Last Tuesday, Union Acceptance Corp. received its third extension from a bankruptcy-court order preventing bond insurer MBIA from attempting a forced servicer change since filing Ch. 11 Oct. 31. A press release from the company - also announcing an undisclosed side bar to the court proceedings - was scheduled for a Friday release. The latest extension allows UAC to continue servicing its portfolio through March 31, a company spokesperson confirmed, allowing UAC to seek its second portfolio sale since Dec. 17. Currently UAC is seeking buyers for roughly $300 million of receivables currently warehoused by Bank of America N.A.
SG Cowen has named Jimmy Frishling as head of its North American CDO operation, replacing Lisa Underwood, who is no longer with the firm. There is no word as to where Underwood was headed.
The federal regulators issued finalized credit card lending guidelines last Thursday with new language on over-limit fee changes implying regulators still disapprove of subprime over-limit authorization. Capital One is said to be the most obvious beneficiary of these developments On Wednesday, the FFIEC also issued a release saying that the four federal banking agencies will not proceed with a July 2002 proposal that would have required data on subprime consumer lending programs to be disclosed in quarterly call reports.
Eleven firms involved in securitization markets made it to Fortune Magazine's list of "100 Best Companies To Work For," including some of the top issuers in the asset- and mortgage-backed markets. The highest-ranking company within the securitization world was World Omni Financial Corp. parent JM Family Enterprises, which ranked 14, up from 20 the year before.
Within ABS issuers making the list, by rank are as follows: MBNA (22), American Express (36), AmeriCredit (43) and Marriott International (74). Mortgage players listed were: Fannie Mae (45), First Tennessee National Corp. (54), Washington Mutual (97) and Principal Financial (100). Additionally, accounting firm Deloitte & Touche ranked number 79 and underwriter Goldman Sachs & Co. ranked 35th.
Moody's placed the ratings of nine CMBS transactions on watch for possible downgrade. The rating agency cited interest shortfalls caused by legal fees and administrative expenses incurred by master servicer Wells Fargo in ferreting out terrorism-insurance issues. Wanting to now be compensated for these expenses , the firm has indicated that they are going to charge the trusts. This would result in a two-month interest payment lapse for lower-rated classes. What differentiates the interest shortfalls on these large loan deals is that the bonds experiencing the shortfalls are predominantly investment grade, which is a rarety.
Standard & Poor's said last week that the credit performance of CMBS has been particularly strong over nearly the past decade. This would suggest that pooled commercial mortgages have been carefully underwritten with unique credit performance characteristics. These findings were part of "Credit Performance of U.S. CMBS," which shows the results of a study examining as of Sept. 2002, the cumulative principal losses and the potential future losses of 237 pools of multi-borrower CMBS issued in the U.S. that were rated by one or more of the three U.S. rating agencies between 1994 and mid-2002. The miniscule losses that the pools have incurred so far, along with their potentially more significant but still limited losses in the future, demonstrate the strong credit performance of CMBS, said the rating agency.
Moody's said European CMBS issuance totaled 29.1 billion euros (about $30.5 billion) in 2002. Transactions seen in the market during the year were an average 1 billion euros (approximately $1.05 billion) in size. Twenty-eight European CMBS transactions were completed in 2002, the rating agency stated.
Jan 22: American Securitization Forum Management Committee Conference Call is scheduled for 10:00 a.m. For more information visit: http://www.americansecuritization.com/meetings.html; or contact Dwight Jenkins at 646-637-9232
Jan 27: New York, NY - Strategic Research Institute presents The Future of Off-Balance Sheet Financing & Structured Finance - SPEs Challenged! at the Marriott Marquis hotel in Manhattan. For more information visit: http://www.srinstitute.com/part_iter_site_page.cfm?iteration_id=488