Securitization

Former CMBS strategist for UBS Securities filed complaints with different courts, claiming that UBS and its parent corporation, UBS AG, fired him unjustly.

Morgan Stanley plans to sell a single-asset deal called Morgan Stanley Capital I Trust 2012-STAR worth $340 million.

Barclays Capital believes that at least one of Freddie Mac’s proposed changes to its HARP 2.0 program will potentially increase prepayments for pre-HARP loans.

Standard & Poor’s stated that cigarette consumption is the most significant factor in determining the credit strength of tobacco securitizations.

Fitch Ratings said in a report today that it is looking to extend its CMBS rating methodology to address the particular attributes of single loans made by insurance companies and other institutional investors.

The loan limit on VA-guaranteed loans is slated to move up to $729,750 again, staying there for two years now that House of Representatives has passed a Veterans benefits bill.

Ally Financial lost $898 million in the second quarter, blaming its troubled (and bankrupt) mortgage banking division, Residential Capital Corp. (ResCap), for its problems.

The financial health of state housing finance agencies (HFA) is mixed, Fitch Ratings reported Tuesday.

For years, U.S. banks, and especially the largest ones, have dreaded the seemingly inevitable arrival of new and more burdensome regulatory capital requirements. U.S. banking regulators' proposal to revamp those requirements, issued in mid-June, should dispel many of their fears, although the proposal is likely to result in extra work for U.S. banks and may put them at a disadvantage to global competitors in the ABS market.

A sharp pick up in the issuance of CLOs this year hasn't resulted in much reshuffling in the ranks of credits held by these deals. In fact, there was no movement in the top five names between the first and second quarters.

"Industry consolidation outweighs new issuance as the key driver for shifts in the manager rankings, in the U.S. and Europe," Moody's analysts wrote in the newly released July edition of "CLO Interest," which includes CLO manager league tables as of June 30, 2012, updated for the first time since August 2011.

With the rated securitization market staging a comeback and bank financing more readily available, investors in ABS placed in the traditional private market are increasingly confined to smaller deals backed by more esoteric assets.

As the New York Federal Reserve moves closer to completing the winding down of its Maiden Lane (ML) vehicles, investors face a falloff in inventory volumes. This poses a further challenge in this yield-starved environment.

Commercial banks, still busy with the business of tidying up their portfolios and shrinking balance sheets, are slowly getting back to small business lending. However, the void created by their long absence has been increasingly filled by both smaller regional banks and nonbank lenders. It's the latter that are driving securitization because it increases their access to funding, allowing them to grow lending volumes.

The ASF recently released a white paper entitled "Discussion of a Proposed Single Agency Security" that outlines the issues to be addressed in effectively merging the securities markets of Fannie Mae and Freddie Mac to reduce "TBA market inefficiencies." This column will discuss the implications of unresolved issues raised by the report.

By the end of this year, RMBS issuers keen on obtaining funding from the European Central Bank, as well as those already using these securities as collateral in sale and repurchase agreements, will need to input data on the underlying mortgages into the newly created European DataWarehouse, known pithily as ED.

Scheduled to launch later this year, the European DataWarehouse will, for the first time, house loan-level data on a wide range of loans backing the region's ABS. The European Central Bank is the information repository's biggest client and champion.

Securitization market participants welcomed Deutsche Annington's July 10 announcement of German Residential Asset Note Distributor's (GRAND) proposed loan restructuring.

With interest rates low and federal housing initiatives in full force, the July prepayment report, scheduled for release in August, is expected to show an increase in speeds.