CDOs

Rev Cred/Home Eq $55,994 Credit Card Rec $26,586 Non-Jumbo Mtg Ln $20,601 Auto Loans/Recs $18,877 Student Loans $11,130 Other $27,419

A story last week incorrectly stated that ZCM Matched Funding Corp. had been downgraded. Fenway Funding was put on review for downgrade, following the placement of ZCMMF on review for downgrade. ZCMMF is a total return swap counterparty to Fenway. ZCMMF's rating is based on a surety bond from Zurich Insurance Company which Moody's placed on review for downgrade in late February.

NEW YORK - Conduit restructuring was hands-down the hottest topic of last week's ABCP conference, though some market players are concerned that the "secretive" and proprietary nature of the ABCP market could present challenges to an industry that, as a whole, is battling a common issue to all, more so given the rapidly approaching June 30 deadline.

State legislators beware! That was the theme of last week's panel discussion hosted by the American Securitization Forum on predatory lending legislation. With both New York and New Jersey set to implement laws similar to the recently amended Georgia Fair Lending Act, panelists warned that political one-upmanship and catering to consumer advocacy groups will ultimately increase the cost of borrowing for consumers.

Mexican state housing agency Sociedad Hipotecaria Federal (SHF) is shooing its overgrown children into the arms of private bankers and bond investors. Dropping a chili pepper into the already hot sector of housing securitizations, the SHF is phasing out monies for construction bridge loans extended to housing finance companies. The result: Sofols - as the companies are known - will turn aggressively to the market. "They will have to diversify their funding sources," said Luis de la Pena, an analyst at Fitch Ratings. Sofol heavyweights Metrofinanciera and Su Casita have already started securitizing their bridge-loan portfolio (for interview with Su Casita Vice President Manuel Campos, see p. 21) and others are sure to follow suit, sources said.

It's taken over three months to perform, but Fitch Ratings has managed to place a harness on the 10-ton elephant that is the credit derivatives market.

In the secondary market, Banc One Capital Markets sees value in equipment ABS, which is trading relatively wide to prime auto, and could tighten up when new issue equipment begins to hit market. According to Banc One, the months of March through May are typically the heavier months for equipment ABS.

As it had anticipated in January, The Spiegel Group's First Consumers National Bank credit-card trusts moved into early amortization last week, following three consecutive months of negative excess spread.

Last week Standard and Poor's Corp. released its second Structured Finance Market Observation survey, gauging the market sentiment on the latest hot topic on the consolidation front - Financial Interpretation No. 46, released in mid-January by the Financial Accounting Standards Board. This survey is a followup to last year's inaugural questionnaire, which determined that while structured-finance market participants were in favor of FASB's goals, consolidation was not the way to go about accomplishing them.