CIT Group, which has securitized FFELP loans in the past, is preparing to launch its first private student loan ABS deal. Deutsche Bank is expected to be lead manager on the $95.1 million PARTS Student Loan Trust 2007-CT1 transaction. The portfolio's underlying loans carry a weighted average FICO score of 741, and among other structural features has a pledge fund provided by the Lutheran Education Assistance Resource Network.
The shifting of seats has begun at trading desks in the ABS market amid the fallout in the subprime mortgage sector. Word has it that JPMorgan Securities' ABS trading desk recently recruited Colin Sheen, a mortgage trader from Merrill Lynch, as well as two traders from Banc of America Securities. Before joining Merrill Lynch, Sheen worked at Morgan Stanley.
Deutsche Bank Securities has hired Charles Lee to join its global banking division as a director in the global commercial real estate group, focusing on CMBS and CDO execution. Lee, who is based in New York, reports to managing director and head of CMBS securitization Lainie Kaye. The new hire will also report to managing director and global head of CRE CDOs Emile Van-Den-Bol. Lee joins Deutsche Bank after a 10-year stint at JPMorgan where he was most recently a vice president on the commercial real estate securitization team. "We are extremely pleased to add an experienced real estate and structured finance pro like Chuck to our team, which reflects the continued growth of our global commercial real estate business," said Toby Cobb, managing director and co-head of U.S. CRE.
The Commercial Mortgage Securities Association (CMSA) has hired Brendan Reilly as senior vice president in government relations, a new position at the association. The new hire, based in the association's Washington, D.C. office, will focus on promoting CMSA as an advocate of the commercial real estate capital market finance industry with the administration, regulatory agencies, and Congress. Aside from focusing on CMSA's legislative efforts toward a permanent program for terrorism risk insurance, Reilly's priority will also be to collaborate with trade associations involved in capital markets, as well as member-company lobbyists, on issues that are of importance to CMSA's membership. Prior to CMSA, Reilly was the assistant vice president of federal government affairs for the Independent Insurance Agents & Brokers of America (IIABA). At IIABA, Reilly led association efforts on the Terrorism Risk Insurance Extension Act of 2005, natural disaster legislation, and tax issues.
IHOP Corp. announced last week that its subsidiaries priced a $200 million securitization. The private securitization comprises $175 million in fixed-rate notes and a revolving credit facility of $25 million in variable funding notes. According to the company, most of the funds from this financing will be used to repay the firm's existing debt and fund share repurchases.
Fitch Ratings launched its Italian-language Web site last week. The rating agency said that the site is dedicated to Italian-speaking users, with content relevant to the local market and that usage is free. The site provides access to Italian-language commentary and research including ratings, press releases, credit updates, ratings criteria, presale reports and research. Users can check out the site at: www.fitchratings.it.
GCO Education Loan Funding Corp. launched a private consolidation loan program as a complement to its array of educated borrower private student loan products. The educated borrower loans offer products for students and families at every phase of their education process, from K-12 through postgraduate study. This new program will offer students up to a 45% reduction in their monthly payment amount in their first year of repayment. "Students and families are faced with a tremendous monthly burden once their private loans enter repayment. We have designed our product to address this cash flow stress," Robert Culnane, managing director of GCO ELF, said in a release.
He explained that GCO engineered this product to lower monthly payments by structuring a first-year interest rate that is well below market rates, minimizing the accrual of interest in the first year; providing an option of making interest-only payments in the first 24 months; and extending the loan term to 30 years. "With no penalty for early repayment, the borrower is provided with the flexibility they need in the early years, when cash flow can be tight," Culnane said. The educated borrower private consolidation loan also offers a 0.25% interest rate reduction if the borrowers elect to have their monthly payment deducted from their checking account. Additionally, certain borrowers may be eligible for a reduction in their loan balance after 48 consecutive on-time monthly payments.
The U.S. Small Business Administration last week set terms and conditions for its relationship with the Business Loan Center or BLX. The SBA will be increasing its oversight of the firm's small business lending operations and will be requiring independent reviews of the loans that BLX originates in a move aiming to protect taxpayers from losses that have resulted from fraud. This increased oversight is a result of loan fraud charges that were filed by the U.S. Department of Justice against 19 people related to loans that were originated by the small business loan issuer, some of which were guaranteed by the SBA. As part of the terms, BLX agreed to buy back certain loans that default after these loans have been sold into the secondary market. BLX will also be required to present those loans to the SBA for examination. BLX-originated loans that are guaranteed by SBA will also be subject to an independent review at BLX's expense before they could be sold in the secondary market.
More than 100 institutions in Europe now rely on Lewtan Technologies' ABSNet for credit surveillance and analysis of their securitization portfolios, the group announced last week. Lewtan said that ABSNet usage has increased by more than 300% over the last year. ABSNet clients consist of buy-side and sell-side, market participants and others who use ABSNet for credit surveillance, market research, and cash-flow analytics. ABSNet now tracks more than 2,000 European transactions, covering over 10,000 securities, and more than 17,000 transactions globally, covering over 180,000 securities. While ABSNet's growth closely parallels the expansion of securitization throughout Europe and North America, the service also includes transactions from other markets such as Russia, the Pacific Rim, and South Africa. ABSNet has subscribers from more than 30 countries throughout North America, Europe, Asia, and Australia. "The demand across Europe for ABSNet has risen dramatically," said Aloysius Fekete, director, product marketing, for Lewtan and its European ABSNet operations. "Given the growth in hedge funds over the last decade, the increasing cost of credit protection on single-name and basket credit default swaps of ABS, and the uncertainty surrounding certain nonconforming residential and credit-card deals, the credit performance data provided by ABSNet is vital."
CDS IndexCo., which comprises 16 investment banks licensed as market makers in the CDX indices, added Fitch Ratings as one of the rating agencies that would determine an entity's inclusion in the indices, along with Moody's Investors Service and Standard & Poor's. This change to the inclusion rules governing CDX will take effect on March 20 during the next index roll. Brad Levy, managing director at Goldman Sachs and acting chairman of CDS IndexCo, said including Fitch's ratings opinions will make name selection for the index more robust.
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