS said in a release. XL Capital Assurance wrapped both transactions.

MFN Financial is the former Mercury Finance Co., which emerged from bankruptcy in 1999, after an accounting/fraud implosion that began in 1997.

Household International is among the latest companies to drop Arthur Andersen as its auditor. Separately, the company revealed in its 10-K filing last week that it intends to beef its use of securitization conduits facilities, currently at about $10 billion, according to research analysts at Gimme Credit, an independent service on high-grade corporate bonds.

The Redwood Capital II catastrophe bond is looking at printing during the week of March 18th via Lehman Brothers and Swiss Re (joint books). Price talk is currently +250bp area/3ML with a 1.75-year (21 month) maturity, according to IFR Markets. Swiss Re is the sponsor. Investors in the securities provide insurance for 21 months against earthquake losses to property in California.

Senator Chuck Hagel (R-Neb) has requested for a hearing on the accounting practices of Fannie Mae and Freddie Mac, a Senate aide said on Thursday. The request reportedly comes amid rising concerns over the accounting practices of some major corporations in the wake of the collapse of energy giant Enron, which have shaken financial markets recently. According to news reports, Hagel's letter disturbed an otherwise unruffled agency bond market on Thursday, pushing spreads between government and agency bonds wider by 1.5 basis points, said analysts and traders (see related story on p. 14).

Last week Moody's Investors Service released a special comment titled Securitization and its Effect on the Credit Strength of Companies, in which the rating agency presents 100-plus pages of standout research from the past 15 years, the oldest piece dated December 1987, titled Asset Securitization and Corporate Financial Health. Moody's raises issues and offers perspectives on topics such as, "Is it true that securitization transactions transfer risk?" and "How are unsecured debt holders of the company impacted by a securitization?"

CDOs

Katonah III CLO priced at a +44bp/3ML (A/L 7.6y) via CSFB after upsizing to $425 million, from $400 million. Investors said they heard the deal was well received and oversold on all tranches. "The portfolio manager, Joyce Delucca, is supposed to be pretty good, although we haven't purchased any of their deals yet," commented one investor. Katonah's pricing is two basis points tighter than Barclays Capital Asset Management's Venture CLO that priced last month at +46bp/3ML (A/L 8y) on the AAA's.

Morgan Stanley was roadshowing the Newcastle CDO I $500 million structured finance cashflow CDO last week in Europe, coinciding with the release of the reds, investors report. The roadshow will hit the U.S. the week of March 18 and print the week after. Backing the transaction will be approximately 57% CMBS, 25% REIT, 18% ABS/MBS.

People

Jeffrey Mayer and Craig Overlander have been named co-heads of Bear Stearns' fixed-income business. For the time being, Mayer, a senior managing director, is still maintaining his previous role as head of the firm's mortgage- and asset-backed securities department. However, a company spokesman said that the details of the organizational change within the department are still being ironed out.

Calendar 2002

March 19: New York, NY Fitch Ratings will host an ABS Auto Conference from 8:00am to 2:00pm at the Intercontinental Whitney Room. For more information, call 212-755-5900.

March 20-22: Aventura, FL The Bond Market Association presents the Second Annual Risk-Linked Securities Conference at the Turnberry Isle Resort & Club. For more information, call 212-440-9429 or email mgarcia@bondmarkets.com.

March 21-22: New York, NY - The Bond Market Association will host the Municipal Accounting and Financial Analysis Seminar at 40 Broad Street. For more information, call 212-440-9429 or email mgarcia@bondmarkets.com.

March 24-25: Las Vegas, CA - 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, FL Standard and Poor's will host the 17th annual Structured Finance Seminar. For more information call 212-438-2800 or visit http://www.standardandpoors.com/ Events/Articles/pdf/PostcardforEBLAST.pdf

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