Westwood Capital, an investment bank specializing in structured finance, securitization and merger advisory work, hired Vinay K. Jindal to join the New York-based office as an associate. Vindal will assist the firm primarily in areas of structured finance and restructurings. Jindal was part of the investment banking group at Banc of America Securities, providing technical and analytical support for transactions, including mergers and acquisitions, initial public offerings and secondary offerings."
Last Tuesday, the Financial Accounting Standards Board (FASB) decided to proceed toward a ballot draft of a proposed amendment to FASB 140. There is no indication of when the Exposure Draft of the proposed amendment will be available. FASB also decided to further restrict the activities of a QSPE beyond what was previously announced. The restrictions are as follows: 1) If a QSPE has the ability to reissue beneficial interests, neither the transferor or any of its affiliates or agents can be the party making decisions about reissuing those interests; 2) A QSPE may not hold any equity securities; and 3) In a two-step securitization, the second step should be to a QSPE. (There was much confusion during this discussion about legal concepts versus accounting objectives. The market has to wait to see the wording of the two-step restrictions before concluding on the significance of this decision.)
Moody's Investors Service placed several notes issues by Gleacher CBO 2000-1 Ltd. on watch for possible upgrade last Wednesday. According to the rating agency, the upgrade watch is due to the anticipated amortization of $6.7 million in class A notes relating to a failed O/C test for the class D notes, which "recalls" cash from the collateral manager, trustee and class E noteholders. "This watchlist action is in response to the revised Note Valuation Report dated May 21, 2003, relating to the May 9, 2003 Payment Date," the rating agency stated. The notes are on watch "pending the payment to the Class A Notes from the funds being recalled..." The following notes were included in the announcement: the $276 million class A floating rate notes due May 9, 2012; the $33 million class B-1 floating rate notes due May 9, 2012; the $10 million class B-2 fixed rate notes due May 9, 2012; and the $13 million class C floating rate notes due May 9, 2012.
Louisiana legislators are contemplating a bill that would allow the state to securitize what is left of its national tobacco settlement revenue, according to a report by The Bond Buyer. However, considering the uncertainty hovering over the sector, officials stated that a deal would only happen if the market for tobacco bonds improves. Last Tuesday, a bill authorizing the sale of 40% of the state's tobacco settlement proceeds after June 30 was sent to the House appropriations committee. The report said that this translates into a $624 million bond offering depending on market factors, said the State Board Commission.
Fitch Ratings has downgraded 18 classes from eight UCFC Manufactured Housing issues. Since UCFC's October 1998 exit from the MH business and its subsequent Chapter 11 bankruptcy filing, Fitch has taken numerous rating actions on the company's MH bonds. Fitch said that the rating actions reflect poor loan performance, which has caused significant interest shortfalls to both the noninvestment-grade as well as the investment-grade bonds. Fitch also cited the uncertainty around the servicing operation due to the bankruptcy. In December 2000, EMC Mortgage Corp. (EMC) acquired the servicing rights for UCFC's MH portfolio.
Morgan Stanley's $728.517 million 2003-1Q CMBS deal priced last Thursday. The issue priced within talk, with the 9.69-year WAL tranche at 35 basis points over swaps. The only tranche to come tight of talk was the BBB- slice at 160 basis points over swaps, which was five basis points through talk, considered indicative of current market spreads. The deal was brought via joint leads CIBC and Merrill Lynch, although it has eight collateral contributors. At nearly 45%, the collateral is primarily composed of retail property (see ASR 05/26/03).
Freddie Mac reported a new record low in 30-year fixed rate mortgage rates for the week ending May 30 -5.31% versus 5.34% the week prior. The15-year fixed rate mortgage rate was unchanged at 4.73%, also a record low, Meanwhile, the one-year ARM rate rose two basis points to 3.63%.
Existing home sales rebounded more than expected in April. Sales of existing homes jumped by 5.6% to 5.840 million units. The pace of resales has averaged 5.83 million units in the first four months of this year. This showing easily exceeds the record set in 2002 of 5.57 million. Meanwhile, new home sales increased by 1.7% to a seasonally adjusted level of 1.028 million, the third fastest pace on record. It is also the eighth month out of the past nine that new home sales are over the 1-million unit pace. Strong new home sales were actually surprising, as April's numbers rose further from an already robust March reading.
Freddie Mac reported a new record low in 30-year fixed rate mortgage rates for the week ending May 30 -5.31% versus 5.34% the week prior. The15-year fixed rate mortgage rate was unchanged at 4.73%, also a record low, Meanwhile, the one-year ARM rate rose two basis points to 3.63%.
