CDOs

The current buoyancy underlying the U.S. CLO market can be attributed to a number of issuance friendly factors, not the least of which is significant interest from new buyers, market participants say.

In competitive sports, being first is always the goal. But the distance between the U.S. — at the head of the pack — and the rest of the world in crafting financial reforms is becoming a major hurdle for implementing the Dodd-Frank Act.

A federal judge declined yesterday to dismiss charges that Barclays Capital packed a CDO it sold to Eastern Financial Florida Credit Union with junk, hastening the demise of the one-time $2.4 billion credit union, the biggest natural person credit union failure ever.

Citigroup has sold a $360.8 million CLO for Babson Capital Management, according to people with knowledge of the deal.

According to Leveraged Commentary & Data (LCD), a unit of Standard & Poor's, leveraged loan issuance is down by half versus last year, which S&P analysts said is potential constraint for CLO issuance.

In one of the most ambitious suits of its kind so far, Space Coast Credit Union has filed suit against several investment banks and rating agencies for the sale of $150 million of CDOs to Eastern Financial Florida Credit Union, the huge Florida credit union that failed in 2009 then was acquired by Space Coast.

Ongoing pressure on the credit ratings of some of the largest financial institutions could result in a minor shakeup in the ranks of CLO trustees.

The Carlyle Group is planning a $494.2 million CLO. The deal, dubbed Carlyle Global Market Strategies CLO 2012-1, would be the private equity firm’s thirty-third, and its first new issue for 2012. It is an arbitrage cash flow CLO with a four-year reinvestment period, scheduled to end in April 2016, according to a presale report by Fitch Ratings.

More details are highlighted on bond insurer MBIA's reported losses in the fourth quarter of 2011 from yesterday's article from ASR sister publication The Bond Buyer.

There's more than one kind of CLO revival underway. Issuance of CLOs in the quasi-public 144A market has picked up dramatically since the financial crisis, thanks to the strong performance of existing vehicles. But, market observers say there has also been a pick-up in issuance of CLOs that are truly private, which have proprietary structures and only a handful of participants.

Banks are applying a well-honed strategy to mitigate regulators' recent proposal to determine capital requirements for assets that include securitizations.

Bond insurer MBIA reported experiencing losses in the fourth quarter of 2011.

Bond insurer Assured Guaranty reported a net loss per share despite mostly positive results for the fourth quarter of 2011.

The Secretary of the Commonwealth of Massachusetts has fined State Street Corp. $5 million over its role as investment manager in the Carina CDO.

The Carlyle Group said today it completed the acquisition of the management contracts of four European CLOs with total assets of €2.1 billion in from Highland Capital Management, an alternative asset management firm based in Dallas.

Bond insurer Ambac Financial Group is offering the Internal Revenue Service (IRS) $102 million to settle the agency’s $800 million claim against it.

The Financial Industry Regulatory Authority (FINRA) has recommended disciplinary action be taken against two CLO professionals affiliated with Guggenheim Capital Markets.

The leveraged loan market is hoping to dodge yet another bullet from the Dodd-Frank Act.