Complete news archive

  • Weighed down

    Secondary and primary markets hindered by broader concerns

    US RMBS trading over the previous two weeks has remained quiet in the face of continued volatility in the broader markets. Economic and political pressure continues to weigh on the secondary markets, while concerns over financial reform and regulation threatens to potentially hinder new issuance.

    One RMBS analyst notes: "It has been more anaemic in the sense that there aren't .......

    Market Reports 9 June 2010

  • Clearing consensus

    Pricing and liquidity concerns remain

    Market consensus finally appears to be forming around CDS central clearing, despite the lack of regulatory clarity. However, concerns remain about margin pricing and the liquidity of the CCPs themselves. (The full SCI Special Report on CDS clearing can be downloaded at the bottom of this page.)

    "Central clearing is the cornerstone of the regulatory overhaul in the US, but .......

    News Analysis 9 June 2010

  • Limited demand

    European ABS market activity in the week to 1 June

    Although European ABS had previously remained stable in the face of sovereign concerns, over the past week the market has begun to show signs of increased strain - most evident in the limited demand for and wider pricing of the recent Fosse deal. In addition, trading volumes are reportedly down from the previous month and largely confined to inter-dealer selling.

    Market Reports 2 June 2010

  • Fair value accounting standards update proposed

    The FASB has issued an exposure draft of a proposed accounting standards update intended to improve accounting for financial instruments (see also separate News Analysis). The proposals seek to bring more transparency to financial statements by incorporating both amortised cost and fair value information about financial instruments held for collection or payment of cashflows.

    The proposal also aims to provide .......

    News Round-up 2 June 2010

  • Report examines cost of derivatives reform

    Greenwich Associates has released a new report on derivatives reform, examining the consequences of trying to eliminate systemic risk. The firm says that new regulations will impose costs with a far-reaching impact on banks' ability to lend, the price and availability of credit for companies and consumers, and on companies' ability to protect their bottom lines against volatility in commodities .......

    News Round-up 2 June 2010

  • Continued support for Australian RMBS

    The Australian Office of Financial Management (AOFM) has issued a letter of support for the proposed APOLLO Series 2010-1 Trust RMBS issue, arranged by Suncorp-Metway. Suncorp submitted an issuance proposal to the authority in May, to which the AOFM replied asking Suncorp to consider modifying the capital structure of the proposed issue to assist the objectives of its RMBS investment .......

    News Round-up 2 June 2010

  • Ginnie Mae details pool programme changes

    Ginnie Mae released further details of the operational changes it is introducing to Ginnie II multiple-issuer pools. The programme changes, initially announced by Secretary of Housing and Urban Development Shawn Donovan in April, include enhancements aimed at minimising financial risk for warehouse lenders and making the programme more efficient for all lenders.

    "These programme changes reflect one more step in .......

    News Round-up 2 June 2010

  • Fosse prices wide

    Santander's second Fosse issuance this year has priced - after a two-week delay - at significantly wider levels than Lloyds Banking Group's Arkle RMBS a month earlier. In addition, it required substantial support from JPMorgan, which committed in advance to US$1.5bn worth of its class A1, A2 and A3 notes.

    While the £3.4bn-equivalent Arkle 2010-1 priced with spreads ranging between .......

    News Round-up 2 June 2010

  • CCP default guidelines published

    The European Association of Central Counterparty Clearing Houses (EACH) has published guideline default procedures to help its members prepare their own internal procedures and disclosure documents. EACH says the document is the result of work by its risk experts and serves as a response to calls for greater transparency.

    EACH supports the ESCB/CESR default procedures disclosure recommendation, noting that transparency .......

    News Round-up 2 June 2010

  • Investment manager adds to MBS fund roster

    DoubleLine Funds Trust has launched an open-end mutual fund focusing on US government treasuries, agency and non-agency MBS, CMBS, as well as global developed credit and emerging markets debt. The DoubleLine Core Fixed Income Fund is managed by lead portfolio manager Jeffrey Gundlach, ceo of DoubleLine Capital and adviser to the DoubleLine funds.

    Gundlach says: "The investment professionals at DoubleLine .......

