RMBS

  • Picking sides

    Challenges and opportunities in search for relative value

    Ongoing speculation about the future of Greece has dominated the market's attention, but it is not the only concern weighing on participants' minds. Nevertheless, European ABS still offers great value for those who know where to look.

    "We are at a place where trading is gradually reduced. Secondary activity is down in Europe and the US as everybody watches Greece. .......

    News Analysis 22 June 2012

  • Mixed blessings

    Action needed to attract European investors

    Some ABS traders in Europe are expecting to use their balance sheets more over the coming months to support clients. While the rise of BWICs is aiding execution for sellers, more needs to be done to attract a broader investor base to the market.

    Increasingly heavy use of BWICs has been a mixed blessing for European ABS traders. While the .......

    News Analysis 22 June 2012

  • Euro CMBS sees spread recovery

    After softening earlier in the month, the European CMBS market has recovered over the last week. The Global ABS conference seems to have marked a turning point, but events in the RMBS market also appear to be having an effect.

    "Activity has definitely picked up lately, especially in senior CMBS. The real money guys have been looking for paper and .......

    Market Reports 21 June 2012

  • Operation Twist extended

    Operation Twist is set to last through to year-end, having been slated to end this month (SCI 22 September 2011). The FOMC yesterday directed the New York Fed's Open Market Trading Desk to continue its programme to extend the average maturity of the Federal Reserve's holdings of Treasury securities.

    Specifically, the desk was directed to purchase Treasury securities with remaining .......

    News Round-up 21 June 2012

  • Granite, Aire Valley buy-backs announced

    Northern Rock Asset Management (NRAM) and Bradford & Bingley (B&B) have announced tender offers for Granite, Whinstone 1 and 2 and Aire Valley subordinate notes. The two firms aim to strengthen their capital base by purchasing the notes at a discount to par. They intend to purchase approximately £500m of notes via a modified Dutch auction by 3 July.

    Given .......

    News Round-up 20 June 2012

  • Pepper gains Irish foothold

    Pepper Home Loans Group has agreed to purchase GE Capital Woodchester Home Loans, the Irish residential mortgage business of GE Capital, as it expands into Europe. Pepper will also take over the servicing of GE Capital's Irish portfolio of personal, small enterprise and auto loans.

    The newly-acquired company will be renamed Pepper Ireland and Pepper will hold all of the .......

    Job Swaps 19 June 2012

  • Irish RMBS rating drift examined

    Underlying collateral performance has deteriorated sharply, arrears management practices have become increasingly 'borrower-friendly' and sovereign creditworthiness has declined over the past four years in Ireland. All of these trends have contributed to a downward drift in ratings on Irish RMBS, according to S&P.

    While the Irish RMBS market accounts for only about 5% of total European RMBS issuance, the sector .......

    News Round-up 19 June 2012

  • Sovereign-linked downgrades highlighted

    S&P reports that rating actions on banks and sovereigns were once again the major factors affecting its European structured finance ratings in 1Q12. Both downgrades and upgrades increased, with most downgrades affecting RMBS transactions.

    "We took 1,594 rating actions in the quarter, comprising 1,100 downgrades and 494 upgrades. This represents a significant increase from the previous quarter, which saw 393 .......

    News Round-up 19 June 2012

  • Korean financial shock warning

    Moody's says that Korean household loans have characteristics that make them vulnerable to financial shocks and tail risks arising from the European debt crisis and China's economic slowdown.

    "This can lead to a deterioration in loan performance in Korea; in turn, exerting pressure on ABS and RMBS transactions," says Marie Lam, a Moody's vp and senior credit officer.

    The agency .......

    News Round-up 19 June 2012

  • Tamweel sukuk marketing

    Tamweel is in the market with its second international Islamic RMBS - the US$235m Tamweel Residential RMBS (Cayman) IV. The first such transaction from the six countries of the Gulf Cooperative Council was issued in July 2007.

    The deal comprises a single class of notes, rated Aa3 by Moody's. Proceeds will fund the purchase of properties in Dubai and certain .......

    News 19 June 2012

  • MBS, rates team expanded

    Zachary Pace, Aaron Read and Tai Vu have joined Gleacher & Company Securities' MBS and rates group. The group provides structured finance, research, sales and trading services on RMBS, ABS, US Treasury and government agency securities, CLOs, CDOs and other securities.

