CDOs

London-based credit asset manager Cairn Financial Products is now the successor collateral manager for White Marlin CDO 2007-1, a $1.2 billion investment grade corporate CDO.

Alistair Darling, the U.K. chancellor of the exchequer, said that the G7 leading economies need to take action to ease the ongoing strains on the global financial markets and to strengthen the financial system's resilience.

Moody's Investors Service downgraded Sigma Finance's Gordian Knot-managed SIV senior ratings to A2'/P2' from Aaa'/'P1' following a review of credit enhancement and impending liquidity problems.

With the current volatile environment, surveillance has become a key feature in the work of collateral managers and investors alike. In this vein, Deloitte & Touche - which has previously come out with the ABCP, ABS and CDO Suite products as part of its Securitization Office family of solutions - has released Surveillance Suite, which is a customized tool to help users track their portfolios.

As things fall apart at MBS and CDO operations throughout the securitization industry - creating a void in financial services - small teams of executives have begun to regroup as hedge and distressed-asset funds to start picking up the pieces.

For more than nine months, the market has been attempting to sort through the tangled web of counterparty risk that has entrapped Wall Street.

When the subprime RMBS and HEL markets began to fall apart, the market watched as billions in mezzanine CDO liquidations routed spreads, undermined investor confidence and siphoned liquidity from the securitization markets.

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.

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.

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.

The season might be changing, but it won't be enough to lighten the heavy mood that has held the European primary market deal flow at a standstill for much of the year.

The tenth series of the North American Investment Grade CDX index (CDX.NA.IG.10) launched into a slightly rosier-than-expected market last week.

The registration for American Securitization Forum's ASF 2009 opens tomorrow, March 28. The conference will be held Feb.8-11, 2009 at The Venetian in Las Vegas. Online registration can be done through the ASF Web site at http://www.americansecuritization.com/story.aspx?id=2282

With JPMorgan scooping up 85-year-old Bear Stearns last week for $2 per share, it is safe to say that deteriorating credit conditions and market jitters continue to hack away at the U.S. economy.

Banks and insurance companies that issue trust preferred securities are now highly sensitive to financial institution risk and have acquired a distaste for the CDO structure, which has pooled these securities.

XL Capital Assurance's (XLCA) parent company Security Capital Assurance (SCA) responded to a lawsuit filed yesterday in New York by Merrill Lynch, accusing XLCA of refusing to cover losses on $3.1 billion in seven CDOs that the company had written swaps on. SCA said that it had terminated XLCA's contracts with Merrill Lynch due to a breach of contract in the obligations by promising control rights in the investment to various parties. "Merrill had repudiated its contractual obligations to XLCA by committing to provide one or more third parties with the same CDO control rights that it had previously promised to XLCA." As a result, SCA said that is in not obligated to make these payments. Quinn Emanuel Urquhart Oliver & Hedges will represent SCA in court.

Ambac announced that it has completed its $1.5 billion equity offering and is working to restore market confidence, said John Uhlein, executive vice president at Ambac Financial Group.

UBS urged financial market regulators to "take an active role," in rating agency selection as part of an effort to save these firms, in a research report last Tuesday.

The Information Management Network's 12th annual U.S. CDOs, Credit Derivatives and Structured Credit Products conference in New York opened last Tuesday with panelists speaking bluntly about current CDO market conditions. They also made forecasts about future deal structures.

The role of the CDO manager has been called into question lately as market participants have suggested that investors are bound to favor static deals.