Securitization

The U.S. government has recently been aggressively pursuing measures to help the beleaguered housing market. One measure that has been getting a lot of attention would allow Fannie Mae, Freddie Mac and Ginnie Mae to purchase mortgages greater than the conventional conforming loan limit, which is $417,000 according to the Economic Stimulus Act of 2008.

This week, Mexico's Credito Inmobiliario is likely to become the first originator to collateralize a pool of construction bridge loans since before Fitch Ratings reported on heightened risk in the sector and Moody's de Mexico put Metrofinanciera's loan securitizations on downgrade review. Both events took place the third week of April.

At first blush, mortgage delinquencies in Ireland appear higher than almost anywhere in Europe. But the data can be deceptive if it includes the Irish "specialist" market, since the rest of Europe is limited mainly to prime lending.

Wintrust Financial Corp. in Lake Forest, Ill., has weathered the real estate downturn in part by specializing in the business of financing insurance premiums, and now it wants to free up capital for more traditional lending by securitizing premium-finance loans on its books.

With ABCP markets disrupted since last summer, the Bank of Canada began soliciting feedback in early March on its proposed eligibility criteria for accepting ABCP as collateral for borrowings under its Standing Liquidity Facility (SLF). The Bank of Canada's actions are an attempt to inject liquidity into a constrained ABCP market in Canada and to promote minimum acceptable standards of disclosure and transparency, which should benefit all market participants.

If there has ever been a time to make a campaign for mortgage insurance, current market conditions dictate that the time is now.

As the market looks for alternative investment opportunities and new ways to hedge risk, global index operator Markit has taken note.

As part of an ambitious plan to delay debt maturities and stay in business for another couple of years, Residential Capital (ResCap), the troubled real estate unit of GMAC, has offered to redeem $14 billion in bonds for as little as 77 cents on the dollar. The offer, announced May 2, expires June 3.

GMAC has had to put up with a lot of headaches lately, thanks to its residential real estate finance unit, Residential Capital.

The ABS market was in better spirits last week, thanks to BlackRock's announcement that it will purchase $15 billion of subprime mortgage debt from UBS.

UBS appointed heads to its new global capital markets group, an effort by the bank to combine the primary and derivative businesses of its equity capital markets and debt capital markets groups, according to published reports.

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

Mark Adelson, formerly head of ABS research at Nomura Securities International, has been appointed as managing director, chief credit officer at Standard & Poor's.

In announcing a fifth consecutive quarterly loss Wednesday, Irwin Financial Corp. in Columbus, Ind., said it would consider exiting its troublesome home equity business.

Brian Clarkson, president and chief operating officer of Moody's Investors Service, has decided to retire at the end of July, according to a memo from the rating agency. He will be stepping down in order to make way for new management to lead the company through its current changes in response to market criticism. “Challenging credit market conditions, combined with Moody's role and function in those markets, have created scrutiny and criticism from numerous external sources about various aspects of our business,” the memo said. Brian has also led the global structured finance, project finance, managed funds and public finance ratings businesses, as well as holding sales and marketing related positions in Moody's credit research and analysis products.

DBRS today announced that it will soon be launching a new series of monthly market reports.

Markit announced last Friday the addition of the ABX.HE.PENAAA sub-indices to the ABX.HE suite, which is expected to start trading on May 14.

UBS AG said it plans to cut about 5,500 jobs or 7% of its workforce, as it tries to grapple with $19 billion in losses related to the U.S. real estate and structured credit markets.

Swiss banking giant UBS AG is expected to announce today plans to exit the municipal bond business and put its muni group up for sale as it seeks to recover from losses the bank has said could total $12 billion, sources said yesterday.

The First Marblehead Corp. announced today that it is reducing operating expenses related to its student loan business and streamlining its operations. The company said it expects to lower its operating expenses by approximately $200 million pre tax on an annualized basis and has eliminated approximately 500 jobs on all levels of the corporate ladder.