Sign up today and take advantage of member-only content — the kind of timely, cutting edge industry insight that only Structured Finance News can deliver.

• Exclusive Online Only Content
• Structured Finance Weekly Recap and ASR Europe, our free email alerts
• Industry White Papers
• Expert Blogs

CDOs Section

News

Loan Market Is Summer’s New Roller Coaster

Market participants believe the loan market is about to take another plunge. Nowhere else has the recent rally made more of an impact than in the CLO market.

PF2 Securities Hires Legal Associate

PF2 Securities Evaluations, a provider of CDO security evaluations and analytics, hired Ilona Roze as a legal associate.

CMRA Hires Head of Fixed Income

Financial advisory firm Capital Market Risk Advisors hired Peter Niculescu as partner and head of fixed income.

ASF To Hold Major Conference in Washington

Departing from its usual spot in Las Vegas, the American Securitization Forum will be holding its annual 2010 conference in Washington, D.C.

Removal of Delinquent Assets Cause CREL CDO Delinquencies to Level Off

Fitch Ratings has observed a larger number of asset managers removing credit impaired assets at prices below par, resulting in realized loss to CDO collateral.

More

Articles

The CLO Deep Discount Dilemma

In recent months, portfolio managers of cash flow CLO vehicles have been faced with the unenviable task of keeping their CLOs afloat in an environment in which bank loan prices in the global loan markets have declined to unprecedented levels. This task has become increasingly difficult, due in large part to certain provisions in the underlying CLO documentation that, in today's illiquid market, no longer operate as intended. At a time when it is more important than ever for managers to actively manage the credit risk in their CLO portfolios, CLO managers have suddenly found their hands tied by provisions that, while initially conceived to safeguard the credit quality of CLO portfolios, now serve as a disincentive for managers to replace credit impaired loans with stronger ones. This article will examine the dilemma confronting CLO managers who wish to improve their portfolios by trading rapidly deteriorating loans for better-performing so-called 'deep discount' loans.

Govts. Clutch the Reins

Over the last year, laissez-faire has become seriously dated. Whether in the U.S., in Europe or even in some emerging markets, capital-market participants are now banking on their governments to bail them out. And as this month's ASR demonstrates, that once-maligned approach seems to be working. Although the results haven't been extraordinary, they've generated at least some equilibrium in the markets, both here and across the pond.

2009 ­The Credit Downturn Takes Its Toll on ABS

The outlook for the securitization market in 2009 is bleak. Problems related to ABS are manifold and a recovery of the securitization market is not yet in sight. On the one hand, the future prospects of the securitization business highly depend on a stabilization of the financial industry overall. On the other hand, the credit cycle downturn will clearly test the solidity of European structured finance notes. Uncertainties related to ABS are high. An apparent example for the current market dislocation is the CLO sector - European leveraged loan CLOs are on the radar screens as undercollateralization is imminent. The European ABS market has seized up. This is mainly due to three reasons: a) the fundamental deterioration of assets, originators and investors, b) the ongoing secondary market dislocation and persisting imbalance in terms of demand and supply, which is impacting spreads and c) uncertainty related to the rapidly changing rules of the ABS game.

Govt./Private Sector Join Forces for Another Distressed Asset Cleanup

Treasury Secretary Timothy Geithner's announcement of the revamped Financial Stability Plan proved to be a showstopper during the American Securitization Forum's (ASF) annual industry conference held earlier this month in Las Vegas. But reactions were mixed. While ABS market participants welcomed a plan that could finally bring back investors who have retreated on pricing discrepancies and the lack of regulatory framework, they did not see enough detail to restore confidence.

MBIA Spins Off Public Finance Only Insurer

Following through on a transformation plan announced last year, MBIA last week said it has restructured its insurance subsidiaries to form a new U.S. public finance-only insurer that will operate separately from its structured finance business. Bond insurance subsidiary MBIA Insurance Corp. ceded its entire $537 billion book of public finance business to subsidiary MBIA Insurance Corp. of Illinois, which MBIA expects to rename National Public Financial Guarantee Corp. and limit to writing only U.S. public finance business. MBIA has paid MBIA Illinois approximately $2.89 billion for reinsuring the public finance business and also capitalized it with an additional $2.09 billion.

More