    Job Swaps 2 June 2010

  • Increased verification requirements hit mod rates

    The number of newly started trial residential loan modifications dropped again in April to approximately 57,000 from 81,000, according to ABS analysts at Bank of America Merrill Lynch. They attribute this slowdown in part to the HUD supplemental directive 10-01, requiring increased documentation and verification, which took effect on 1 June (SCI passim).

    However, the BAML analysts note that at .......

    News Round-up 2 June 2010

  • No rating impact for Tahiti restructuring

    Tahiti Finance's restructuring proposal, published on 27 May, will not have an immediate rating impact on the transaction's outstanding CMBS tranches, says Fitch. The loan is in standstill until 1 July so that noteholders can consider the proposal, which will be voted on at an 18 June EGM.

    The Tahiti A and B facilities had been scheduled to mature on .......

    News Round-up 2 June 2010

  • LCDX illiquidity drives underperformance

    Leveraged loans lost 2.63% last month (as at 26 May), albeit the asset class has been more resilient than high yield, which has lost 4.13%. Cash loans have also outperformed derivatives, with LCDX returns down 5.13%, compared with a 6.32% loss for CDX HY.

    Credit strategists at Barclays Capital indicate that while loan returns have tracked high yield with a .......

    News Round-up 2 June 2010

  • 'Consistent' rise in CRE loan delinquencies

    Trepp's latest Monthly Delinquency Report indicates that the delinquency rate for commercial real estate loans in US CMBS continued to move higher in May, with the monthly rate of increase demonstrating remarkable consistency. For the last eight months, the rate of increase in delinquencies has been between 37bp and 49bp (after backing out the Stuyvesant Town impact in March). The .......

    News Round-up 2 June 2010

  • SN CDS clearing-eligibility to be assessed

    The DTCC has published data compiled from CDS trades registered in its Warehouse Trust Company at the request of market participants who will use it to assess which of the various single reference entities might have sufficient liquidity to be cleared through a central counterparty (CCP). The information includes market activity from 20 June 2009 through to 19 March 2010 .......

    News Round-up 2 June 2010

  • Distressed loan levels hamper stabilisation

    Lender Processing Services has released a mortgage monitor report suggesting that signs of stabilisation in US home loan delinquency and foreclosure rates remain largely neutralised by the more than seven million loans in distress. The report says the number of loans 90 or more days delinquent declined from 4,186,627 to 4,074,443 between March and April, with the total number of .......

    News Round-up 2 June 2010

  • 'Credit burnout' to improve subprime forward defaults

    Subprime and Alt-A current to delinquent roll rates have improved substantially versus their peaks in December 2008, according to ABS analysts at Barclays Capital. However, they point out that the improvement in jumbo performance has been marginal.

    The analysts note that a large part of the improvement in performance is due to better collateral composition of, and positive self-selection among, .......

    News Round-up 2 June 2010

  • TD expects lower securitisation gains

    Toronto-Dominion Bank subsidiary TD Bank Financial Group says its securitisation gains will be lower going forward, which will contribute to a higher loss level for Q210 versus Q209 on its 27 May conference call.

    TD also reported a loss of C$2m after taxes due to the change in fair value of CDS hedging its corporate loan book. Its Tier 1 .......

    Job Swaps 2 June 2010

  • Poll predicts pain for sovereigns

    A Fitch survey of senior European fixed income investors, conducted before the recent EU/ECB/IMF support package was announced, has revealed rising eurozone concerns. Respondents believe the bedrock asset class of eurozone sovereigns will have the most difficulty refinancing borrowings, against a backdrop of widening budget deficits and rising debt. Governments are also expected to face higher funding costs amid rising .......

    News Round-up 2 June 2010

  • London finance partner hired

    Mayer Brown has hired Chris Arnold as a new finance partner in its London office to strengthen its derivatives and structured products practice. Arnold started on 1 June, joining from Allen & Overy, where he spent eight years in the firm's international capital markets practice in London and New York.

    "Chris' appointment marks the next phase in our commitment to .......

    Job Swaps 2 June 2010

  • Fleet Street 2 controlling creditor changed

    An appraisal reduction notice has been issued by UK CMBS Fleet Street 2, which is based on a revised valuation it has held since February. The €486.5m appraisal reduction results in the class A noteholders becoming the controlling creditor and, consequently, the only class to vote on any further restructuring of the transaction.

    European asset-backed analysts at RBS suggest that .......

    News Round-up 2 June 2010
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