ABS

Manager Activity: AutosFull Credit to Book (Equal if Joint) U.S. Public ABS Market/144A Market

Morgan Joseph & Co., a full-service investment bank, expanded the firm’s analytics and trading group that operate in the secondary market for fixed-income structured products by hiring two new members to the team, as announced today by Matthew Stedman, the firm's head of sales and trading.

"Since the beginning of 2007, we have seen a tightening of lending standards and a reduction of introductory offers to new borrowers, which has set the ground for improvement in performance and better positioned these structures to weather a downturn," said Anca Gagea, ABS research analyst at Barclays Capital. "That said, the biggest driver for consumer asset performance is unemployment, and we are seeing that go up in the U.K., which has begun to have an impact on performance."

Northern Rock's Granite Master Trust breached its non-asset trigger, because the current-seller share fell below the minimum on two consecutive distribution dates. The breach is the result of a strategic decision by Northern Rock's management.

Securities Industry and Financial Markets Association (SIFMA) announced the launch of its European Covered Bond Dealers Association (ECBDA).

The U.S. Department of the Treasury and the Federal Reserve announced last Tuesday a program meant to inject liquidity into the beleaguered financial system.

In a market where financial institutions are scrambling to shore up capital with asset sales, firms that facilitate these transactions successfully are poised to emerge from the recession with deeper pockets.

The fallout in the ABS and MBS markets has triggered the development of a new trend: structured finance professionals lending their expertise to asset management shops.

Despite the lack of new deal flow, rating agencies are hard at work making improvements to their evaluation processes in hope of luring back investor confidence and restarting new issuance.

November remittance reports showed continuing performance deterioration, which was largely expected by Street analysts, though still dramatic.

The CMBS market experienced what analysts called a meltdown recently, as super senior triple-A paper saw a significant fall in price.

The market was in brighter spirits before the Thanksgiving holiday, as ABS market participants quite fittingly gave thanks to U.S. Treasury Secretary Henry Paulson, who rolled out a Term Asset-Backed Securities Loan Facility (TALF) under which The Federal Reserve Bank of New York will establish a $200 billion one-year, non-recourse lending facility for newly or recently originated triple-A rated consumer ABS (see story p. 16). This covers auto, credit card, student loans and small business loans that are guaranteed by the U.S. Small Business Administration.

November remittance reports showed a continuing performance deterioration, which was largely expected by Street analysts.

Troubled by the persistently high cost of funding for the GSEs, the Federal Reserve Board said Tuesday it would begin purchasing the debt of Fannie Mae, Freddie Mac and the Federal Home Loan Banks next week.

Securities Industry and Financial Markets Association (SIFMA) announced the launch of its European Covered Bond Dealers Association (ECBDA).

Moody's Investors Service just started a cross-financial sector publication called Moody’s Credit Card Statement that features articles written by the rating agency's structured finance, banking, and retail analysts.

Mission Capital Advisors is now accepting bids for a portfolio of subperforming and nonperforming commercial mortgage loans, secured by various commercial real estate and business assets in the greater Chicago Metro area and various towns in Indiana, with a balance of more than $50.3 million.

Zetabid, a firm focusing on U.S. home auctions, hired Christopher Connelly as senior managing director of Zetabid.

Collins Financial Services USA, a purchaser, collector and reseller of charged-off consumer debt, announced today that it has received debt financing from LBC Credit Partners, a mezzanine fund that provides privately negotiated loans to middle market businesses.

Morgan Keegan & Co., a Memphis unit of Regions Financial Corp., is expanding its fixed-income capital markets division beyond its traditional market in the Southeast.