Securitization

Just as one segment of the student loan ABS sector seemed to get a lifeline from federal authorities, the private side of the market took another hit. Last week, The Education Resources Institute. (TERI), filed for Chapter 11 bankruptcy after a downgrade from Moody's Investors Service tripped a trigger on a loan contract that resulted in the company having to post cash to cover its student loan guarantees.

Credit card delinquency and charge-off rates continued their upward climb on a sequential and year-over-year basis in January, according to the latest data gleaned by Moody's Investors Service.

As things fall apart at MBS and CDO operations throughout the securitization industry - creating a void in financial services - small teams of executives have begun to regroup as hedge and distressed-asset funds to start picking up the pieces.

For more than nine months, the market has been attempting to sort through the tangled web of counterparty risk that has entrapped Wall Street.

When the subprime RMBS and HEL markets began to fall apart, the market watched as billions in mezzanine CDO liquidations routed spreads, undermined investor confidence and siphoned liquidity from the securitization markets.

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

Credit Suisse is splliting the management of its global securities division among four executives after Michael Ryan, the former sole head of the unit left the bank, according to Financial News. Gael de Boissard, Tony Ehinger, Steve Kantor and Jonathan McHardy will now be the heads of global securities and report to Paul Calello, head of the Credit Suisse's investment bank.

The Royal Bank of Scotland is set to slash 200 staff in its global banking and markets businesses this week as a response to the global economic credit crunch. The bank said the elimination of jobs is not driven by the cost cutting program that has been initiated after its ABN Amro acquisition last year.

Markit has purchased NTC Economics, which offers global macro-economic indicators and owner of the Purchasing Manager’s Index (PMI) series.

Moody's Investors Service has placed under review for possible downgrade the ratings of 93 notes in 12 National Collegiate Student Loan Trust transactions. The actions follow Monday's bankruptcy filing of The Education Resources Institute (TERI). Moody's downgraded TERI's rating on Tuesday to 'Ca' from 'B2.'

The Securities Industry and Financial Markets Association (SIFMA) and the American Securitization Forum (ASF) offered comments today on the Federal Reserve Board of Governors’ Proposed Rule to Amend the Home Mortgage Provisions of Regulation Z.

The Education Resources Institute (TERI) filed for Chapter 11 yesterday. According to a report from Barclays Capital, Moody’s Investors Service's downgrade of TERI to 'B2' from 'Baa3' on March 26 tripped a trigger in a loan contract. This resulted in the student loan firm’s having to post cash to cover its student loan guarantees.

U.K. battered mortgage lender Northern Rock reported a loss of £199 million ($391.55 million) over the year compared to a profit of £443 million in 2006.

Local government bodies in the Australian state of New South Wales have been forbidden from making new CDO investments and other structured credit products until December 2009.

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

Sen. Edward Kennedy (D-Mass.) introduced legislation that would improve access to federal loans and increase the amounts of Pell Grants for certain college students, saying that Congress “cannot allow problems in the credit market to prevent students from going to college.”

Despite its current difficulties, Bear Stearns took the top spot in the U.S. RMBS manager rankings for 1Q08, according to Thomson Financial data. The bank rose from a second place finish for all of 2007 and third place in the first quarter of last year.

Fitch Ratings said that last week's downgrade of UBS AG to AA-' from AA' does not have a negative impact on the ratings of the Broadgate Financing PLC securitization.

Without a doubt, a puzzle looms over the student loan finance business. How will students continue to finance their educations amid the potential withdrawal of $20 billion from Federal Family Education Loan Program (FFELP) programs, reductions in subsidies to lenders that provide certain FFELP loans?

Through the worst of Argentina's post-devaluation recession, a securitization of oil and gas royalties originated by the province of Salta made good on its payments. But now, six years after the economy touched bottom and subsequently entered a prolonged growth spurt, the province may end up doing what many Argentine issuers did six years ago - restructure.