CDC IXIS Financial Guaranty (CIFG) is applying its freshly minted triple-A wrap to a $318.5 million structured finance CDO for Vanderbilt Capital. Vanderbilt's Bristol is believed to be CIFG's first U.S. deal. Officials at CIFG could not be reached as of press time (see p. 6).
ING Barings is a favorite to win the mandate to issue Mexico's first MBS master trust, pinned at nearly US$1 billion (see ASR 10/14 p.1), according to market sources. The trust is being cobbled together by government agency Sociedad Hipotecaria Federal (SHF), which may pick other issuers in addition to ING, sources said. "It's likely we'll see at least two issuers in the beginning," a source said. What structuring role the issuers will play remains to be seen, as SHF has already completed some of the work.
Vivendi Universal, which is the parent company of Universal Pictures, is reportedly considering a $1 billion securitization backed by box-office receipts. This transaction is supposedly part of a deal to extend a $1.62 billion loan, which the company received last May to purchase Barry Diller's USA film and television properties. Vivendi announced last Tuesday that JPMorgan & Bank of America Corp. had agreed to extend the repayment for eight months until June 30.
It rumored that Salomon Smith Barney is going to start bringing 12b-1 securitizations to the term (144A) market. Salomon and Bear Stearns are the only two players that are currently in this sector, said sources. Thus far, Salomon has been doing it exclusively via their conduit. The idea is to broaden the investor base for the product. Sources say that there is a market for it, provided that index options are used to hedge the risk. Salomon's first transaction was supposed to close last week.
The Bond Market Association and the American Securitization Forum submitted a joint comment letter to the International Accounting Standards Board last week. The associations urged the IASB to "carve out the Proposed Amendments' derecognition provisions related to transfers of financial assets. We believe that this important topic is best dealt with separately, as a joint project with standard setters in the countries where securitization is a well-established capital-raising technique."
Last week MicroFinancial, a periodic issuer of micro-ticket equipment lease ABS, announced that it would substantially pair down or end its origination focus in favor of expanding its presence as a servicer. The performance of MicroFinancial's ABS is not at issue, said a ratings analyst. MircroFinancial has issued ABS backed by assets such as credit card swipers, ATM machines, and other point-of-service equipment.
The announcement, on the surface at least, is reminiscent of Centerpoint Financial Services' halting its origination effort, followed by a servicing transfer earlier this summer to U.S. Bancorp Portfolio Services, the servicing unit of trustee U.S. Bancorp. Fitch Ratings has taken action on several of the late 1990 deals from Centerpoint. Moody's Investors Service currently has two Centerpoint transactions from 2000 and 2001 on watch for downgrade. Action is expected imminently.
The 11 formerly triple-A rated classes of Green Tree MH Trust downgraded by Standard & Poor's last week will remain Lehman Index-eligible, the bank's research group announced, after the ERISA eligibility came into question following the rating action. Most of the 1999-1 through 1999-6 and 2000-2 through 2000-6 senior notes were already in the Index, according to Lehman. Since the eligible bonds were issued prior to the July 2000 rule changes that expanded ERISA eligibility to all investment-grade rated bonds, versus the triple-A only rated MH bonds previously allowed in the Index.
Strong demand for mortgages pushed total outstanding loans in the Federal Home Loan Banks' Mortgage Partnership Finance (MPF) Program to $34.5 billion at the end of the third quarter. This is up 64% from a year earlier, according to a company release last week. The portfolio of MPF conventional loans also showed significant growth, increasing 154% year-over-year. Also, for the first time ever, over $1 billion of MPF mortgages were funded on a single day. Eighty-two different lenders were involved in funding these loans. MPF volume for the entire third quarter reached $6.1 billion, which is 37% more than funded during the same quarter in 2001.
White House and congressional negotiators moved closer to an agreement on federal assistance for terrorism risk insurance, according to congressional aides and lobbyists last Thursday. Negotiators reached a "common understanding" early in the day on a formula for a federal assistance to insurance companies for future terrorist acts, a Senate Democratic aide said. Senator Chris Dodd, D-Conn., Rep. Michael Oxley, R-Ohio, the White House and Treasury officials were working on the final details.
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