The American Securitization Forum has announced that its 2012 conference will take place January 22-25, 2012 at the ARIA hotel in Las Vegas, Nevada.
It is anticipated that over 4,500 participants will attend the 2012 event, and with the gradual resurgence being experienced in the securitization market, the conference promises to be replete with industry experts, legislators, issuers and investors.
In a press release today, Fitch announced the following:
Fitch Ratings has reviewed Princeton Advisory Group (Princeton) as a potential replacement collateralized debt obligation (CDO) asset manager for Prudential Structured Finance CBO I, and determined the manager's capabilities to be consistent with Fitch's criteria for credit asset managers.
On Oct. 4, 2010, Fitch was notified of a proposal to transfer the CDO asset management responsibilities for Prudential Structured Finance CBO I to Princeton. Fitch's review procedure for potential replacement CDO asset managers is outlined in the special report titled 'CDO Asset Managers: U.S. Replacement Activity Update', dated Dec. 9, 2010, available on the Fitch Ratings website.
Established in 2002 as a structured credit asset management firm, Princeton is a Securities and Exchange Commission (SEC) registered investment advisor headquartered in Princeton, New Jersey. Princeton is owned exclusively by active employees and currently has a staff of 10 professionals managing approximately $4 billion through its asset-backed securities (ABS) CDO platform. Princeton currently manages seven ABS CDOs, none of which are rated by Fitch.
Fitch emphasizes that the scope of its review was solely to determine that Princeton meets Fitch's minimum guidelines to manage Prudential Structured Finance CBO I within the context of Fitch's stated review procedure for replacement managers. Fitch is not a party to the transactions and therefore does not provide consent or approval, as that remains the sole preserve of the transaction parties. Fitch expects to be notified by the trustee when or if the proposed transfer of asset management responsibilities is completed.
The Securities and Exchange Commission today voted to adopt two sets of new rules designed to help revitalize the asset-backed securities (ABS) market by encouraging better disclosure for investors.
One set of rules that requires issuers of asset-backed securities to disclose the history of the requests they received and repurchases they made related to their outstanding asset-backed securities. The second set of rules requires issuers of asset-backed securities to conduct a review of the assets underlying those securities, and to disclose to investors the nature, findings and conclusions of the issuer's review of the assets.
In a press release today, SEC Chairman Mary L. Schapiro is quoted as stating:
"At one time, the securitization market provided trillions of dollars of liquidity to virtually every sector of the economy. However, during the financial crisis, ABS investors suffered significant losses, causing the market for securitization to rapidly decline. These rational measures are designed to help revitalize the important asset-backed securities market by encouraging better disclosure for investors."
Will these rules bring stability to the ABS market? Will investors and issuers react favorably? What do you think?
The American Securitization Forum has published the agenda for the ASF 2011 Conference taking place in Orlando, Florida on February 6-9, 2011.
This year's topics will include securitization legislative and regulatory reform, risk-based capital regulations, Regulation AB II, loan servicing and loss mitigation initiatives and GSE reform, among others. Current business developments and the outlook for all securitization asset classes and product types, including RMBS, credit card ABS, auto loan ABS, student loan ABS, and re-emerging sectors and business opportunities will also be examined.
Speakers have not yet been announced, but ASF is soliciting suggestions.
The American Securitization Forum today has released a detailed study on the principles of valid mortgage loan transfers in securitization transactions.
This project began in the wake of recent concerns expressed by commentators questioning whether securitization trusts (both private and government-sponsored) have valid legal title to the trillions of dollars of mortgage notes in those trusts. The initial response by the securitization industry indicated that the methods for conducting these transfers were "adequate and appropriate" and "in accordance with applicable law." The study results released today provide ample support for this position.
In a statement released to members, the American Securitization Forum stated that the study "...finds that traditional legal principles and processes, including the common law rule that “the mortgage follows the note,” are fully consistent with today’s complex holding, assignment and transfer methods for mortgage loans and those methods are legally effective for participants in the secondary mortgage market to transfer mortgage loans."
This is good news for the securitization industry and all its participants, and hopefully the study will provide reassurance to issuers and investors alike, such that the still sluggish securitization market can continue to improve.
On Friday, the American Securitization Forum issued a press release in response to rumors that transfers of residential mortgage loans to securitization trusts were not valid.
