News & Analysis: All

Discussing possible future scenarios for the GSEs—which will have a big impact on how the U.S. secondary mortgage market evolves—Treasury Secretary Henry Paulson did not have very much to say about where covered bonds might fit in.  Even so, it is worth looking at the few things he did say on that topic in his address to the Economic Club of Washington (Jan 7).

It’s not news that covered bonds are currently in the doldrums—even in their European strongholds—or that experts there predict relatively few new “jumbo” covered bonds in 2009.  So it was encouraging to see UBS end the year with a Swiss issuance in the neighborhood of US $1.83 billion (two million Swiss francs). 

According to a public statement from Sonnenschein Nath & Rosenthal LLP, the law firm is picking up what appears to be substantially the entire Structured Finance Group of  Thacher Proffitt & Wood LLP, along with three other practice groups.   The move is expected to commence as of January 1, 2009.   Management of the Thacher firm reportedly announced plans to dissolve.

It hasn’t received much attention in the U.S., but Germany’s Hypo Real Estate Group—long a giant in the world of international finance—suffered very severe wounds in recent months.  Much of the harm came through a Dublin-based subsidiary, Depfa, whose global public sector financing included substantial infrastructure projects.  After Lehman Brothers foundered, Depfa faced collapse.  Now, bleeding red ink and dependent on German government support, Hypo is obliged to pull back and graze closer to home.