Peter Hoffman started last week as a director in ABS origination at Merrill Lynch, reporting to group head Ted Breck. Hoffman joins from Fleet Securities. His responsibilities will be developing asset based finance and securitizations in the entertainment, sports finance and intellectual property space. Hoffman had been with Fleet for about 10 years.
Tiziana DiTullio is trading her spreadsheets for a camera. After five years on the Latin America structured finance team of Moody's Investors Service, she is off to France, where she will pursue photography. Her last day will be June 27. No word yet on a potential replacement.
Despite doubling it gross premiums in the 1Q03 period, surety provider XL Capital Assurance reported a $2.4 million 1Q03 loss, versus the $2.5 million it lost over the same period last year, its first quarter of operation. XLCA reported that gross premiums written in the first quarter totaled $33.2 million, compared to the $14.5 million of business over the same period last year.
NaviStar Financial filed last week with the Securities and Exchange Commission to sell its first dealer floorplan ABS in three years, according to the amended S-3. The token $1 million filing still requires SEC approval before NaviStar can bring any deal to market. The last time NaviStar sold dealer floorplan ABS was June 30, 2000, when it priced $212 million of 2000-1 notes via Banc of America Securities. No underwriter was named in the documents.
Student lender Nelnet plans to offer a pair of $1 billion student loan securitizations in late June or early July, a company official said. The Aurora, Co.-based lender has received SEC approval on its recently filed $2 billion shelf and plans to access the market for the first time since its Jan 19 sale of $1 billion of student loan collateral Jan 29 via Banc of America Securities and Deutsche Bank Securities.
Fitch Ratings followed suit last week and downgraded certain classes of four outstanding auto loan ABS issued by Mitsubishi Motor Credit Corp. of America, due to the adverse performance of balloon and deferred payment loans in the portfolio. Deals that saw senior bonds cut include 2001-3, 2001-4, 2002-1 and 2002-2, which were also cut the previous week by Standard & Poor's. In addition, Fitch placed the remaining outstanding classes from MMCA 2002-3 on watch for a possible downgrade.
Freddie Mac estimates that Remic issuance volume for 30-year 5% coupons will total $5.7 billion in June, the GSE reported last week, with supply dipping slightly to $5.4 billion in July. Additionally, FHLMC estimates it will bring $8.9 billion in 15-year 4.5% Remics in June, with no estimate given for July.
While changes in eligibility qualifications to the Lehman Brothers U.S. Aggregate Index will reduce its MBS exposure by 46 issues, there is no impact on the bank's ABS index, sources said. While the benchmark index has increased minimum size requirements to $200 million from $150 million, qualifications for the separate ABS Index will remain $500 million total deal size and $25 million tranche size. Corporates, by contrast, will lose approximately 586 deals, for a total of $86 billion of the more than $3.6 trillion of corporate unsecured debt exposure.
The Mortgage Bankers Association of America announced last week that favors a national standard to combat predatory lending, rather than allowing states to set laws individually. The MBAA's reasoning is that states do not have access to the funds needed to correctly address the problem.
Countrywide Financial Corporation last week commented on rumors circulating in the market related to accounting matters and its financial statements. Countrywide said that although it does not, in practice, respond to such market rumors, management firmly believes that there is no basis whatsoever for these rumors and stands behind the integrity of its accounting practices and financial statements.
Last Tuesday Moody's Investors Service said that it maintains "a high degree of confidence in Freddie Mac's risk management capabilities and overall financial strength," notwithstanding the firm's recent management changes and accounting woes. Though Moody's was disappointed about the GSE's accounting difficulties, the rating agency believes that Freddie retains both an exceptional business franchise and strong creditworthiness. On June 9, Moody's confirmed its ratings for Freddie Mac's senior long-term debt (Aaa), subordinated long-term debt (Aa2), short-term debt (Prime-1) and non-cumulative preferred stock (Aa3). All of these ratings have retained their stable outlooks.
The MBAA announced that due to falling interest rates, it is now forecasting that mortgage originations will reach $3.3 trillion this year.
This far exceeds the record of $2.5 trillion set in 2002. In the Association's latest Mortgage Finance Forecast, the MBA estimated that 68% of the $3.3 trillion in loans will be refinancings. The total volume of mortgages for home purchases will probably total $1.07 trillion by year-end, increasing 5% from $1.02 trillion in 2002.