Securitization

Commercial finance company CIT Group has agreed to a $3 billion long-term financing commitment from Goldman Sachs, a deal that was announced yesterday.

Fitch Ratings downgraded the financial-strength ratings of the U.S. mortgage insurance businesses at MGIC Investment Corp. and PMI Group to A-plus from 'AA', saying that 2007, "a year of rapid growth for a number of key" players, "will likely prove to be one of the worst underwriting years in the modern history of the U.S. mortgage industry."

BNP Paribas appointed Namuk Cho, managing director and head of flow, hybrids and exotics trading for the Americas on Monday.

On Friday, Accredited Home Lenders Holding disclosed that Jeff Walton will replace Jim Moran as chief executive officer effective immediately.

Australian investment bank Macquarie will be setting up a U.S. bond insurer unit with initial capital of $2.5 billion.

Mayer Brown will be hosting a monthly series of teleconferences on the business impact and legal challenges arising from the ongoing credit market disruptions.

Moody's Investors Service in its latest index report for U.K. nonconforming mortgages said that, over the coming quarters, two factors will drive deliquency levels up: 1) borrowers who are coming off of their fixed interest mortgage rate period and experiencing payment shock and 2) the lack of refinancing options.

Babson Capital Europe appointed Andrew Godson as head of distribution.

Kevin Kanouff has resigned from his position as president of Clayton Fixed Income Services, which is the Denver-based subsidiary of data analysis provider Clayton Holdings. His resignation is effective in two weeks.

The Mortgage Bankers Association's National Delinquency Survey added to the negative news for the housing market.

At a time when most large investment banks are slashing their fixed-income teams, Cantor Fitzgerald is making a hiring push in its debt capital markets group. Shawn Matthews, who heads the group and is based in New York, runs a sales and trading desk that already boasts more than 200 salesmen and traders. Bank Loan Report sat down with Matthews recently to discuss the group's expansion.

As the market nears the one-year anniversary of the current credit crunch, many industry participants have gotten past the initial phase of shock and have refocused their attention on learning from past mistakes.

Securitization is not going away any time soon despite the market storm that has rocked global credit markets, according to Jose Manuel Gonzalez Paramo, a member of the European Central Bank's (ECB) executive board, who says the reselling of debt such as mortgage loans and credit cards is still a valid business model.

Often associated with energy and corporate lending more than housing, Russia's Gazprombank nonetheless has a sizable mortgage book ($1.9 billion), and three RMBS deals under its belt for a total RUR15.8 billion ($666 million). The issuer is also a pioneer of sorts, having been the first Russian originator to place a deal under Russian RMBS legislation in December 2006. Gazprombank's last RMBS was in June, when it closed a mixed euro/ruble deal for a total RUR6.9 billion via Barclays Capital Markets and its own arranging unit. Not surprisingly, since then public borrowing has been limited to a one-year, and a three-year, unsecured loan closed last March for a total $450 million.

Turkish banks have been quiet on the securitization front since most of the monoline bond insurers stopped wrapping structured deals.

The European securitization investor psyche can be pretty hard to access given the limited opportunities they currently have. But as the market gears for a recovery, tailoring deals to the buyers' needs is the key to their success.

Tighter credit conditions have prompted some corporations to turn to conduits where they borrow by staking their receivables as assets, according to one market participant who said the CDO market is still subdued.

The impending summer slowdown is nothing new for the CDO market, which has already seen a slow pace of issuance for almost a year now.

There was no red carpet laid out for the thousands of industry players that made it out to the Palais des Festivals et Des Congress in Cannes, the new home of Information Management Network's and European Securitization Forum's (ESF) Global ABS conference.

Dan Castro has left GSC Group for Huxley Capital Management, a start-up private equity company/hedge fund, where he will be chief risk officer. In his new position, Castro will be working alongside founders Bryan Caisse and Dr. Chris Donegan.