CDOs

Europe might be feeling great uncertainty over how to resolve its sovereign debt crisis, but its securitization market has still managed to restart.

Because of still challenging market-making conditions, Credit Suisse Group is set to either downsize or cut altogether some securitization businesses and fixed-income units.

Citigroup has completed pricing on the latest CLO to hit the market, raising a $408.7 million fund to be managed by WCAS Fraser Sullivan Investment Management, according to a source familiar with the transaction.

Securitization pros have had to constantly come up with new deal structures to respond to challenges posed by the ongoing financial crisis.

With so much CLO investment capacity going offline over the next few years, the loan market is getting creative in structuring deals to accommodate this waning investor class.

Many investors in CDOs and similar products were taken by surprise when a U.S. bankruptcy court declined to dismiss an involuntary chapter 11 case filed against CDO-squared issuer Zais Investment Grade Ltd. VII (a.k.a. ZING VII). A test of the so-called bankruptcy-remoteness of offshore issuers was perhaps inevitable given the volume of distressed CDO securities in the market today. From a pure bankruptcy law perspective, the court's decision is not revolutionary; it simply confirms the reality that entities can still wind up in bankruptcy even if they were structured to avoid it. But for investors in the lower tranches of distressed CDOs hoping to see values rebound over time, the ZING VII bankruptcy makes the prospect of future "tranche warfare" in chapter 11 seem inevitable. It remains to be seen whether the dismissal will be affirmed on appeal, whether ZING VII's senior noteholders will succeed in confirming their chapter 11 plan, and most importantly, whether ZING VII is merely the first of many CDO bankruptcy cases to come. Regardless of ZING VII's ultimate outcome, the bankruptcy court's analysis in denying the motion to dismiss should be considered carefully as market participants structure, sell or buy into future CDOs.

MF Global filed for Chapter 11 protection today, less than a week after being downgraded to junk status.

FBR Capital Markets has made large cuts to its leveraged finance group, including high yield trading staff.

Buckley T. Ratchford, head of global bank loan trading and distressed investing at Goldman Sachs, will leave the firm at year’s end, according to an internal memo obtained by ASR sister publication Leveraged Finance News.

Babson Capital Management and its European arm Babson Capital Europe have postponed an IPO for a loan fund set to launch on the London Stock Exchange, according to a regulatory filing.

Quantifi has launched a free online information source for professionals involved in counterparty risk management and credit valuation adjustment (CVA).

After a significant slow down following the economic turmoil in August, CLO issuance is poised to pick up again as the loan market stabilizes, sources said. Indeed, the pipeline has even continued to grow despite the fact that a number of deals stalled over the summer.

Citigroup’s tender for the equity income notes issued by Skytop CLO resulted in it acquiring 46.77% of the $31 million of this class of securities outstanding.

Reinstating trust in the ratings process is key to growing investor interest, according to buyside participants in a Tuesday panel at the ABS East conference hosted by Information Management Network.

At the ABS East conference, organized by the Information Management Network, the message of ending the market’s over-reliance on ratings rang loud and clear.

There is a scarcity of investors at this year’s ABS East conference hosted by Information Management Network.

Money managers are hoping pension funds and insurance companies will become big buyers of leveraged loans, picking up the slack from CLOs.

Markit has launched an index that tracks the aggregate return of roughly 100 of the most liquid dollar-denominated leveraged loans, the financial information services company announced today.

When it comes to bond pricing, one message that rang out clear at Information Management Network’s ABS East Conference on Sunday: investors need to do their own homework and make sure they know what’s behind the valuation tools they employ.