Complete news archive

  • CRA examination report issued

    The US SEC has issued its annual staff report on the findings of examinations of the 10 credit rating agencies registered as NRSROs. Among the areas examined are whether each NRSRO conducts business in accordance with its policies, procedures and methodologies, as well as how an NRSRO manages conflicts of interest and whether it maintains effective internal controls.

    The 2013 .......

    News Round-up 2 January 2014

  • CDO auctions due

    Three CDO auctions have been announced so far this month. Sales are scheduled for the Longport Funding II, Libertas Preferred Funding I and Trainer Wortham First Republic CBO IV transactions on 17, 22 and 23 January respectively.

    The securities will only be sold if the proceeds are greater than the auction call redemption amounts. The collateral manager of Longport Funding .......

    News Round-up 2 January 2014

  • CRE CDO reorganised

    Collateral Management has been named successor collateral manager and successor advancing agent for Wrightwood Capital Real Estate CDO 2005-1. At the same time, servicing and special servicing rights for the CRE CDO have been transferred from Ares Commercial Real Estate Servicer to Trimont Real Estate Advisors and Torchlight Loan Services respectively.

    The move follows the transfer of equity interests in .......

    Job Swaps 2 January 2014

  • Countrywide settlement signed

    The Massachusetts state pension fund is to receive US$11.3m under a settlement with Countrywide Securities Corporation (CSC). The case is part of the Massachusetts Attorney General's industry-wide review of residential mortgage securitisation practices in the state.

    The total settlement agreed with CSC comprises the US$11.3m to compensate government investors with the Pension Reserves Investment Management Board (PRIM) and an additional .......

    Job Swaps 2 January 2014

  • Additional clearing relief provided

    The US CFTC has issued a no-action letter providing time-limited relief relating to certain occasional off-facility cleared credit default swaps (CDS) that are entered into pursuant to a DCO's rules related to its price submission process for determining end-of-day settlement prices for cleared CDS. The no-action letter provides that the Commission will not take enforcement action against a DCO for .......

    News Round-up 2 January 2014

  • Volcker reprieve for Trups CDOs?

    The US Fed, the FDIC, the OCC and the SEC are reviewing whether Trups CDOs should be subject to investment prohibitions under the Volcker Rule, after the American Bankers Association (ABA) agreed to delay advancing a lawsuit on the issue until 17 January. The agencies intend to address the matter by 15 January, with the ABA then having until 23 .......

    News Round-up 2 January 2014

  • HQLA move welcomed

    Further details have emerged on the EBA's updated definition of high quality liquid assets (HQLA) in relation to RMBS (SCI 20 December). Under the clarifications, RMBS bonds with the following criteria will be counted as HQLA for the purposes of the LCR: ratings of at least AA-/Aa3; minimum issue size of €100m-equivalent; maximum time to maturity of five years; and .......

    News Round-up 24 December 2013

  • Euro ABS, MBS outlooks mixed

    After declining this year for the first time since 2008, European ABS volumes are expected to rise again in 2014. European RMBS volumes are anticipated to be broadly steady next year, while the growth seen in investor-placed European CMBS issuance could slow, according to S&P.

    Investor-placed ABS issuance reached about €20bn in 2013, down from €27bn in 2012. That is .......

    News Round-up 24 December 2013

  • Lehman Australia claims progressing

    Amicus Advisory notes in its latest client memo that the outcome of the Lehman Brothers Australia Claims Resolution Process (CRP), when combined with the Insurance Only Scheme, is likely to lead to recoveries of around 50 cents on the dollar. The process for calculating losses is based on losses as assessed by Judge Rares in the Wingecarribee court case.

    "Similarly, .......

    News Round-up 24 December 2013

  • Loss criteria updated

    Fitch has updated its criteria for estimating losses on US mortgage pools for RMBS transactions to address updates to the treatment of borrower reserves and loan origination channel. The adjustments are not expected to affect any outstanding ratings, but the updated variable treatment may result in more conservative credit enhancements on newly-issued transactions.

    The core principle of the framework remains .......

    News Round-up 24 December 2013

  • ABCP outstandings to decline

    S&P believes that the US ABCP industry will continue to face obstacles to growth in 2014, specifically the complex regulatory environment, the sluggish economy and prolonged low interest rates. US ABCP outstandings reached a peak of US$1.2trn in July 2007, but declined sharply to US$254.1bn, as of 18 December 2013. The agency expects outstandings to modestly decline to US$210bn-US$240bn next .......

