ABS

The Education Resources Institute (TERI) filed for Chapter 11 yesterday. According to a report from Barclays Capital, Moody’s Investors Service's downgrade of TERI to 'B2' from 'Baa3' on March 26 tripped a trigger in a loan contract. This resulted in the student loan firm’s having to post cash to cover its student loan guarantees.

U.K. battered mortgage lender Northern Rock reported a loss of £199 million ($391.55 million) over the year compared to a profit of £443 million in 2006.

Local government bodies in the Australian state of New South Wales have been forbidden from making new CDO investments and other structured credit products until December 2009.

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

Sen. Edward Kennedy (D-Mass.) introduced legislation that would improve access to federal loans and increase the amounts of Pell Grants for certain college students, saying that Congress “cannot allow problems in the credit market to prevent students from going to college.”

Despite its current difficulties, Bear Stearns took the top spot in the U.S. RMBS manager rankings for 1Q08, according to Thomson Financial data. The bank rose from a second place finish for all of 2007 and third place in the first quarter of last year.

Fitch Ratings said that last week's downgrade of UBS AG to AA-' from AA' does not have a negative impact on the ratings of the Broadgate Financing PLC securitization.

Without a doubt, a puzzle looms over the student loan finance business. How will students continue to finance their educations amid the potential withdrawal of $20 billion from Federal Family Education Loan Program (FFELP) programs, reductions in subsidies to lenders that provide certain FFELP loans?

Through the worst of Argentina's post-devaluation recession, a securitization of oil and gas royalties originated by the province of Salta made good on its payments. But now, six years after the economy touched bottom and subsequently entered a prolonged growth spurt, the province may end up doing what many Argentine issuers did six years ago - restructure.

Moody's Investors Service last week downgraded domestic deals in Mexico wrapped by FGIC to Aa3.mx' from Aaa.mx.' While the agency had downgraded monoline-wrapped emerging-market deals on its global currency scale before last week, this move marked the first time Moody's lowered the rating on wrapped deals on Mexico's national scale. GMAC Financiera is the originator of the deal, which is

The U.K. nonconforming lending market got smaller last week when the news of two more lenders stepping out of the game hit the European market - Southern Pacific Mortgage Loans (SPML) and Preferred Mortgage Loans (PML), which are both units of Lehman Brothers.

Camulos Capital closed Camulos Loan Vehicle 1 last Wednesday, kicking off the second quarter with positive news in the way of new issuance. The $731 million cash flow CLO, which is the first CLO for the manager, offered triple-A to double-B paper in five tranches priced at 85, 250, 300, 500 and 800 basis points, according to ASR Scorecards database. Morgan Stanley underwrote the deal, and Citigroup is the trustee.

Even with the U.S. Treasury making an aggressive attempt to revamp the country's financial system, market experts believe that there is not much chance of this happening in 2008.

The subprime mortgage meltdown continues to alter the asset securitization market. In the first place, issuance was just $63.8 billion, a 71.7% plunge from the $225.6 billion in transactions that the industry completed at the end of the first quarter last year. With business down by more than two-thirds from last year, it left leading investment banks to juggle the bad news of writing down losses and imposing layoffs while trying to get work done, too.

U.K. nonconforming lenders continue their exodus from the market. This has left borrowers with little option for refinancing and left lenders facing mounting arrears.

With origination of securitizable assets slipping among leading developed countries, the vice grip on global liquidity still unshakable, and Western European investors loathe to buy all kinds of ABS and MBS, it would follow that Russian originators of securitizable assets would be yanking the reins on their galloping pace of lending.

ABS market professionals spent much of last week tallying up production from the first quarter. Notwithstanding the typical sluggishness brought about by the opening days of a new fiscal period, volumes were modest.

Moody’s Investors Service yesterday downgraded three tranches from Caja Madrid's high LTV Spanish RMBS, Madrid RMBS II. The deal priced in December 2006 and by August last year, Caja Madrid reported it had tapped the securitization's reserve fund for €846 million ($1.32 billion), or 1.4% of its required amount.

Credit deterioration for U.S. CDOs was almost wholly contained to U.S. dollar-denominated resecuritizations in 2007, according to a recent study by Moody’s Investors Service. Moody's downgraded a total of 1,331 tranches of U.S. dollar-denominated resecuritizations in 2007, which accounted for 92% of the 1,448 downgrade actions for all CDOs during the year.

Christopher Beaudet, who was a managing director and co-head of the ABS group at Deutsche Bank Securities, left the company recently. While at Deutsche, much of Beaudet’s focus was on the securitization of auto loans and leases, equipment leases, commercial loans and franchise loans. He joined the company in February 2000 as part of a group of bankers that Deutsche recruited from what was then Credit Suisse First Boston. He was credited with building Deutsche into one of the top underwriters of auto and equipment ABS in recent years. His departure leaves Andrew Peisch, also a managing director who joined in 2003, as sole managing director and head of the ABS group at Deutsche.