Securitization

At the onset of CDO troubles this past summer, market participants predicted that tough times would weed out the established players from the fly-by-night shops. As the CLO market begins to pick up, it appears the predictions might be coming true.

By any standards, Brazilian consumer debt is exploding. The balance of credit cards, payroll-deductible loans, unsecured loans and auto loans totaled R$264 billion ($1.57 billion) at the end of 2007, up 29% from a year earlier.

Dan Sparks, the head of Goldman Sachs' mortgage business, is leaving the firm.

Fitch Ratings has issued a statement responding to the International Organization of Securities Commissions' (IOSCO) consultation report titled The Role of Credit Rating Agencies in Structured Finance Markets. The statement follows the submission of joint comments by the major rating agencies.

FTSE Group appointed Ronnee Ades as business unit head in alternatives. Ades will be responsible for driving growth within FTSE’s existing alternative asset class index series, which includes REITs, commercial property, hedge funds, private banking and infrastructure. She will also focus on identifying opportunities in new alternative asset classes.

The ABX reports released late Friday showed 60+ delinquencies increasing, although at slightly slower rates. Analysts from Merrill Lynch attributed the rise to seasonality. The delinquency increase for the ABX indices was expected and is based on the roll rates and the 30-59 and 60-89 day delinquency pipelines. However, the pace of increase in 60+ day delinquency levels seems to be slowing.

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

Mortgage rates jumped this week, according to Freddie Mac's weekly survey. "Average rates on mortgages increased across the board this last week as the most recent economic data raised inflationary concerns in the capital markets," said Frank Nothaft, Freddie Mac vice president and chief economist. This reduced the expectations of a cut in the Fed Funds rate to 25 basis points at next week's Federal Open Market Committee meeting from 50 basis points expected prior to the news.

Residential Capital (ResCap), an indirect wholly owned subsidiary of GMAC Financial Services, has appointed Thomas Marano, former senior managing director and global head of MBS and ABS at Bear Stearns to serve as ResCap's non-executive chairman of the board of directors. Marano succeeds former chairman Michael Rossi. As announced previously, Rossi resigned from the board effective March 17 because of medical reasons. Aside from joining the ResCap board, Marano has been appointed to the board's executive committee where he will serve with ResCap's chief executive officer Jim Jones.

Ambac Financial Group, parent of bond insurer Ambac Assurance Corp., announced a net loss of $1.66 billion in the first quarter driven by losses on subprime-related securities the monoline guarantees, including nearly a billion dollars in actual payments the company expects to make.

Springfield and Boston, Mass.- based Babson Capital Management has acquired Murray Capital Management (MCM), a distressed debt and special situations management outfit based in New York.

A Senate banking committee hearing regarding the turmoil in U.S. credit markets and the role of the credit rating agencies was held this afternoon. Senator Christopher Dodd (D-Conn.) and Senator Richard Shelby (R.-Ala.) were there to question Securities and Exchange Commission Chairman Christopher Cox regarding the SEC's examination of a number of reforms for rating agencies.

Jefferies & Co. is expanding its MBS group, adding 10 senior professionals to its mortgage trading team over the next several weeks, the bank said today.

Archibald Cox, Jr., was appointed chairman of Barclays Americas, a region in which the company hopes to build its position in its investment banking and investment management businesses. Cox will start his new job in early May. He will report to Barclays President Robert E. Diamond, Jr., and will also serve on Barclays’ IBIM executive committee.

Fitch Ratings released revised criteria for rating market value structures (MVS) after a review that the rating agency first announced in December 2007. The review was a response to unforeseen stresses on current market value instruments.

Potential job losses are piling up at Citigroup. After reporting that it suffered a first-quarter net loss of $5.1 billion, the financial group said it would cut 9,000 jobs from its work force.

The first quarter of 2008 brought a slew of grim announcements for the financial guarantor industry, including a decision by some to put new business on hold altogether. But despite market troubles, the monolines held on in the beginning of 2008, even if only by a thread.

With several years of smooth traveling behind them, a group of Mexican toll road transactions have hit potentially shaky ground.

The Basel committee last Wednesday announced plans to enhance Basel II, a move that involves some extra steps to "strengthen the resilience of the banking system."

Bank of America is planning to launch a partially supported asset-backed commercial paper conduit with the flexibility to buy ABCP debt from other vehicles as well as non-dollar denominated assets.