CDOs

CLOs continued to squeak out new issuance in the second quarter, making them the only corner of the U.S. CDO market to do so. The good news is that, of the new CLO deals to hit the market, several were structured from fresh loan assets - rather than from balance sheet assets, which have thus far represented most 2008 CLO issuance.

Nine European and global trade associations today released Ten Industry Initiatives to Increase Transparency in the European Securitization Markets in response to the European Council of Finance Ministers’ (ECOFIN) call in its October 2007 roadmap to “enhance transparency for investor, markets and regulators” by mid-2008.

A Goldman Sachs analyst estimates that Citigroup will face an $8.9 billion write-down in its second quarter earnings.

Lehman Brothers said Tuesday it has brought back two senior managers, and promoted two other staffers. Michael Gelband will return to serve as global head of capital markets, and Alex Kirk has rejoined as global head of principal investing. They will report to Bart McDade, the newly named president and chief operating officer at Lehman.

An internal memo made the rounds announcing that the European Securitization Forum (ESF) has developed its own centralized Web portal to link a variety of sources containing information on European RMBS transactions and CDO managers, Royal Bank of Scotland analysts reported.

Many financial institutions, including M&T Bank Corp., got burned by the CDO market's collapse resulting from the crumbling of subprime mortgages.

Morgan Joseph & Co., the New York investment bank, has launched a structured products group, naming Darren Wolberg and Dale Hoffman to serve as co-heads and managing directors of the new analytics and trading unit.

Babson Capital Management has chosen Robert Little to head its real estate finance group (REFG) at the end of 2008, where he will assume oversight of a $22 billion portfolio.

M&T Bank Corp. is suing Deutsche Bank AG for $82 million, saying the Frankfurt company's securities unit sold CDOs that proved an unsound investment.

The Securities Industry and Financial Markets Association's (SIFMA) credit rating agency task force expressed concern regarding the implications of a proposal presented by the Securities and Exchange Commission (SEC) last week at an open meeting hosted by the commission.

Babson Capital Europe appointed Andrew Godson as head of distribution.

At a time when most large investment banks are slashing their fixed-income teams, Cantor Fitzgerald is making a hiring push in its debt capital markets group. Shawn Matthews, who heads the group and is based in New York, runs a sales and trading desk that already boasts more than 200 salesmen and traders. Bank Loan Report sat down with Matthews recently to discuss the group's expansion.

The impending summer slowdown is nothing new for the CDO market, which has already seen a slow pace of issuance for almost a year now.

Activity may be down sharply in CDOs, but there could be early signs of life returning to the CLO market, which in turn may signal a pickup in demand for leveraged loans in coming months, according to a market participant who is involved with trust services for the securitization market.

The exit of CDO chiefs from the major investment banks continue. ASR confirmed that Sebastiano Riva, the co-head of Lehman Brother's CLO group, has left the firm.

Credit Suisse recently reorganized its structured products group and CDO group. These changes come after the firm shut down origination activity, cut positions and reduced its risk exposure over the past year, according to an internal memo at the bank.

Lloyds TSB Corporate Markets launched its latest SME CLO. This is the bank's fourth balance sheet securitization from its commercial loan book.

Credit Suisse recently reorganized its structured products group. These changes come after the firm shut down origination activity, cut positions and reduced its risk exposure over the past year, according to an internal memo at the bank.

Merrill Lynch has tapped Doug Mallach as head of U.S. fixed income, currencies and commodities asset management.

Trouble at Calyon's structured finance subsidiary Omicron Investment Management could serve as a harbinger for the further woes awaiting CDO managers.