ABS

Information Management Network's 11th annual ABS East conference kicks off this week, nearly one month earlier than usual, and is expected to be even bigger than last year with over 2,800 delegates and 128 sponsors were registered to participate as of last week. ABS players from around the country will be treated to four days worth of panel discussions and entertainment at the world-class Boca Raton Resort and Club in Boca Raton, Fla.

In spite of the shortened holiday week, the ABS primary market managed to generate $17 billion as issuers and managers rushed to get deals done before the upcoming ABS East conference in Boca Raton, Fla.

In the wake of the devastation wrought by Hurricane Katrina, the question on most people's minds in the ABS market is how deals in some of the non-mortgage related ABS sectors will respond, and how badly the damage will affect deals in those sectors. Luckily, unlike in the Gulf coast region itself, it appears as if the ABS market will weather the storm.

As talk of the housing bubble bursting looms and affordability mortgage products proliferate, ASR chatted with Accredited Home Lenders Inc. Chairman and CEO Jim Konrath to discuss his company's future prospects.

Year to date as of 09/08 Term (days) 09/02 09/05 09/06 09/07 09/08 1-week

Full Credit to Book (Equal if Joint) U.S. Public ABS Market/144A Market Managers Proceeds (mils) Rank Mkt. Share # of Issues JP Morgan 8,270.8 1 13.6 13 Merrill Lynch & Co Inc 7,246.0 2 11.9 9 Citigroup 6,870.1 3 11.3 12 Deutsche Bank AG 6,594.6 4 10.9 12 Banc of America Securities LLC 5,684.6 5 9.4 9 Barclays Capital 4,782.8 6 7.9 9 Wachovia Corp 4,742.9 7 7.8 10 Credit Suisse First Boston 4,561.9 8 7.5 9 Goldman Sachs & Co 3,564.1 9 5.9 4 HSBC Holdings PLC 2,771.4 10 4.6 4 Industry Total 60,776.8 - 100.0 59 Source: Thomson Financial

Full Credit to Book (Equal if Joint) U.S. Public ABS Market/144A Market Managers Proceeds (mils) Rank Mkt. Share # of Issues JP Morgan 10,569.1 1 31.2 21 Citigroup 4,698.3 2 13.9 15 Deutsche Bank AG 3,274.6 3 9.7 14 Barclays Capital 2,799.0 4 8.3 10 Morgan Stanley 2,216.5 5 6.6 4 Banc of America Securities LLC 2,041.2 6 6.0 8 Credit Suisse First Boston 2,038.2 7 6.0 7 ABN AMRO 1,833.2 8 5.4 7 Royal Bank of Scotland Group 1,135.8 9 3.4 4 Merrill Lynch & Co Inc 759.8 10 2.3 5 Industry Total 33,840.7 - 100.0 68 Source: Thomson Financial

Full Credit to Book (Equal if Joint) U.S. Public ABS Market/144A Market Managers Proceeds (mils) Rank Mkt. Share # of Issues Merrill Lynch & Co Inc 16,256.7 1 18.3 24 Citigroup 11,695.8 2 13.2 25 Morgan Stanley 7,184.7 3 8.1 27 Wachovia Corp 6,951.2 4 7.8 15 Bear Stearns & Co Inc 5,730.8 5 6.5 15 Deutsche Bank AG 5,279.6 6 6.0 14 Lehman Brothers 5,147.7 7 5.8 16 UBS 4,453.1 8 5.0 11 Banc of America Securities LLC 3,996.2 9 4.5 19 Credit Suisse First Boston 3,654.0 10 4.1 9 Industry Total 88,640.0 - 100.0 214 Source: Thomson Financial

Full Credit to Book (Equal if Joint) U.S. Public ABS Market/144A Market Managers Proceeds (mils) Rank Mkt. Share # of Issues Deutsche Bank AG 2,400.7 1 18.3 4 Morgan Stanley 2,041.7 2 15.6 3 Barclays Capital 1,492.5 3 11.4 2 Credit Suisse First Boston 1,243.6 4 9.5 2 ABN AMRO 1,243.6 4 9.5 2 Citigroup 944.1 6 7.2 2 Banc of America Securities LLC 750.0 7 5.7 1 Lehman Brothers 725.8 8 5.5 1 JP Morgan 725.8 8 5.5 1 HSBC Holdings PLC 566.7 10 4.3 1 Industry Total 13,114.5 - 100.0 11 Source: Thomson Financial

