Securitization

After the near collapse of the Canadian securitization market in August 2007, 2010 saw a strong resurgence in term ABS issuance in Canada. Among other things, there were 16 public deals with combined total issuance of more than CAD$11 billion. There were also signs of renewed activity in the ABCP market with conduits taking on new deals with originators who had been largely frozen out of this market over the last few years. Overall, there is a general sense of optimism about the market and, as a result of both market forces and government action, it's fair to say that the Canadian securitization market is, if not perfectly well, at least comfortably on the road to recovery.

U.S. auto loan ABS collateral performance has turned the corner over the past two years, despite ongoing economic stress and persistent pressure on U.S. consumers overall. Losses among 2009 deals have reverted to pre-recession levels, with losses in the 2010 vintage likely to follow suit.

The percentage of outstanding balances that credit cardholders pay off each month surged last year - a favorable sign for loan performance that mirrored plummeting chargeoffs but that now stands as an obstacle to portfolio growth.

Kroll Bond Ratings is set to publish its initial rating criteria and research for structured finance at the end of February, according to James Nadler, president and chief operating officer at the company.

In the aftermath of wholesale downgrades of RMBS by the ratings agencies, following the housing market downturn, the National Association of Insurance Commissioners (NAIC) decided to try a different approach.

In late December, the European Bank of Reconstruction and Development (EBRD) launched the Mid-size Sustainable Energy Financing Facility (MidSEFF), designed to support renewable energy and industrial energy efficiency investments.

Sallie Mae appointed Paul Thome as president of the Sallie Mae Bank. He has 37 years experience in banking and financial services leadership. He was most recently Sallie Mae’s senior vice president of business finance and procurement.

Fannie Mae purchased $87.6 billion of mortgages from its seller/servicers in December, its best purchase month of the year and yet another sign that loan production remained strong in the fourth quarter.

The 'Great Recession' and housing bubble have taken their toll on U.S. home owners. According to government figures released Monday morning, the nation's overall home ownership rate fell to 66.5% in the fourth quarter, the lowest reading since 1998.

The Treasury Department has revamped its short sale program by easing income restrictions and documentation requirements for homeowners facing foreclosure. The changes are effective Tuesday, Feb. 1.

Michael Callen, executive chairman of bankrupt bond insurance holding company Ambac Financial Group, announced his resignation Friday afternoon.

BNP Paribas said on Monday its corporate and investment banking group unveiled an official institutions coverage team for the Americas that will be headed by Timothy Bitsberger, a former U.S. Treasury Department official and treasurer of housing giant Freddie Mac.

The White House's removal of Joseph Smith as a nominee to be the director of the Federal Housing Finance Agency (FHFA) does not bode well for an administration facing so many regulatory jobs to fill, observers said Friday.

Granite paper continues to climb higher as pricing last week reached its post-crisis high, above 94 for the first time since the non-asset trigger event in November 2008, according Royal Bank of Scotland (RBS) analysts.

Ford Motor Credit Co. filed a form S-3 with the Securities and Exchange Commission to issue under its Ford Credit Floorplan Master Owner Trust A.

The concept of a “fee for services” model, including a flat cash payment, has been kicked around for the past 10 years, but is finally gaining traction as the mortgage industry and regulators look for a better way to compensate residential servicers.

Moody’s Investors Service does not see a precedent being set by a provincial court in Spain that ruled that a bank’s repossession of a property effectively wiped out the borrower’s debt. The decision, handing down by a court of appeal in the northern Spanish region of Navarre, has ignited fears among RMBS players that loan defaults will jump and recovery rates drop as borrowers would have more incentive to default if their property prices are in the tank. In a report on the matter, Moody’s dismissed its potential to set precedent for other cases in the country, pointing out that “under article 105 of the Spanish Mortgage Act, a borrower is personally liable for all outstanding debt to the bank.” The full report is linked. For an article (in Spanish) on the court decision published in the daily El Pais on Jan. 26, click here.

Manager Activity: Autos Book Runner Amount (US$ Mil) Rank Mkt.

Economists at Moody's Analytics expect a pickup in home sales and construction in 2011, but admit they are "nervous" about their price forecast because of the high level of seriously delinquent loans, distressed sales, and strategic defaults.

Now that the President's first pick to be the new GSE regulator has bowed out due to Republican opposition, the White House will likely appoint an administration official who has already been confirmed by the Senate to run the agency.