Securitization

By purchasing Wachovia Corp., Citigroup — which is receiving federal aid on the deal — will pick up additional market share in both residential lending and servicing, challenging Bank of America, Chase, and Wells Fargo for the top perch in the industry.

Following in Fannie Mae's footsteps, Freddie Mac yesterday announced changes in its senior management and organization that are effective immediately.

As the market waits on the vote for the Emergency Economic Stabilization Act of 2008, which includes the Troubled Asset Relief Program (TARP), research is coming out on initial thoughts about it.

The roll dates for the Markit CDX North America Investment Grade, Markit CDX North America Investment Grade High Volatility, Markit CDX North America Crossover, Markit CDX Emerging Markets and Markit CDX Emerging Markets Diversified indices have been postponed again by index dealers because of “market conditions and requests from their clients.” These indices will now roll into new versions on Oct. 2, 2008 instead of Sept. 29, 2008.

The U.K. Treasury announced today that it has transferred part of Bradford & Bingley's (B&B) business to Abbey National. The remainder of B&B’s business will remain in public ownership.

The acquisition of Washington Mutual by JPMorgan Chase will likely make JPMorgan into more of a powerhouse in RMBS issuance.

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

Last week U.S Secretary of the Treasury Henry Paulson extended the biggest lifeline to the financial markets of all time - and perhaps made the biggest gamble with U.S. taxpayer money - when he announced a plan to purchase approximately $700 billion in troubled assets from U.S. financial institutions.

As Congress battled over the terms of the Treasury bailout plan last week, Christopher Ricciardi, chief executive officer at Cohen & Co. and former managing director of global structured credit products at Merrill Lynch, launched an alternative proposal to the government's purchase strategy under the Troubled Asset Relief Plan (TARP) .

Lehman Brothers's collapse has set back the recovery in European ABCP, as it gave the already jittery investor base more reason to stay away.

As the U.S. works to put together its Troubled Asset Relief Program (TARP), comments by U.S. Treasury Secretary Henry Paulson suggest that similar schemes are being crafted in some non-U.S. countries.

It's taken a while for the pull-back in bank lending across the globe to hit Mexico's states and municipalities.

Lloyds TSB's £12 billion ($22.2 billion) takeover of HBOS averted a Northern Rock-style run on the bank and has, at least for now, secured the performance of the troubled bank's securitization deals.

The rally from the government's rescue plan to buy troubled assets did not carry over into last week's trading. As the markets opened Monday, uncertainty regarding details of the plan as well as its impact on inflation and the economy replaced the initial euphoria. The dollar sank and crude oil jumped $16 to just under $121 a barrel, causing equities to tumble 373 points and the 10-year Treasury to fall 15+/32nds on the prospect of higher supply.

Despite being backed by borrowers with better credit histories, prime collateral - specifically in jumbos - is facing its own set of problems.

Par-based investors in the triple-A CLO market may soon have their sense of security tested. Many still apparently cling to the assumption that their bonds will ultimately be repaid at par, based on the senior position of these bonds in the transaction structure and the corresponding protection from potential losses.

The ABS market remained in limbo last week as Congress and the Treasury fleshed out plans for the government's Troubled Asset Relief Program (TARP).

It's fitting that the Financial Accounting Standards Board (FASB) released its proposed changes to Statement 140 and Interpretation 46 (R) the week the Lehman Brothers bankruptcy news broke.

The ABX remittance reports for the month of September showed that 60+ delinquencies are still increasing, but at slightly slower rates.

Federal regulators shut down $307 billion-asset Washington Mutual Bank, the largest failure in American history, late Thursday, selling its assets and deposits to JPMorgan Chase.