ABS

European cash spreads continue to show signs of tightening. This indicates that investors might be stepping back into the arena.

Fitch Ratings last week highlighted the ability of U.K. CMBS transactions to support significant market value declines.

The three major rating agencies came under attack again last week when the U.S. Senate Committee on Banking, Housing and Urban Affairs held a meeting about the agencies' role in the current credit markets turmoil. Senator Christopher Dodd (D-Conn.) and Senator Richard Shelby (R-Ala.) presided over the hearings.

Through Tuesday, mortgages had made tremendous gains on better buying, below normal supply, tighter swap spreads and lower volatility from the middle of the previous week.

The commoditized CDO market might be kaput, but Avon,

Continued downgrades of market value structures (MVS) - and subsequent restructurings in some cases - have called attention to their sensitivity to pricing dislocations.

The Bank of England threw another lifeline to banks last week, unveiling a new GBP50 billion ($99.3 billion) special liquidity scheme (SLS)

Not all real estate investors are sitting on the sidelines as the mortgage market continues to take a beating.

What a difference the need for cash makes. The securitization market did a brisk business in consumer ABS paper last week, oversubscribing to a USAA auto deal and blowing out a Discover Financial Services credit card transaction.

At the onset of CDO troubles this past summer, market participants predicted that tough times would weed out the established players from the fly-by-night shops. As the CLO market begins to pick up, it appears the predictions might be coming true.

By any standards, Brazilian consumer debt is exploding. The balance of credit cards, payroll-deductible loans, unsecured loans and auto loans totaled R$264 billion ($1.57 billion) at the end of 2007, up 29% from a year earlier.

Dan Sparks, the head of Goldman Sachs' mortgage business, is leaving the firm.

Fitch Ratings has issued a statement responding to the International Organization of Securities Commissions' (IOSCO) consultation report titled The Role of Credit Rating Agencies in Structured Finance Markets. The statement follows the submission of joint comments by the major rating agencies.

FTSE Group appointed Ronnee Ades as business unit head in alternatives. Ades will be responsible for driving growth within FTSE’s existing alternative asset class index series, which includes REITs, commercial property, hedge funds, private banking and infrastructure. She will also focus on identifying opportunities in new alternative asset classes.

The ABX reports released late Friday showed 60+ delinquencies increasing, although at slightly slower rates. Analysts from Merrill Lynch attributed the rise to seasonality. The delinquency increase for the ABX indices was expected and is based on the roll rates and the 30-59 and 60-89 day delinquency pipelines. However, the pace of increase in 60+ day delinquency levels seems to be slowing.

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

Mortgage rates jumped this week, according to Freddie Mac's weekly survey. "Average rates on mortgages increased across the board this last week as the most recent economic data raised inflationary concerns in the capital markets," said Frank Nothaft, Freddie Mac vice president and chief economist. This reduced the expectations of a cut in the Fed Funds rate to 25 basis points at next week's Federal Open Market Committee meeting from 50 basis points expected prior to the news.

Residential Capital (ResCap), an indirect wholly owned subsidiary of GMAC Financial Services, has appointed Thomas Marano, former senior managing director and global head of MBS and ABS at Bear Stearns to serve as ResCap's non-executive chairman of the board of directors. Marano succeeds former chairman Michael Rossi. As announced previously, Rossi resigned from the board effective March 17 because of medical reasons. Aside from joining the ResCap board, Marano has been appointed to the board's executive committee where he will serve with ResCap's chief executive officer Jim Jones.

Ambac Financial Group, parent of bond insurer Ambac Assurance Corp., announced a net loss of $1.66 billion in the first quarter driven by losses on subprime-related securities the monoline guarantees, including nearly a billion dollars in actual payments the company expects to make.

Springfield and Boston, Mass.- based Babson Capital Management has acquired Murray Capital Management (MCM), a distressed debt and special situations management outfit based in New York.