ABS

The Federal Reserve announced on Sunday that it had authorized the Federal Reserve Bank of New York to lend directly to both Fannie Mae and Freddie Mac if it becomes necessary for the bank to do so.

Servicers of subprime residential ARM loans have increased their efforts to modify these types of troubled mortgages, according to today’s Moody’s Investors Service report.

Risk of default on leases as well as strain on the values for certain U.S. aircraft types could increase as a result of the high fuel prices, Fitch Ratings reported earlier today.

The Abu Dhabi-based real estate developer Sorouh Real Estate PJSC has plans to begin marketing an AED 4 billion ($1.08 billion) Shariah compliant securitization over the next few weeks, according to market reports.

Lender Processing Services (LPS) named Bob Caruso as executive vice president of strategy and business development.

Shares of Fannie Mae and Freddie Mac fell sharply again Friday morning, with Fannie's stock price down 21% and Freddie's down 22% on the day in morning trading.

Federal regulators tried to assure the financial markets yesterday that mortgage lenders Fannie Mae and Freddie Mac “are adequately capitalized,” while lawmakers said there is a growing consensus that the Federal Reserve Board should be granted more regulatory authority over broker-dealers.

Hertz is slated to issue what will be its first securitization deal outside of the U.S. The 1.5 billion ($2.4 billion) International Fleet Financing 1 will be a multi-jurisdictional transaction covering Australia, France, Italy and the Netherlands.

Mexico plowed forward in June, with about Ps11.2 billion ($1.09 billion) in structured finance issuance, as measured by local shop IXE. That was only a 6% drop from the Ps11.9 billion placed in the same month last year, a clear sign that activity hasn't been severely crimped by retreating liquidity.

The recent departure of Noel Kirnon, global head of structured finance

Moody's Investors Service last week downgraded U.K. mortgage lender Bradford & Bingley's long-term ratings.

Fitch Ratings said last week that the European ABCP market is bottoming out. Recent figures suggest that the worst of the ABCP market contraction is over.

The European primary market remained as slow as ever last week. Deals continue to be originated for central bank repo collateral, and there is no indication of when primary market activity will pick up again, market analysts said.

When the market was in good shape, it drew a parade of Russian lenders keen to finance their brisk clip of mortgage origination.

ABS market trading remained woefully slow last week, according to traders, who said they expected this pace to continue at least until Labor Day.

For the first time since the Canadian securitization market came into existence, issuers are able to sell asset-backed notes to U.S. investors without dealing with withholding tax issues for non-exempt transactions. Elimination of withholding tax on arms-length payments of interest to U.S. investors came at a critical time for many Canadian issuers faced with few, if any, liquidity alternatives. Such issuers are now able to tap the term securitization market and extend the offerings to qualifying U.S. investors. The notes may also have credit enhancement in the form of a performance guaranty where the Canadian originator is a subsidiary of a foreign parent. These securities should be very attractive to U.S. investors looking for highly rated notes.

As deal flow has fallen silent in the subprime mortgage and CDO markets, forecasts that ABS is in its death throes have grown louder and more confident.

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

Wachovia appointed Robert Steel as chief executive officer effective immediately, according to a release from the firm.

Moody’s Investors Service has reviewed the impact of the financial guarantors’ mark-to-market losses relating to CDS’ in a new report released Wednesday.The report is titled Interpreting Financial Guarantors’ Mark-to-Market Losses.