Service Providers Rally Around New Approaches to Build Investor Confidence in Debt Capital Markets

Abstract

What should service providers do to rebuild investor confidence, restore investor comfort, and thereby help re-ignite the securitization market? This article looks at three areas in which service providers must broaden their engagement in the investment life-cycle. First and foremost, they need to play a role in making asset origination more transparent and accessible to investors and more verifiable by them, and the article suggests ways to do that. Second, in the issuance phase, where we expect more simplified structures, providers are already engaging in helping investors analyze asset pools and connect with issuers. Examples of valuation and auction trading are cited. And finally, some providers are ramping up their ongoing monitoring of underlying assets and periodic reporting on the investment process. Conclusion: Change is alive and well and promises some interesting developments.

TOPICS: MBS and residential mortgage loans, CMBS and commercial mortgage loans, developed