CDOs

Calyon last week announced plans to grow its global CDO staff by one-third. The news came amid a shake-up that left the investment bank without several key members of its U.S. CDO team, including cash CDO head Alexander Rekeda.

Back in January, CapitalSource made its REIT status official, and thus made a lot of progress toward lowering its cost of funds and separating its real estate securitization activities from the rest of its securitization program. After pricing the CapitalSource Real Estate Loan Trust 2006-A just over a week ago, the separation is complete.

Tis the season to be ... shopping,' and not to be outdone by mere retailers this time of year, credit card ABS issuers rolled out the merchandise for their customers.

Life settlement ABS deals have been gaining traction in the securitization market in recent years, but some experts worry that recent proposals by the National Association of Insurance Commissioners (NAIC) will restrict the flow of underlying assets for premium financings, which fall under the same category, and cause that market to slip.

Mizuho Securities USA is positioning itself to become a familiar name in U.S. CDO-ville, with former Calyon cash CDO head Alexander Rekeda leading the Japanese bank's foray into CDO issuance out of New York. Rekeda was a driving force behind Calyon's growth as a U.S. CDO underwriter, according to Mizuho. Now as Mizuho's head of U.S. structured credit, Americas, Rekeda said the company's sizable balance sheet, its flexibility and its presence as a global distributor position the bank for growth within the sector.

The subprime RMBS market in 2006 arguably boiled down to a game of tug-of-war. On one side, hedge funds were eager to capitalize on a perceived gloom-and-doom scenario fraught with a busted housing bubble and empty-pocketed subprime borrowers. CDO managers, ever the real estate bulls, were on the other. And while these two sides are expected to continue their dance of supply and demand through yearend, a crop of subprime lenders - no longer able to carry the weight of investor buy-back requests - appeared to become the losers, at least for now.

Tom Finke is used to juggling multiple responsibilities. Not only at the office, with eight CLOs currently under management, but also at home keeping track of five kids. Though he is highly organized during the week, come Friday afternoon, Finke turns the reigns over to his wife, Heather, who arranges his soccer, basketball, baseball, birthday party and play date carpool agenda. And don't worry about his personal health. "With five kids there is no lack of physical activity," he said.

Pending implementation of Basel II in Europe and an unwavering confidence in the mortgage market marked substantial changes to two ABCP conduits in recent weeks.

Ownit Mortgage Corp. suddenly shut its doors last week, surprising both the industry and its own employees - who apparently were told only the night before. The self- proclaimed top-15 subprime mortgage lender was overwhelmed with delinquencies and buyback requests, sources said, even though the company's founder and chief executive Bill Dallas less than a year ago predicted the same fate for other subprime mortgage lenders.

Factory orders for durable goods might have dropped significantly, according to the U.S. Commerce Department figures released last week. However, the dip is apparently not enough to undermine performance on leases for transportation and equipment, which secure GE Capital's latest midticket equipment term ABS deal. Indeed, performance on the issuer's underlying collateral have been so strong that the reduced initial credit enhancement levels and incorporated a smaller reserve account and a step-down mechanism in its latest deal structure.

Last week looked in danger of being an all-HEL, all the time sort of issuance period, but a mid-ticket equipment lease, a shipping container deal and a stubbornly inverted swaps spread curve intervened to break up the monotony.

LAGUNA NIGUEL, Calif. - Amid a rash of CDO structural innovations designed to lure equity investors, a familiar debate is again rearing its head - whether CDO managers should invest in the equity of the deals they manage. While some investors say a manager that puts its "own skin in the game," demonstrates confidence and commitment toward its product, others say a manager's equity investment could present a conflict of interest.

LAGUNA NIGUEL, Calif. - While production companies are increasingly tapping Wall Street for funds to help counter the cost of making movies, one consultancy is looking to extend commercial paper and term financing for the first time to independent films. Sylvain Raynes, a founding partner of R&R Consulting, said he's been working for several years on a way to extend financing to the less institutional side of movie production.

LAGUNA NIGUEL, Calif. - New CLO managers continue to be a thorn in the side of more seasoned players, who equate managing a deal in the currently benign credit environment to riding a bike with training wheels that investors can't see.

US Express Leasing, an independent equipment leasing company, recently priced its first term securitization, a $325 million deal. Market watchers say it is another sign of resurgence from a market that experienced a slowdown just five years ago.

The recently formed Securities Industry and Financial Markets Association (SIFMA) announced that its first management team has taken root. The industry organization stems from the merger between the Bond Market Association and the Securities Industry Association executed earlier this year.

The merger of The Bank of New York and Mellon Bank that was announced last week is expected to create the world's largest asset custodian and corporate trustee.

Countrywide Securities analysts have highlighted their recent production activity and applications trends in light of the decline in interest rates and shifts in the yield curve.

Full Credit to Book (Equal if Joint) U.S. Public ABS Market/144A Market Managers Proceeds (mils) Rank Mkt. Share # of Issues Citigroup 10,940.0 1 14.4 18 JP Morgan 10,765.7 2 14.2 22 Wachovia Corp 10,448.2 3 13.7 18 Barclays Capital 8,026.2 4 10.6 13 Deutsche Bank AG 6,768.3 5 8.9 15 Banc of America Securities LLC 5,021.6 6 6.6 9 Credit Suisse 4,066.8 7 5.3 8 Royal Bank of Scotland Group 3,644.0 8 4.8 8 Merrill Lynch & Co Inc 3,290.4 9 4.3 6 HSBC Holdings PLC 3,227.9 10 4.2 4 Industry Total 76,024.1 - 100.0 81 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 41,073.0 1 14.4 58 Citigroup 32,460.9 2 11.4 57 Deutsche Bank AG 26,581.0 3 9.3 54 UBS 20,852.1 4 7.3 58 Credit Suisse 20,453.3 5 7.2 30 Bear Stearns & Co Inc 17,688.6 6 6.2 36 Wachovia Corp 17,345.4 7 6.1 42 Banc of America Securities LLC 16,965.1 8 6.0 36 Morgan Stanley 16,376.1 9 5.7 63 JP Morgan 14,909.1 10 5.2 36 Industry Total 285,045.3 - 100.0 566 Source: Thomson Financial