William Grady and George Graham, former co-heads of principal finance at Salomon Smith Barney, have left the bank to start their own venture, named Gryfon Partners LLC., with the purpose of making equity investments in non-mortgage assets that can be leveraged through securitization. Prior to spearheading the principal finance effort in May (see ASR 5/13/02), the duo ran the global asset-backed finance group. Principal finance remains a unit under the global securitized products umbrella, noted MD and global group co-head Jeffery Perlowitz. No successor to Graham and Grady has been named as of yet. Graham joined Salomon in 1984 and Grady in 91.

The Bond Market Association announced last week the formation of a new CDO Committee. The committee will be chaired jointly by Salomon Smith Barney managing director Janice Warne, as well as Jerry DiVito and Christopher Ricciardi, both managing directors at Credit Suisse First Boston. The committee is a dealer-based group, which will focus on market practices within the underwriting community.


The Financial Accounting Standards Board has issued FASB interpretation no. 45 on Guarantor's Accounting and Disclosure Requirements for Guarantees, according to Deloitte and Touche. This provides that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. This applies on a prospective basis to guarantees issued or modified after 12/31/02.

President George W. Bush has signed the terrorism insurance bill (H.R. 3210). The bill provides $90 billion in federal reinsurance for property and casualty insurers over the next three years. It seeks to help ensure that terrorism insurance is affordable and available. President Bush said the bill will help the economy since many construction projects have been halted due to lack of adequate terrorism insurance. Though clearly considered a positive development for the single-asset CMBS universe, industry observers are still in a wait-and-see mode. Success of the bill largely depends on the reaction of the insurance industry (see last week's ASR).

The American Bankruptcy Institute stated that bankruptcy filings by individuals and businesses jumped by 12% to a record total of 401,000 over the three months ending in September. The institute also said that new bankruptcy filings in the 12 months ended Sept. 30 exceeded 1.5 million, topping the record of 1.4 million set in 2001. Researchers said that higher bankruptcies have historically been correlated with faster seasoned premium Ginnie Mae speeds. When bankruptcies have gone up in the past, FHA/VA borrowers comprised a bigger percentage of these filings compared to non-FHA/VA

borrowers. They added that an increase in bankruptcies could cause a surge in seasoned premium Ginnie prepayments. This is a result of servicers taking advantage of cheap

funding to buy delinquent loans out

of GNMA pools.

The GSE loan limit increased to $322,700 from $300,700. Analysts said that this would allow Fannie Mae and Freddie Mac to gain a bigger share of the jumbo market (jumbo loans between $300,700 to $322,700). They added that prepayments should increase as these borrowers refinance into conventional loans.

Sales of new single-family homes decreased by 4.5% in October, but remained above the 1.0 million mark for the third consecutive month. The U.S. Department of Commerce stated that new-home sales went down to a seasonally adjusted annual rate of 1.01 million units in October from 1.05 million in September. Sales dipped in the Northeast and the Midwest, while rising in the South and the West. The inventory of unsold new homes rose to a 4.1-month supply in October from a 3.8-month supply in September.

Fitch Ratings upgraded GMAC Commercial Mortgage's (GMACCM) master servicer rating to CMS2+' from'CMS2' and primary servicer to CPS2+' from CPS2'. The rating agency cited enhancements that were made to the primary servicing processes as well as technological improvements that contribute to improved work flows and data management. The master servicer upgrade reflects GMACCM's proven ability to effectively monitor and report CMBS transactions as well as oversee primary servicers, stated Fitch.


January 8, 2002: New York, NY: Strategic Research Institute is hosting "The Future of Off-Balance Sheet Financing & Structured Finance" on Jan 8 2003 at the Marriott Marquis in New York City. To register call 1-888-666-8514 or email


Please disregard last week's Cross Sector Volume chart on the ABS data page. The correct numbers have been printed this week.

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