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Orlando Conferencegoers Won't Get Much Sun
Asset Backed Alert, Harrison Scott Publications Inc. (November 3, 2006)

Issuers of bonds backed by mortgages and home equity loans are about to face a lot of tough questions, as they join a horde of other securitization professionals at Information Management Network's annual "ABS East" conference.

While investors remain hungry for new offerings, many are worried that rapid rises among home-loan default and delinquency rates this year will eventually affect the quality of bonds secured by those products. They intend to take advantage of IMN's summit, which kicks off Sunday at the JW Marriott resort in Orlando, to grill lenders about their plans for warding off trouble.

"Everybody says they are tightening their loan-underwriting standards. Well, that's nice, but give me some specifics," said one money manager who often repackages asset- and mortgage-backed securities into collateralized debt obligations.

The buyside push for information means that the 3,000-plus individuals who signed up for the four-day conference won't have much time for Mickey Mouse diversions. In fact, the anticipated 889 investors and 503 issuers in attendance will be swamped with more meetings than ever before.

IndyMac, for example, is deploying a team of seven to run three simultaneous series of meetings with 46 separate investment shops on Monday and Tuesday alone, head trader Andrew Sciandra said. At previous conferences, he and another staffer were able to handle all of the Pasadena, Calif., lender's meetings by themselves, sitting down with investors one at a time.

"This is the first time I've had so many requests for meetings that I had to schedule several tracks during the same days," Sciandra said, noting that he could have arranged even more appointments.

For issuers who have their acts together, IMN's conference presents a good chance to show bond buyers how they are coping with recent downturns in the home-loan market. Their answers to investors' questions about why they're writing certain types of mortgages and how those credits are monitored or serviced could affect demand for their securitizations, and thus influence their funding costs going forward.

"[Mortgage lenders] need to show us what they're doing," said one portfolio manager who has set up meetings with 23 separate issuers, which is also more than usual for him.

The outlook for mortgage-related bonds is also likely to be a big part of panel discussions and cocktail-party chatter throughout IMN's gathering, said Kevin Duignan, who oversees the groups at Fitch that rate term asset-backed securities and commercial-paper conduit issues.

Duignan is scheduled to moderate the conference's official opening panel on Monday, focusing on the state of the market. "It won't be a Bush-Kerry conflict, but I think we should have a variety of opinions," he said, referring to the 2004 presidential candidates who were sniping at each other again this week.

In addition to ABS East, IMN has registered 260 people for a separate event on Tuesday focusing on asset-backed commercial paper and structured investment vehicles. That conference will be held at the Ritz-Carlton Orlando Grande Lakes, which is next door to the venue for ABS East.



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