Securitization

With some industry participants getting ready for the holiday vacation, and others packing up their desks, the ABS market remained quiet last week. New issuance trickled in and trading was relatively limited in the secondary market, all symptoms of a typical yearend slowdown, but also signs of further weakening to come.

With performance in the auto ABS market suffering from lack of available credit to consumers, decreasing used vehicle values, and the rising unemployment rate, it seems only natural that new deal flow would be sidelined.

Manager Activity: AutosFull Credit to Book (Equal if Joint) U.S. Public ABS Market/144A Market

Following Tribune’s Chapter 11 filing, Markit has began corralling the loan-only credit default swap market by arranging an auction that would settle LCDS trades on the now bankrupt newspaper giant.

U.S. retail credit card chargeoffs are expected to surge in the coming months, according to Fitch Ratings’ latest Credit Card Index results.

Freddie Mac reported further modest declines in fixed mortgage rates this week, while adjustable-rate mortgages recorded increases.

DBRS came out with its U.S. auto loan ABS surveillance methodology, which describes its surveillance review process, including rating committee, rating actions and disclosure, as well as the surveillance methodology DBRS uses to analyze and monitor auto loan ABS transactions for potential rating actions.

Assured Guaranty Corp. is providing a surety bond guaranty of up to $1 billion for the benefit of Jupiter Securitization Co., a multi-seller ABCP conduit that is administered by JPMorgan Chase.

Babson Capital Management is ramping up global distribution with the establishment of the global business development group, as well as the hiring of a new global sales head and its first sales leader for Australia.

While General Growth Properties (GGP) recently received short-term extensions of the maturity dates for both corporate and non-recourse debt, default "of some kind appears imminent," according to Fitch Ratings in a report released yesterday.

Congressional approval for the second $350 billion installment of Troubled Asset Relief Program (TARP) funds may depend on the Treasury Department's ability to show that banks are actually using their government investment money to make new loans,House Financial Services Committee chairman Barney Frank, D-Mass., said Wednesday.

Genworth Financial, Richmond, Va., now has a definitive agreement to purchase InterBank, Maple Grove, Minn.

GMAC said it could drop its move to become a bank-holding company if more bondholders don't agree to its $38 billion exchange offer.

The Securities Industry and Financial Markets Association (SIFMA) and the American Securitization Forum (ASF) have created a U.S. Covered Bonds Council.

Riviere Servicing, an affiliate of Riviere Securities, LTD and GlobalTech Financial, has entered into a strategic agreement with CSC, a provider of technology-enabled solutions and services.

Ginnie Mae MBS hit $27.1 billion in November, which marks the second straight month the agency's MBS issuances surpassed government-sponsored enterprises Fannie Mae and Freddie Mac.

The Securities and Exchange Commission (SEC) has nearly completed a study on mark-to-market accounting and preliminary findings point to the need for additional guidance in valuing MBS in inactive or illiquid markets, according to SEC Chairman Christopher Cox.

Mortgage bankers will foreclose on 8.1 million homes over the next four years, representing 16% of all outstanding residential loans in the U.S., according to a new report issued by Credit Suisse.

Gulf Stream Asset Management said last week that it is establishing a credit dislocation fund and a multi-strategy credit hedge fund.

The financial crisis has exposed the "weaknesses" in the securitization market, Federal Deposit Insurance Corp. Chair Sheila Bair said, and it needs to be reformed through a re-alignment of interests to improve the long-term performance of mortgage-backed securities.