Securitization

There continued to be some mixed signals in CMBS and RMBS markets last week but these still netted out to cautiously optimistic views of the sectors in some respects.

Several auto deals are marketing, boosting the sector's volume once again. Honda Motor Co. is in the market with its $1.025 billion auto ABS offering.

As Spanish savings banks known as cajas merge and create new private banks, covered bonds that pooled together the assets of several cajas will disappear, according to a recent report by Moody’s Investors Service.

European structured finance products continue to absorb elevated credit risks very well from a performance standpoint, according to Unicredit analysts.

The Federal Housing Administration (FHA) increased the annual mortgage insurance by 25 basis points for new mortgage loans starting April 18.

Macquarie Equipment Finance (MEF) is in the market with its first equipment lease securitization deal. MEF is the mid-ticket equipment leasing subsidiary of Macquarie Bank Ltd. (MBL).

Fitch Ratings said that, based on the Obama’s administration confirmation of ongoing support for the GSEs, the rating agency will likely maintain its long- and short-term issuer default ratings at ‘AAA'/'F1+’ and the long-term senior debt ratings at ‘AAA’ for both Fannie Mae and Freddie Mac.

Freddie Mac announced its first offering of structured passthrough certificates or K certificates backed only by multifamily mortgages with a seven-year term.

Kondaur Capital Corp., an active player in the nonperforming loan market, Monday slashed its staff by 39%, saying it is having a hard time finding enough available product to purchase.

After a strong 2010 in Colombian structured finance — issuance grew more than 50% from 2009 — Fitch Ratings sees reasons for a repeat performance in 2011. Placements hit $7.8 billion last year, from a variety of companies in the corporate and financial sectors. The country’s Fannie Mae-esque Titularizadora Colombiana accounted for 28% of all issuance in 2010, turning out three peso-denominated RMBS and three inflation-indexed RMBS. The withdrawal of a tax credit for RMBS buyers should cut into volumes this year, but other asset classes are primed to pick up the slack, the agency said. Titularizadora itself may be involved in some of these as the agency has set up an offshoot to securitize non-housing ABS, such as auto loans, and expects to start issuing this year. Government-backed deals to fund infrastructure are also on the horizon, Fitch said.

In Brazil, talk of a more substantial RMBS market might be a step closer to reality, as banks will be able to use a portion of their securitized portfolios to meet a regulatory requirement that has been an impediment to RMBS issuance in the country, said Fitch Ratings in a report today. Under the rule, banks must keep 65% of savings deposits in real estate-related financings. With the change, “Fitch expects some large retail banks to debut new RMBS securitization platforms in 2011.”

The Securities and Exchange Commission (SEC) late Friday charged three former senior executives of IndyMac Bancorp with securities fraud for misleading investors about the Alt-A giant's deteriorating financial condition.

Bad: When a newspaper ridicules your CEO for wrongful foreclosures.

Information provider CoreLogic said that Anthony "Buddy" Piszel has resigned as the firm's CFO effective immediately.

In several different venues Friday morning, Treasury Secretary Tim Geithner defended the administration's decision not to offer a full-fledged plan for the future of the housing market, insisting that Congress had only asked for an array of options.Within minutes of the administration's release of a 31-page white paper on reform options, which did not endorse a single approach and left vague some key details on how to proceed, critics accused President Obama of shirking his responsibility on the issue. But Geithner said that the administration wants more Congressional input before it proceeds.

North Texas Higher Education Authority is in the market with its Series 2011-1 FFELP-backed, 144A offering.

A pickup in CMBS issuance is giving the market a much-needed liquidity boost, but underwriting standards are slipping as sponsors scramble to find enough collateral for deals, which are drawing investors looking for extra yields.

The loan modification offer was hard to turn down, in more ways than one. It was July 2008. IndyMac Bank was failing and Fannie Mae and Freddie Mac were in a death spiral.

HSBC Holdings is currently reviewing a first round of bids taken on its $60 billion residential servicing portfolio, but has yet to make a decision on the sale, according to industry advisors familiar with the matter.

The Obama administration proposal on GSE reform reiterated the importance of the securitization market in the future of housing finance.