Securitization

The supply/demand technicals in the MBS market currently appear to be relatively stable.

Many financial institutions, including M&T Bank Corp., got burned by the CDO market's collapse resulting from the crumbling of subprime mortgages.

Community Reinvestment Fund saw its most recent private placement transform into its largest security offering to date. The demand for CRF-19, which priced on June 15, indicates this form of socially responsible investment hasn't fallen by the wayside in the dour economic environment.

When is the Federal Reserve's hand going to be forced on inflation? That was the question that was fueling early week action in the markets last week. On Monday, the tone was the Fed would be increasing rates rather soon. However, an article on Tuesday in The Wall Street Journal said maybe it will not be so soon. The resulting action in Treasurys was a sell-off on Monday with the curve holding flatter, then rallying on Tuesday and Wednesday with the curve steepening.

While issuance has slowed in virtually every sector of the credit markets, time-share securitizations remain relatively untouched by investor hesitation and the credit crunch, according to market participants, who noted that deal flow has been the same, if it has not increased, over the last six months.

Since the onset of financial market turmoil in August 2007, the European Central Bank (ECB), in line with other major central banks, has significantly expanded its term liquidity management operations.

Almost one year after the rating agencies had their first bloodbath of structured finance downgrades, and after months of market outcry for increased transparency and further ratings oversight, the Securities and Exchange Commission (SEC) has responded with an initial set of regulations. But while further ratings disclosure is needed, market pundits agree that these reforms do not solve the root of the problem.

Banco de Credito del Peru (BCP), a pro in the future flows world, is poised to price a deal backed by diversified payment rights (DPRs) shortly. Two of its peers that have yet to tap this market, BBVA Banco Continental and Interbank Peru, are reportedly planning debuts. Why this spark of activity from Peru?

Trading in the ABS market was steady last week as new issuance continued at a steady pace via credit card and auto transactions.

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

Fitch Ratings has been carefully tracking for the last several days last month’s interest shortfalls on certain subprime deals serviced by Ocwen Financial Corp.

Moody’s Investors Service yesterday downgraded to 'Aa3' from 'Aaa' the insurance financial strength ratings of Ambac Assurance Corp., Ambac Assurance U.K. and the debt ratings of Ambac Financial Group and related financing trusts. The rating actions come after a review for possible downgrade that was initiated by the agency on June 4.

Malcolm Knight, the general manager and chief executive officer of the Bank for International Settlements (BIS), said today that he's leaving the BIS at the end of September.

Many Street analysts are talking about the transactions that Ocwen Loan Servicing serviced that reported interest shortfalls seen in some of the senior classes. These were revealed by the May remittance reports.

Washington Mutual (WaMu) said yesterday that it has decided to eliminate the negative amortizing mortgage and WaMu Mortgage Plus loan options, according to published reports.

Risk Management Solutions (RMS) launched a new portfolio management platform today called Miu. The new platform supports the trading of insurance risk using RMS’ leading catastrophe risk analytics.

Fremont General has filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in a follow-up to regulatory approvals for CapitalSource to buy certain assets and liabilities of Fremont Investment & Loan (FIL), according to a company release.

Raiffeisen Zentralbank Osterreich (RZB) closed its €318 million ($492 million) securitization of Italian leases.

Fitch Solutions has launched a new platform called Fitch Risk and Performance Platform. This new platform will provide market-based credit risk analytics, credit default swap pricing and fundamental ratings content, according a release from teh rating agency.

Ambac Financial Group today said it has terminated its relationship with Fitch Ratings after deciding that it no longer had a need for the rating of the market’s smallest credit rating agency.