    Pace and Read join as directors while Vu becomes vp. Pace joins from Bank of America where he was .......

    Job Swaps 18 June 2012

  • APAC ratings remain stable

    Fitch reports that Asia-Pacific (APAC) structured finance (SF) tranches remain largely stable, with 85% of the tranches maintaining their ratings in 2011, unchanged from 2010.

    Downgrades outnumbered upgrades for the fourth year in a row and by an eight-to-one margin in 2011. The low number of upgrades last year can be partially attributed to the fact that about 46% of .......

    News Round-up 18 June 2012

  • Weak credit demand forecast for Spain

    House prices in Spain have dropped by a nominal 22% since 1Q08. But fundamentals point to a further 25% decline, S&P says.

    "House prices in Spain are a key variable in the performance of the country's economy. The housing boom built up unsustainable imbalances, such as an oversupply of dwellings, which will need to fully correct before a sustainable recovery .......

    News Round-up 15 June 2012

  • Dutch house prices to fall further

    Fitch expects Dutch house prices to fall by around 7% further due to worsening macroeconomic factors. This would take house prices to about 18% below their 2008 peak levels and on par with prices in 2004.

    The agency has marginally increased its peak-to-trough house-price decline from 15% because of the continuing rise in unemployment in the country. Uncertainty surrounding the .......

    News Round-up 15 June 2012

  • ResCap moves to settle put-backs

    Residential Capital has moved for permission to settle put-back claims held by approximately 392 RMBS trusts, Lowenstein Sandler notes in a recent client alert. Under the proposed settlement, the securitisation trusts would drop potential breach of representation and warranty claims - which are worth an estimated US$221bn - and in return would receive a US$8.7bn bankruptcy claim against debtors Residential .......

    News Round-up 15 June 2012

  • Maiden Lane loans repaid

    The New York Fed says that its loans to the Maiden Lane and Maiden Lane III vehicles have been fully repaid with interest. The original amounts of these loans were US$28.82bn and US$24.3bn respectively. Maiden Lane II repaid all of its obligations earlier this year (SCI 29 February).

    The successful repayment of the Fed's loans to ML and ML III .......

    News Round-up 15 June 2012

  • Fannie, Freddie alignment encouraged

    Fannie Mae and Freddie Mac must align their operations as much as possible, SIFMA says. It has set out a strategic plan urging the FHFA to view the GSEs together, rather than as separate silos.

    The association believes that market performance indicates a crucial gap in the actual and perceived performance and liquidity of the MBS issued by the GSEs. .......

    News Round-up 14 June 2012

  • Lending standards key for RMBS

    A low interest rate environment at the time an Australian mortgage loan is written is not a significant guide to future performance, says Fitch. The agency believes lending standards are a more relevant factor in determining a loan's performance over the long term.

    "Fitch analysis suggests there is little correlation between delinquency rates and the interest rate at loan origination. .......

    News Round-up 12 June 2012

  • Rating agency lowers Greek ratings cap

    S&P has taken various credit rating actions on the Greek RMBS and ABS notes it rates. All ratings are now capped at single-B minus as a result of the agency's updated assessment of Greece's country risk and the implications of the country leaving the eurozone.

    S&P says it previously considered structured finance transactions backed by Greek assets to have a low .......

    News Round-up 12 June 2012

  • Ambac motions approved

    Following a hearing held on 4 June, the Circuit Court for Dane County, Wisconsin approved the two motions submitted by the Wisconsin Commissioner of Insurance, acting as the rehabilitator of the Ambac Assurance segregated account (SCI 18 May).

    The first motion sought to allow the segregated account to begin paying in cash 25% of each permitted policy claim that has .......

    News Round-up 12 June 2012

  • CRA expands RMBS methodologies

    Morningstar Credit Ratings has released its new issue and surveillance rating methodologies for US non-agency, prime, alternative-A and subprime RMBS. The agency says that, in response to growing investor demand for greater rating agency transparency, it is providing investors with the economic scenarios that drive specific rating categories. Its RMBS analysts will use both the published rating scenarios and a .......

    News Round-up 12 June 2012
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