Origination

Seven classes of notes issued by Oxford Street Finance Ltd., a collateralized debt obligation that consists partly of subprime mortgage-backed securities, have been downgraded and placed on Rating Watch Negative by Fitch Ratings. The downgrades were as follows: class B, from AA-plus to A; class C, from AA to BBB; class D, from AA-minus to BB; class E, from A to CCC; class F, from A-minus to CC; class G, from BBB to CC; and class H, from BB-plus to CC. Classes A1 and A2 were also placed on Rating Watch Negative. The negative rating actions were attributed primarily to "the negative credit rating migration within the [asset-backed securities] portion of the underlying collateral." The ABS exposure consists of subprime residential MBS from 2005 to 2007. The synthetic CDO references a 2.0 billion euro diversified portfolio of primarily investment-grade corporate bonds in addition to the ABS, Fitch said.

Thanks largely to the weak U.S. dollar, the prospects are good for solid performance this year by the U.S. hospitality sector, according to the 2008 U.S. Lodging Report by Ernst & Young LLP. International tourists are looking to the United States as a "prime vacation spot" and are spending more money, the company reported. "The continued weakness of the dollar is producing multiple beneficial effects on the U.S. hotel market, which is likely to continue for the foreseeable future and which may pull the sector through current recessionary pressures," said Michael Fishbin, U.S. director of hospitality and leisure at Ernst & Young. The company can be found online at http://www.ey.com.

First American eAppraiseIT, Poway, Calif., has announced the introduction of a valuation tool that it says offers quick, low-cost, accurate values for credit decisions, loss mitigation, portfolio analysis, and quality assurance. The standard Data Assist report verifies a property's legal address and ownership and includes three closed-sale comparables from the subject property's market area, the company said. Data Assist with Listings offers the same information, plus three current listings that are similar to the subject property. "Many lenders are now looking for more alternatives [to automated valuation models]," said Michael Fosser, senior vice president of business development for eAppraiseIT. "Data Assist can provide a high level of confidence without adding significant cost or delay to these transactions." The company can be found online at http://www.eappraiseit.com.

New-homes sales fell 1.8% in February -- the fourth consecutive monthly decline -- and builders will be hawking a large inventory of newly built houses as the spring homebuying season begins. The U.S. Census Bureau reported that sales of new single-family homes fell from a seasonally adjusted annual rate of 601,000 in January to 590,000 in February -- down 30% from the level recorded in February 2007. The January number was revised upward by 13,000 sales -- which is some good news. However, builders still have a 9.8-month supply of unsold homes on their hands, and the economists at the National Association of Home Builders don't expect to see a jump in sales this year. The NAHB's latest forecast projects that sales will remain at a 603,000 seasonally adjusted annual rate in 2008 -- going up to 714,000 in 2009. The Census Bureau, an agency of the Commerce Department, can be found online at http://www.doc.gov.

MGIC Investment Corp., Milwaukee, is selling 37.34 million shares of its common stock in a public offering priced at $11.25 per share. The price, announced before the markets opened on March 25, is $2.05 below the $13.30 at which MGIC's common stock closed the day before. In a Securities and Exchange Commission filing, Curt S. Culver, chairman and chief executive of MGIC, said he would purchase 25,000 shares from the offering. MGIC will receive gross proceeds of $420 million, compared with the $350 million the company said it was hoping for in its original March 18 announcement. The underwriters of the offering have an option to purchase an additional 5.6 million shares at the $11.25 price. MGIC has also agreed to sell $325 million of 9% convertible junior subordinated debentures due 2063. MGIC is selling the debentures in a private placement transaction. MGIC can be found on the Web at http://www.mgic.com.

A coalition of reverse mortgage counseling agencies and experts on caring for the elderly has announced the formation of the National Housing Counseling Association. The NHCA will support 501(c)(3) housing counseling agencies approved by the Department of Housing and Urban Development in the delivery of reverse mortgage counseling services, the organization said. "With the near exhaustion of available HUD funds for [Home Equity Conversion Mortgage] counseling, and the delay in HUD's borrower pay regulation, many counseling agencies are being forced to cut back on counseling services," said NHCA spokesman Chuck Stanley. "NHCA has developed an industrywide approach to accessing additional grant funds without the perceived conflict of interest associated with direct contributions by individual reverse mortgage lenders."

A.M. Best Co., a credit rating agency headquartered in Oldwick, N.J., has downgraded Ogden, Utah-based Great Western Insurance Co.'s financial strength ratings from B-plus-plus to B-plus and its issuer credit rating from bbb-plus to bbb-minus because of problem investments in collateralized debt obligations. Its outlook has been revised from positive to stable. Great Western took a loss in 2007 because of the impairment of some of its CDOs. Best says it is worried about a possible negative impact from the company's remaining CDOs. "With continuing concerns over a weakened credit market and significant deterioration in the subprime mortgage loan market in the United States, A.M. Best notes that Great Western's balance sheet will remain under financial pressure, as additional CDOs may be impaired going forward," the rating agency said. "As a result, Great Western's capital and surplus position could decline further and could lead to additional pressure on the company's risk-adjusted capitalization relative to its insurance and investment profile."

The decline in house prices continued to accelerate in January, as prices fell to a level that was down 10.7% nationally over the previous 12 months, according to Standard & Poor's/Case-Shiller housing price index, which tracks home sales in 20 metropolitan statistical areas. The December report indicated that house prices declined by 9.1% in 2007, and it appears that the biggest declines are occurring in lower-priced homes that likely were financed with subprime loans. "This is the first national decline in house prices," Professor Karl Case said, adding that the "subprime phenomenon" is an important contributing factor. Lower-tier homes (priced at less than $157,248) in 15 of 17 cities posted the largest percentage increase in house prices since 2000, the Wellesley College economics professor said. But the lower-priced homes also have seen the greatest decline in prices since the peak. "It will clearly take those markets a long time to recover," Mr. Case said during a conference call. Separately, the Office of Federal Housing Enterprise Oversight reported that home prices fell 1.1% in January on a seasonally adjusted basis. "For the 12 months ending in January, U.S. house prices fell 3%," OFHEO said.

HCP Inc., a real estate investment trust based in Long Beach, Calif., will replace Commerce Bancorp Inc. in the S&P 500 Index after the close of trading on March 31, Standard & Poor's has announced. S&P said the reason for the change is that Commerce Bancorp is being acquired by The Toronto-Dominion Bank. S&P can be found online at http://www.standardandpoors.com.

The formation of Capital Markets Investment Group, a group of commercial real estate professionals specializing in the sale and acquisition of office investment properties throughout the Western United States, has been announced. CMIG said its brokers average over 20 years of experience in the commercial real estate industry. "Membership in CMIG allows brokers to strategically align with the nation's top office investment professionals regardless of their association with a particular firm," said David Tilton, a CMIG member and senior managing director of Fredrick Ross Co. in Denver. CMIG can be found online at http://www.cmig1.com.