Securitization

The summer months have brought a more positive sentiment to the European securitization market. However, market sources believe that the winter could bring some discontent, adding that Europe has yet to make some lasting moves that would indicate the market's true revival.

The ABS market has seen a flurry of transactions over the summer - a departure from the season's historical doldrums.

The recent contraction in the spread between Jumbo- and conforming-balance mortgage loans has obscured continued problems in the market for non-agency loans. The lack of a securities market outlet for loan production means that virtually all loans ineligible for agency execution must be held in portfolio by the lender. In addition to requiring LTVs of 75% or lower, the pricing of non-agency loans is dependent on each lender's balance sheet and capital position, along with their appetite for credit and interest rate risk. Ultimately, the banking system's collective balance sheet is not large or strong enough to indefinitely support the upper tier of the housing market on its own.

While some days in August lived up to its "dog days of summer" moniker, the stats suggested anything but. The month reported several stronger-than-expected key economic releases beginning with the July employment report that showed a loss of just 247,000 jobs compared with a projected loss of 320,000, with the unemployment rate slipping to 9.4% from 9.5%, and concluding with a better-than-expected Chicago PMI for August at 50 versus a consensus call of 48, and up from 43.4 in July.

Lending through the Federal Reserve Board's discount window grew 2.6% during the past week, to $108.6 billion on Wednesday.

Treasury Department Secretary Tim Geithner called Thursday for an agreement on comprehensive new international capital standards for banks by the end of 2010, with implementation by the end of 2012.

Nearly a year after Fannie Mae and Freddie Mac were seized by the federal government, the fate of the government-sponsored enterprises seems less certain than ever.

Standard & Poor's took credit rating actions on 453 European synthetic CDO tranches.

BlueMountain Capital Management added to its fundamental credit research team by hiring four credit research analysts.

The International Organization of Securities Commissions' (IOSCO) technical committee published its final report on the unregulated financial markets and products.

Imperial Capital has hired Anthony Guido as a managing director and senior trader.

Expectation of only sporadic EMEA CMBS issuance confirmed for H2

Cozen O`Connor announced that Marianne Rosenberg and Jill Davidson have joined the corporate law department and will practice out of the firm`s midtown New York office.

The addition of 432 commercial real estate loans roughly $5.2 billion resulted in a 7%

Many deals priced ahead of today’s deadline for investors to request loans from the Federal Reserve to purchase debt backed by consumer and small-business loans through its Term ABS Loan Facility (TALF).

U.K. prepayment speeds among U.K. RMBS transactions have fallen dramatically since the onset of the crisis, as lenders tighten underwriting criteria, rate cuts take hold and the impact of lower house values are felt.

Wells Fargo & Co. is said to be auctioning off a $65 million portfolio of sub- and nonperforming residential loans and is set to take final bids next week.

Deutsche Bank purchased of $67 million of student loans from Northwestern University via its Affiliated Loan Program for Students (“ALPS”).

The latest 2.7% quarterly gain in Freddie Mac's Conventional Home Price Index's (CMHPI) Purchase-Only Series suggests a more broad-based recovery in housing values is starting to emerge. "For the first time in two years average home sales values rose at least a little bit in every region," Freddie Mac vice president and chief economist Frank Nothaft said.

The minutes of the Federal Reserve's Aug. 11 to 12 policy meeting showed that members believe that gradually removing the central bank's purchases of MBS will make the transition easier for financial markets.