DealZone

Keeping score: NBC, asset-backed bonds

Highlights from this week’s Thomson Reuters Investment Banking Scorecard:

COMCAST-NBC UNIVERSAL LIFTS MEDIA M&A
The proposed combination of Comcast and NBC Universal into a 51:49 joint venture brings the announced volume of mergers in the media and entertainment sector to $79.7 billion, a 31% decrease from last year at this time.
The transaction is valued at $14.4 billion, which signifies GE’s net asset contribution and ranks as the second biggest transaction in the sector this year, after DirecTV Group’s $14.5 billion merger with Liberty Entertainment in May.  Overall, worldwide M&A totals $1.9 trillion, down 33% compared to 2008 levels.

SECURITIZATIONS PULL AHEAD OF 2008 LEVELS
The volume of new asset-backed and mortgage backed securities total $498.9 billion for year-to-date 2009, a 3% increase over 2008 levels.  After a nearly 85% decline in 2008, the market for securitizations of residential mortgages, credit card receivables and auto receivables has slowly returned aided by US government guarantee programs.
Issuers in the United States account for 38% of overall activity this year, followed by UK-based issuers with 15%.

ASIA PACIFIC M&A DOWN 11%
Asia Pacific M&A activity totals $367.5 billion for year-to-date 2009, an 11% decrease from 2008 levels.  Consolidation in the financial, high technology and energy and power sectors accounts for 45% of announced deal volume this year.
High technology merger activity has more than doubled in the region, while activity in the telecommunications and materials sectors has seen declines of 77% and 45%, respectively.

Noted: 5-year funk means no office firesales

 	 REUTERS/Toby MelvilleDespite a looming wave of defaults, sell-offs of European offices at knock-down prices are unlikely, because commercial property prices are likely to tread water for years, rating agency Moody’s says.

in a report on the region’s commercial mortgage-backed bond market, Moody’s said it expects more loan defaults, but doesn’t think commercial property values will “materially recover” for the next five years. (Reuters report here.)

This means that special servicers — the administrators responsible for deciding the future of bust securitisations — “will not pursue immediate sale of the properties … but rather continue to collect the rental cash flows where possible and dispose of the properties under more favourable conditions, which may reduce ultimate losses,” the agency said.

Curiouser and curiouser

The rabbit character from Alice in Wonderland poses next to a mural artwork at entrepreneur Marc Ecko's anti-sundance party, with a Mad Hatter Tea Party theme, during the 2008 Sundance Film Festival in Park City, Utah January 20, 2008. The 20-feet mural depicts paparazzi with actual cameras built into the art. REUTERS/Fred Prouser (UNITED STATES)Seen with a post-bubble eye, securitisation is a bit of a looking glass world. Lewis Carroll would probably have appreciated “synthetic” obligations not built on real assets, near-meaningless credit ratings, and legal documents that fail to do what they are designed for.

So spare a thought for holders of asset-backed bonds who have had to take a trip down the rabbit hole.

Some of the worst-affected bonds are commercial-mortgage backed securities (CMBS), which in Europe have suffered largely because of the plunging value of the property used as security for the debt.

Keeping score: bankruptcy boom

The Thomson Reuters Investment Banking scorecard lands again. Here are the highlights:

BAAT Offers Largest Auto Loan Securitization of 2009

A US asset-backed offering fell among the top global debt deals of the week, as Bank of America Auto Trust (BAAT) offered a $3.9 billion TALF-eligible auto loan securitization, the largest such ABS offering this year.  In total, auto loan backed issues have accounted for 35.7% of US ABS, the largest share of the approximately $80 billion so far in 2009.

As a whole, securitizations are down 30% in the US and 39% globally over 2008 levels.  This week marks the third largest week for ABS activity in the US during 2009 with $9.7 billion of issuance.