Securitization

The story remains the same in Europe. Much of what little public ABS deal flow there is continues to be retained for European Central Bank eligibility.

Greece launched its inaugural covered bonds earlier this month via the Ä8 billion program by Alpha Bank.

The July remittance reports offered no surprises, staying true to analyst expectations of further credit performance deterioration.

The International Organization of Securities Commission (IOSCO) announced last week a three-point plan to monitor compliance of its new code of conduct for credit rating agencies (CRAs). This was done amid charges that its proposed plan will do little to restore market confidence in ratings.

Last week, Treasury Secretary Henry Paulson and a consortium of leading banks echoed what many investors have been considering for months now - the potential liquidity benefits of a growing covered bond market.

With the U.S. population growing older and baby boomers hitting retirement age, life settlement plans are likely to see a boost in the coming years. These plans allow life insurance policyholders to sell their existing policies on a secondary market for a negotiated cash amount that is more than the cash value of the policy but less than the net death benefit. This has industry participants forecasting substantial growth in the sector and searching for opportunities to expand their platforms, even into in the capital markets.

Programwide credit enhancement (PWCE) is an essential component in the analysis of global ABCP programs, according to a new Fitch Ratings report.

The U.K. Council of Mortgage Lenders' (CML) hopes of kick-starting the U.K. RMBS and covered bond markets have been quashed before they ever got off the ground, although they have at least challenged the notion that some solution must be implemented to get U.K. mortgage lending going again.

Though spirits were higher than usual last week, trading remained flat in the secondary market and investors' focus was on selling. New issuance on the primary side was, as usual, meager.

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

Ambac Financial Group will pay Citigroup $850 million to settle one of its largest CDO exposures. This is for guaranteeing a CDO transaction worth $1.4 billion.

The House Financial Services Committee approved a bill by Rep. Carolyn Maloney Thursday that would rein in a slew of common credit card practices. The committee approved the measure with a vote of 39 to 27 including two Republicans who cosponored the bill — Reps. Walter Jones and Chris Shays.

IndyMac Bancorp plans to file for voluntary Chapter 7 protection in the U.S. Bankruptcy Court for the Central District of California.

Guggenheim Capital Markets (GCM) has expanded its research and analytics capabilities by hiring Scott Buchta as head of a new investment strategies group.

Cadwalader, Wickersham & Taft will lay off 96 lawyers in the U.S. and Britain as a result of the continued slowness in real estate finance and securitization, according to published reports.

The Securities Industry and Financial Markets Association (SIFMA) credit rating agency task force issued its recommendations for credit rating agency reform today.

Based on its expectation that Financial Guaranty Insurance Corp. (FGIC) will experience further credit deterioration on its book of business backed by residential mortgage-backed securities, Fitch Ratings this morning dropped its insurer financial strength rating on the company to 'CCC' from 'BBB'. The rating was also placed on evolving watch.

The Financial Accounting Standards Board (FASB) on Wednesday delayed implementation of a rule FAS 140 that could force issuers of securitized assets —including mortgages — to post more capital on bonds guaranteed and held off the balance sheet.

GMAC swung to a second-quarter loss as it took a $716 million lease-down and recorded more losses from its Residential Capital unit, which the firm said is beginning to stabilize.

Scott Valentin, an analyst at Friedman, Billings, Ramsey & Co., raised his rating of Advanta Corp. to "market perform," from "underperform," on Wednesday, writing that the stock has fallen to a point at which "valuation better reflects risks."