Full Credit to Book (Equal if Joint) U.S. Public ABS Market/144A Market Managers Proceeds (mils) Rank Mkt. Share # of Issues Lehman Brothers 49,990.9 1 11.2 91 Bear Stearns & Co Inc 41,662.7 2 9.3 92 Royal Bank of Scotland Group 37,608.4 3 8.4 62 Credit Suisse First Boston 36,807.4 4 8.3 79 Countrywide Securities Corp 36,755.1 5 8.2 44 Morgan Stanley 33,289.6 6 7.5 44 Deutsche Bank AG 31,905.1 7 7.2 62 Citigroup 26,096.2 8 5.9 52 Banc of America Securities LLC 24,139.8 9 5.4 52 Merrill Lynch & Co Inc 23,183.8 10 5.2 35 Industry Total 446,222.0 - 100.0 847 Source: Thomson Financial

Full Credit to Book (Equal if Joint) U.S. Public ABS Market/144A Market Managers Proceeds (mils) Rank Mkt. Share # of Issues Citigroup 8,972.0 1 23.7 12 Banc of America Securities LLC 4,831.0 2 12.8 8 Morgan Stanley 3,883.6 3 10.3 4 Deutsche Bank AG 3,826.2 4 10.1 6 Credit Suisse First Boston 3,367.9 5 8.9 5 Merrill Lynch & Co Inc 2,965.8 6 7.8 3 UBS 2,527.7 7 6.7 5 Lehman Brothers 2,138.5 8 5.7 2 Goldman Sachs & Co 2,127.2 9 5.6 4 JP Morgan 1,808.5 10 4.8 4 Industry Total 37,869.3 - 100.0 32 Source: Thomson Financial

auto ABS 17% credit card ABS 8% global MBS 4% real estate ABS 59% student loan ABS 9% other 4%

Leveraged super-senior trades - which are gaining popularity in the European market - are close to making a debut in the publicly rated U.S. synthetic CDO market, with at least one rating agency looking at five of the deals. The deals achieve their leverage, generally eight-to-12 times above the super-senior tranche, by posting only a portion of the collateral's notional amount but receiving the full spread. Further separating the leveraged super-senior from a senior synthetic CDO tranche, the arranger has the option to unwind the transactions and transfer mark-to-market swap costs to investors.

After an 18-month struggle, the path is finally clear for Houston-based CenterPoint Energy to issue its $1.89 billion stranded cost ABS. Last week, the Texas State Attorney General's office and other groups that had previously opposed the deal agreed not to lodge another appeal, removing the final roadblock for CenterPoint to bring its deal to market. Sources say the deal could be in the market by the end of the year.

Deals from Drive Financial Services and DriveTime, two regular nonprime auto ABS issuers, will no longer be in danger of being confused for one another. That is because the Dallas-based Drive Financial recently sued Phoenix-based DriveTime in order to force that company to stop using the name DriveTime in relation to its ABS deals, according to a source close to the situation.

The long dormant aircraft sector may be getting a shot in the arm soon as two issuers are expected to bring deals in the coming months. G.E. Capital Corp. and debis AirFinance are reportedly planning aircraft lease-backed deals soon, according to a source familiar with the deals. Neither Stamford, Conn.-based G.E. Capital nor Amsterdam-based debis responded to inquiries about the possible deals.

Kingdom Films LLC - a conduit facility created to finance the production, acquisition and distribution of the next 32 live action films that will be produced or acquired by The Walt Disney Co.- closed a private $370 million revolving credit facility last week, said a Walt Disney spokesman who declined to be named. Credit Suisse First Boston acted as the financial advisor and arranger for the transaction.

The ABS primary market generated $20 billion in new issues last week, even as many in the market cooled their heels on summer vacations.

The Metris Cos. Inc. spent three years turning itself around and by this year looked like it finally had the wind at its back. Still, it was not surprising that it decided to sell, given what has been happening in the card industry - consolidation, a cost-of-funding disadvantage versus larger players like its buyer, HSBC Holdings, and coming policy changes that some say influenced Metris' thinking.

Homeowners aren't the only ones scrambling to take advantage of persistently low long-term interest rates - corporations in record numbers are exercising call options on their unsecured obligations in order to lock in low rates while the window to favorably refinance still exists. The result: high yield CBOs are paying down and performing at record levels, making investors that bought those bonds cheap experience a much greater profit than anticipated.