Month: April 2010

Rating Agency Developments

On April 28, S&P issued a press release relating to the reemerging RMBS market and discussing practical considerations of its (i) enhanced mortgage originator review process, (ii) criteria for standard representations and warranties, and (iii) process for reviewing third-party due diligence firms and collateral pool submissions and reports.  S&P Release.

On April 27, Moody’s released its updated methodology for rating U.S. REIT CDOsMoody’s Methodology

On April 27, S&P released its updated methodology and assumptions for rating global credit derivative product companies.  S&P Release

On April 23, S&P published its assumptions for base-case credit losses for Italian banksS&P Release

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Rating Agency Developments

On April 22, Fitch announced its plan to address the implementation of the recent amendment to SEC Rule 17g-5 related to disclosures with respect to structured finance credit ratings.  Fitch Release.

On April 19, S&P updated its methodology and assumptions for rating U.S. credit card ABS.  S&P Release.

On April 15, S&P revised its methodology for rating interest-only (IO) securities.  S&P Release.

On April 16, Fitch addressed long-term Issuer Default Ratings (IDRs) for equity real estate investment trusts (REITs) and real estate operating companies (REOCs), as well as credit ratings for revolving credit facilities, long-term senior debt obligations, and preferred stock of these issuers.  Fitch ReleaseFitch Report.

On April 22, DBRS released its methodology for rating U.S. insurance premium finance securitizations.

 DBRS Release.

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Reserve Bank of India

On April 19, the Reserve Bank of India released a discussion paper entitled “Emerging Trends in Regulation and Supervision of Securitisation Activities of Banks”.  The paper outlines the ongoing international work in regard to a minimum holding period and a minimum retention requirement for loans originated for securitization.  The Reserve Bank of India seeks comments to the proposals outlined in the paper in preparation for its release of detailed guidelines regarding a lock-in period and other operational details in line with developing international norms.  Discussion Paper.

FASB Letter on Lehman Repos

On April 19, the FASB sent a letter to the House Financial Services Committee on selected accounting guidance relevant to Lehman accounting practices.  The letter summarized the current accounting and reporting standards relating to repurchase agreements and consolidation of SPEs and, in particular, discussed Lehman’s Repo 105 and Repo 108 transactions.  FASB Letter.

FDIC Note Offerings Backed by Loans and Real Estate

On April 20, the FDIC closed on two note offerings backed by performing and non-performing construction loans, residential loans and real estate owned (REO) assets formerly held by the FDIC as receiver for Corus Bank and Franklin Bank. These offerings are the second and third sales of structured sale notes by the FDIC since the early 1990s, and the second and third sale of FDIC guaranteed debt backed by the full faith and credit of the United States.  FDIC Release.

Rating Agency Developments

On April 14, Moody’s published an updated methodology for rating repackaged securities.  Moody’s AnnouncementMoody’s Methodology

On April 12, S&P refined its methodology for the asset stress analysis applied to U.S. insurers’ capital adequacy.  S&P Release.

On April 9, S&P updated its methodology for assessing the equity content of B shares issued by U.K. financial institutions, and the treatment of fees paid by institutions participating in the U.K. government’s Asset Protection Scheme. S&P Release.


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FDIC Approves Notice of Proposed Rulemaking to Revise Deposit Insurance Assessments

On April 13, the Board of Directors of the FDIC approved a Notice of Proposed Rulemaking to revise the deposit insurance assessment system for large institutions, which pose unique and concentrated risks to the Deposit Insurance Fund. There will be a 60-day public comment period after publication in the Federal Register.  FDIC Release.

Obama Administration Seeks Public Input on Reform of the Housing Finance System

As HUD Secretary Donovan mentioned in his testimony before the House Financial Services Committee (see above), the Obama Administration, on April 14, released questions for public comment to solicit input from market participants, industry groups, academic experts and consumer and community organizations on the future of the housing finance system in the U.S., including Fannie Mae and Freddie Mac, and the overall role of the federal government in housing policy. Information regarding the process for submitting comments will be included in a notice to be published in the Federal Register. The Administration will also hold public hearings to get additional feedback.  Administration Release.