Securitization

Finacity Corp. has extended a MXN 550 million ($44.8 million) variable rate investment grade bond for one of its clients, Vitro Envases Norteamerica (VENA), a 100% owned subsidiary of Vitro.

Fannie Mae has adapted new standards for buying and securitizing ARMs. The mortgage firm is changing eligibility criteria to protect consumers from potential dramatic payment increases, according to a press release from Fannie Mae.

On the heels of the first Jumbo mortgage securitization since the crisis, Citigroup is cranking up originations of such loans to meet resurgent demand from borrowers and investors.

CMBS pricing saw some unprecedented trading margins over the last several weeks, but market players said that the sentiment does not carry through to fundamentals.

The private-label Jumbo securitization from Redwood Trust called Sequoia Mortgage Trust 2010-H1 came to market last month, and that in itself is an accomplishment for a troubled mortgage securitization market.

April was not our market's finest moment. It may have been Goldman executives who were in the hot seat, but at times it was as if, yet again, securitization were on trial.

Founded in 1966, the Asian Development Bank has a mandate to reduce the poverty of its developing member countries (DMCs) and improve the quality of life of their people. It currently has 67 members. Those eligible for assistance must be DMCs and be located in the region under ADB's purview, which includes areas of the Pacific as well as Asia. In 2009, the bank disbursed $13.2 billion in loans, $1.1 billion in grants and $267.2 million in technical assistance.

The new-issue European market has remained active. In fact, according to Henderson Global Investors research, March was the first month since August 2007 that issuance in the European ABS primary market exceeded retained issuance, which comprises securitization issues retained by the originating bank for balance sheet liquidity or central bank repo purposes.

Emerging market players in the structured finance world might soon have a new platform to develop mortgage covered bonds: Peru. Legislation on this product is currently before the Peruvian congress and is piquing the interest of foreign and domestic ABS devotees alike.

ABCP outstandings throughout North America continue to decline as both the supply of and demand for paper has weakened. While conduits with non-traditional structures or those financing out-of-favor asset portfolios have exited the space, the remaining market players continue to cleanse unfavorable asset types from their portfolios and terminated non-core banking relationships.

A number of recent studies have documented the correlation between negative home equity and the incidence of defaults. A report by CoreLogic released in February stated that when negative equity exceeds either 25% of a loan's balance or $70,000, "homeowners begin to default with the same propensity as investors."

Now more than ever the case for developing a U.S. covered bond sector has become easier to make as investors want the security of a high-quality product.

Providing public deal-like disclosures on private placements? Issuers retaining a 5% stake in offerings issued from securities shelves? Requiring issuers to provide loan-level data regularly, even in the private market, and for asset classes where such detailed data has never been available?

At the start of the year, supply/demand technicals were deemed generally supportive to the market, despite the Federal Reserve's impending exit. Net issuance was estimated at around $320 billion for the year with the Fed's final-quarter purchases totaling $139 billion.

New Mexico District Judge Stephen Pfeffer has dismissed a pay-to-play suit filed by former Educational Retirement Board (ERB) Investment Officer Frank Foy and the state watchdog on grounds that the claims and alleged wrong doing pre-date the pertinent state law.

The 12 Federal Home Loan Banks reported combined earnings of $345 million in the first quarter, a 6% decline from the same period last year.

Capstead Mortgage Corp., a REIT that invests in GSE-backed MBS, is warning that higher prepayments will hit the market in the second and third quarters because of efforts by Fannie Mae to "buy out" delinquent loans from MBS pools.

The Carlyle Group has acquired $4.2 billion worth of CLOs and $950 million worth of managed accounts from Stanfield Capital Partners, increasing the size of its credit assets under management to $18.1 billion from $13 billion.

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

Wells Fargo Securities has expanded its RMBS platform. The RMBS group now offers a full suite of advisory, structuring, research, distribution and trading services to the firm's residential origination and investing clients and to Wells Fargo Home Mortgage (WFHM).