ABS

Brown Rudnick has brought together staff from its structured finance, bankruptcy and corporate restructuring and distressed debt practices to form a structured resolution group.

As market participants move forward into 2008, many have hopes of liquidity returning to the ABS market. To this end, increased deal transparency is paramount to bringing investors back into the space, market sources said.

Many view securitization as the culprit behind our subprime woes. However, the basic tenet of securitization remains a valuable financing tool whose benefits have yet to be fully realized. Though commonplace in the private sector, securitization is largely foreign to public finance, particularly in the troubled transportation sector. This article addresses the compelling case for applying securitization techniques to reduce airport financing costs for beleaguered airlines and helping address capacity constraints at high "origin and destination" airports such as JFK, LaGuardia, Newark and LAX.

Best of Times, the Worst of Times

As more banks realize the liquidity potential in European covered bonds, issuance volumes are expected to rise in 2008.

Reflecting the tone of markets worldwide, the second half of the year was a tough time for issuance from emerging markets in the CIS (former Soviet Union countries) and in Turkey. Among the deals tracked by ASR, the total ABS volumes in these areas - including a couple of domestic Russian transactions - amounted to about $5.9 billion, a steep decline from $9.6 billion in 2006 (see table, p. 28-29).

The Latin American cross-border market was energized by a few watershed events in 2007, especially in the field of existing assets. But volumes still failed to reach the heights of previous years, and the same troubles afflicting other arenas of structured finance crushed activity in the second half of 07.

Depending on the criteria, volumes in Brazil's structured finance market either boomed or tanked last year. Factoring in private deals that are widely understood to be entirely tax-motivated, volumes hit about R$15.5 billion ($8.7 billion), a nearly 29% leap from 2006, according to data collected by local consultancy Uqbar.

Full Credit to Book (Equal if Joint) U.S. Public ABS Market/144A Market Managers Proceeds (mils) Rank Mkt. Share # of Issues JPMorgan Securities 1,578.8 1 23.378 3 Wachovia Securities 1,223.8 2 18.121 2 Goldman Sachs 1,078.7 3 15.972 2 ABN Amro 906.7 4 13.426 2 RBS Greenwich Capital 744.5 5 11.024 1 Credit Suisse 625.0 6 9.254 1 Citigroup Global Markets 334.2 7 4.949 1 Banc of America Securities 261.8 8 3.877 1 Industry Total 6,753.5 - 100.0 6 Source: ASR Scorecard database

Full Credit to Book (Equal if Joint) U.S. Public ABS Market/144A Market Managers Proceeds (mils) Rank Mkt. Share # of Issues Industry Total 0.0 - 100.0 0 Source: ASR Scorecard database

Full Credit to Book (Equal if Joint) U.S. Public ABS Market/144A Market Managers Proceeds (mils) Rank Mkt. Share # of Issues JPMorgan Securities 4,312.7 1 27.144 3 Banc of America Securities 4,200.0 2 26.435 5 Citigroup Global Markets 3,400.0 3 21.4 2 Deutsche Bank Securities 1,512.7 4 9.521 2 Barclays Capital 1,066.7 5 6.714 2 Credit Suisse 896.0 6 5.639 1 Wachovia Securities 500.0 7 3.147 1 Industry Total 15,888.1 - 100.0 11 Source: ASR Scorecard database

Full Credit to Book (Equal if Joint) U.S. Public ABS Market/144A Market Managers Proceeds (mils) Rank Mkt. Share # of Issues Lehman Brothers 1,715.6 1 100.0 2 Industry Total 1,715.6 - 100.0 2 Source: ASR Scorecard database

Full Credit to Book (Equal if Joint) U.S. Public ABS Market/144A Market Managers Proceeds (mils) Rank Mkt. Share # of Issues Deutsche Bank Securities 511.2 1 33.331 1 Barclays Capital 511.2 1 33.331 1 Citigroup Global Markets 511.2 1 33.331 1 Industry Total 1,533.7 - 100.0 1 Source: ASR Scorecard database

auto ABS 30% credit card ABS 56% real estate ABS 8% student loan ABS 7%

Generally speaking, the preference of the private sector is for government entities to keep their bright ideas and legislative actions as far away from commerce as possible.

Congressional leaders and the White House were busy announcing a $150 billion economic stimulus plan that aimed to benefit consumers and businesses last week. The package would deliver stipends of up to $1,500 per household, and give tax incentives for businesses to continue spending.

Despite widespread objections from securities professionals, the Financial Accounting Standards Board (FASB) is expected to approve a set of policies that would, in most cases, require financial institutions to link the initial transfer of a security and the subsequent repo financing for accounting purposes.

Credit Suisse's plan to lay off 500 people is part of a streamlining of its roughly 20,000 member investment banking businesses, sources familiar with the situation said last week.

Talk of increased transparency is in the air, and Wells Fargo Corporate Trust Services has chimed in with the launch of its Collateral Risk Manager service, a product that allows issuers and investors to conduct in-depth analysis on their structured product portfolios. The goal is to allow users to make more timely and well-informed decisions about their holdings.

Market value ABS CDOs have taken a beating from declines in the value of their underlying collateral. And now, the recent downgrades on synthetic CLOs backed by total return swaps have demonstrated that falling prices in the loan market have put CLO structures at risk too.