    News Round-up 24 December 2013

  • Positioning for new CDS definitions

    The implementation of the 2013 ISDA Credit Derivatives Definitions (SCI passim) is expected to tighten the CDS contract in favour of protection buyers, who should be motivated to roll to the new contract anyway for liquidity reasons. An implementing protocol is set to be introduced ahead of the 20 March implementation deadline, but Morgan Stanley credit derivatives strategists suggest that .......

    News 24 December 2013

  • Liquidation timelines lengthening

    With the US housing market seemingly on the path to recovery, the volume of distressed non-agency mortgages has this year dropped to less than half of what it was at its peak in February 2010, according to S&P. As of November 2013, US$232bn of non-agency mortgages remains in the shadow inventory, down from US$495bn at the beginning of 2010. However, .......

    News Round-up 24 December 2013

  • SAC Re sale completed

    Hamilton Insurance Group has completed its acquisition of SAC Capital Advisor's hedge fund-style reinsurer SAC Re after entering into a definitive agreement earlier this month (SCI 13 December). The acquired company is being renamed Hamilton Re and Brian Duperreault will serve as ceo.

    .......

    Job Swaps 24 December 2013

  • G-fee hike delayed

    Incoming FHFA director Mel Watt intends to delay the increase in GSE guarantee fees announced earlier this month (SCI 11 December), after he is sworn in on 6 January. The implementation will be delayed until he has had "the opportunity to evaluate fully the rationale for the plan".

    Limiting g-fee increases is a high-priority demand from consumer advocacy groups and .......

    News Round-up 24 December 2013

  • NAIC changes 'mildly positive'

    The US National Association of Insurance Commissioners (NAIC) last week released its 2013 model results for RMBS and CMBS bonds owned by insurance companies, which will be used to determine their capital requirements in 2014. The 2013 valuation process incorporates improvements in underlying macroeconomic assumptions, especially for the most conservative scenario.

    Approximately 68% of RMBS experienced an increase in NAIC .......

    News Round-up 24 December 2013

  • Cherry picking

    Euro relative value trades explored

    The European securitisation market offers a number of relative value opportunities going into 2014. Top picks include CLO 1.0, mezzanine CMBS and peripheral RMBS bonds.

    European ABS relative value is being driven by seemingly irrational investor behaviour and US appetite, according to Peter Nowell, head of ABS trading at BNP Paribas. He cites Dutch RMBS as an example: the sector .......

    News Analysis 24 December 2013

  • Rules of engagement

    Dialogue helps take edge off regulatory requirements

    Regulatory decisions and indecision have set the tone for structured finance around the world since the financial crisis. The European market in particular has been choked by tight guidelines, but there are signs of a softening regulatory stance as the industry continues to engage with regulators and policymakers.

    "The structured finance market is not dead. It has restarted in the .......

    News Analysis 24 December 2013

  • Multi-state servicing settlement sealed

    Ocwen Financial Corporation has entered into a US$2.1bn settlement with 49 states, the District of Columbia and the Consumer Financial Protection Bureau, which resolves allegations that the company engaged in mortgage servicing misconduct. Also included are Ocwen Loan Servicing, Homeward Residential and Litton Home Servicing.

    The alleged misconduct resulted in premature and unauthorised foreclosures, violations of homeowners' rights and protections and the .......

    Job Swaps 23 December 2013

  • KBC PPA amended

    The Belgian government has amended the Portfolio Protection Agreement (PPA) for KBC's CDO and ABS portfolio and added an incentive for the bank to accelerate reduction of the remaining exposure. Additional clauses have been added to the revised agreement that grant KBC a conditional discount on the outstanding premiums, under certain strict conditions and limited to a set maximum amount.

    News Round-up 23 December 2013

  • Korean covered bond act to spur issuance

    The passing of the Korean Covered Bonds Act makes South Korea the first Asian country to have dedicated covered bond legislation, which Fitch considers as a positive development for the wider Asia-Pacific covered bond market. The agency expects issuance under the Act to occur soon after it comes into force in March 2014.

    The Act is little changed from the .......

    News Round-up 23 December 2013
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