Securitization

U.S. student loan issuance is expected to remain around the same levels observed in both 2009 and 2010 according to report by Henderson Global Investors.

Argentina’s provinces are re-enacting the past. In the last year, three have publicly issued deals backed in part by revenue from a federal government institution, recalling a time when securitizing co-participation revenue from the central government was all the rage. That was before the crisis of 2001-2002.

New issuance for collateralized loan obligations (CLOs) continues to play a meaningful role in reducing the debt wall of existing CLOs nearing the end of their reinvestment periods, according to a Moody's Investors Report.

Figures released yesterday by the U.S. Treasury show that taxpayers collected a total of $12.9 billion in May from the investment and sales of the agency’s mortgage-backed securities (MBS) portfolio.

The largest U.S. banks are quietly preparing to push back against proposed Basel III liquidity requirements that they argue could wreak havoc in the market by artificially deflating the value of certain assets.

After a strong recent performance, the CLO new issuance market now faces potential challenges posed by risk retention rules under the Dodd-Frank Act.

The U.S. delinquency rate for commercial real estate loans in CMBS experienced its biggest decrease in two years, falling by 5 basis points to 9.60% in May, according to figures reported by Trepp LLC.

The Basel Committee on Banking Supervision finalized its review of the Basel III standard for capital treatment for counterparty credit risk in bilateral trades and plans to modify the risk weighting of credit valuation adjustment (CVA), which is the risk of loss caused by changes in the credit spread of a counterparty due to changes in its credit quality.

Paragon published its half-year results for the year ended March 31 and said it plans to return the securitization market again.

Nearly 40 senators have now signed onto a measure urging federal regulators to modify a risk retention proposal and adopt changes that would pave the way for a broad exemption for securitized mortgages that have a low risk of default.

Lloyds TSB and Bank of Scotland are marketing a GBP615 Million ($1bn) credit card securitization deal dubbed Penarth Master Issuer Plc (2011-1 A1 and A2).

Despite lower mortgage rates in the week ending May 27, mortgage application activity slipped 4% with both refinancing and purchase activity lower.

Morgan Stanley and Bank of America have begun marketing a $1.2 billion CMBS deal.

Commercial real estate mortgage banking firm CW Financial Services (CW), has enhanced its commercial real estate (CRE) debt platform.

Figures released by Lender Processing Services (LPS) in its April Mortgage Monitor reported the largest monthly increase in delinquencies in recent years at 2.4%. This rise is considerable even though April usually has the biggest rise in new delinquencies.

The Canadian mortgage originator First National Financial Corp. (FNFC) released financial results for 1Q11 and said it increased its mortgage originations by 26% to $2.4 billion from 2010 first quarter results.

The government is a month into selling its AIG holdings. Despite the bids for the auctions being pre-announced, the sales are causing a commotion in the RMBS secondary market, and the reaction from securitization players is not entirely positive.

The latest impediment to non-agency securitization stemming from the Dodd-Frank Act (DFA) is the proposal to create "premium capture cash reserve accounts" (PCCRAs). This provision, contained in the recent interagency document that proposed how the "risk retention" provisions of the DFA would be defined and implemented, would require the creation of a cash account to prevent structurers from attempting to monetize what they define as "excess spread." In my view, this proposal could be highly damaging to consumer mortgage lending and is premised on a flawed understanding of securitization practices. It also represents another in a series of impediments to the revival of the market for non-agency securitizations.

It has been a month since the Federal Reserve Bank of New York began selling off its Maiden Lane II (ML II) BWIC list.

Fitch Ratings is finalizing its new model framework for determining loan losses on pools of U.S. prime residential mortgage loans, which includes several important updates. Chief among them is the application of a proprietary sustainable home price model (SHP Model) that measures a property's current price against its sustainable value. The SHP model allows Fitch to take a forward looking, countercyclical view on the potential for negative equity, which has shown to strongly influence borrower default behavior.