Specifically, in recent days, concerns had been raised as to whether the standard industry methods of transferring ownership of residential mortgage loans to securitization trusts were sufficient and appropriate. After consulting with various ASF member law firms, it was determined that these concerns are without merit, "as the conventional process for loan transfers embodied in standard legal documentation for mortgage securitizations is adequate and appropriate to transfer ownership of mortgage loans to the securitization trusts in accordance with applicable law. This process is sufficient to establish ownership by the securitization trusts."
Look for more information from the ASF on this topic over the coming weeks!
On August 2, 2010, the American Securitization Forum (“ASF”) filed two comment letters in response to the SEC’s recent proposals relating to Regulation AB. The first comment letter focused on ASF members’ views on the proposed revisions to Regulation AB, while the second comment letter focused on and set forth a specific alternative disclosure regime for asset-backed commercial paper transactions.
Reg AB, as it has come to be known, became effective on January 1, 2006, and set forth registration, disclosure and reporting requirements for asset-backed securities (“ABS”) under the Securities Act of 1933 and the Securities Exchange Act of 1934. In April 2010, the SEC, intending to improve investor protection and streamline the asset-backed market in the aftermath of the present financial crisis, proposed major revisions to Reg AB. If these proposals become effective, filing deadlines for ABS offerings would be revised, new shelf-eligibility criteria would be imposed, and prospectuses would be required to contain specified asset-level information about each of the assets in a pool.
The ASF, while concurring that additional investor protection is necessary and offering support for the new regulations, expressed a few concerns about the practicality of the SEC proposals and suggested alternative solutions. Whether the SEC is receptive to the suggestions of the ASF remains to be seen, but it seems certain that Reg AB will be amended in one fashion or another. What is also certain is that the securitization market, already on shaky ground, will be forced to adapt to these new regulations. Will these changes have a further chilling effect on the ABS market? Or will the new rules, in whatever form they are adopted, bring more investor confidence and result in a resurgence of asset-backed deals? Only time will tell, but it looks like the ABS market still has a bumpy road ahead of it.
The Journal of Structured Finance has published an article written by Shannon Frazier entitled "Trustee Representation in Structured Finance Transactions."
The article provides an overview of certain fundamental trustee issues that arise in virtually all financing arrangements involving a trust structure. Some of the topics discussed include capacity, indemnification and limitations on trustee liability, among others. Hopefully, the article will prove to be a valuable resource for parties to structured financings.
In July, the U.S. Senate passed and President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”), a 2,000 page bill containing what may be the most sweeping financial reforms since the Great Depression.
The Act itself proclaims that it is “An Act to promote the financial stability of the United States by improving accountability and transparency in the financial system, to end “too big to fail”, to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes.” With these goals in mind, the Act sets forth major overhauls of virtually every aspect of business, from the regulation of swaps, derivatives, and hedge funds to the fiduciary duties of brokers to executive compensation to the creation of the Bureau of Consumer Financial Protection and the Financial Stability Oversight Council, and more.
The task now facing the business and legal communities is a daunting one: to delve into the substance of the Act and come to understand the subtleties and nuances this new law, to find a way to transact business within the confines of these new regulations.
What this all means for the finance industry is unclear. On one hand, there is no doubt that the market hates uncertainty. It can be hoped that the certainty brought to the economic landscape by the passage of the Act will lead to greater stability and long-term growth. On the other hand, the complexity of the legislation and the new requirements of the Act may deter businesses from participating in the financing transactions that are so important to the movement of money within our economy. In either circumstance, the latter part of 2010 should be an interesting time for investors, attorneys, and Wall Street financiers alike.
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The American Securitization Forum has announced that the ASF 2011 Conference will be held February 6-9, 2011 at the Orlando World Center Marriott in Orlando, Florida. Billed as the “largest securitization conference in the world,” it is sure to be replete with industry experts, legislators, issuers and investors.
With over 1000 attendees, the ASF 2010 Conference in National Harbor, Maryland, was a hugely successful event and provided ample opportunities for networking with lawyers and businesspeople from across the country and throughout the world. The atmosphere at the 2010 conference was one of cautious optimism, as the players in the securitization industry began to see a slight thaw in the credit markets and a slow resurgence in securitization transactions. Hopefully, this trend will continue and the atmosphere at the ASF 2011 conference will be even more positive. We will find out if that is the case come February!
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Shannon S. Frazier
Phone: 302.888.6916
sfrazier@morrisjames.com
Jonathan G. Strauss
Phone: 302.888.6848
jstrauss@morrisjames.com