Research Newsletter

2008 | 2007 | 2006 | 2005 | 2003 | 2002 | 2001

We are pleased to re-introduce you to the SVO Research Newsletter. We intend to publish on a consistent basis. Our goal is to assist regulators in their insurer solvency monitoring function. To accomplish this we aspire to provide coverage of emerging investment issues, trends and risks in the financial markets as they pertain to the insurance industry. Our experienced and knowledgeable research professionals along with our seasoned credit analysts seek to share informative articles on the latest developments in the world of finance and provide a unique insight into some of the most noteworthy transactions that come through this office.

We welcome your thoughts and comments and any ideas for future articles.

Chris Evangel

To obtain copies of our most recent issues, please email SVO Research at svoresearch@naic.org or visit the NAIC Store and click SVO Index in the Publications section.

2008

Volume VI , Issue IV

Table of Contents

• Mono-Line Insurers/Financial Markets Teetering
• Insurer Exposure to Homebuilders: Housing Slump Darkens Sector's Outlook
• A CPDO Fails the Stress Test
• Life and Property/Casualty Insurers Face Increased Investment Risk
• Mortality Risk Bonds' Underwriting Risk FE Carve Out
• Subprime Mortgage Write-Downs: Kitchen Sink Period or Early Rounds of Bout?
• CDOs Under Pressure as Massive Downgrades Take Center Stage
• Insurers Reduce Exposure to Lower Rated Subprime Securities
• ABX Indices Marking-to-Market Further Massive Mortgage Losses
• Domestic Newspaper Industry Difficulties Compounded 2007
• Creditor Protections of Agricultural Cooperatives
• It May Not Be Credit Risk But There is Risk in "AAA"
• Unforeseen Weaknesses in Aircraft Leveraged Leases
• Managing Director's Commentary

2007

Volume VI, Issue III

Table of Contents

• SVO Survey of Insurers’ Subprime Mortgage Investments
• The Timeline of NRSRO Response to Mortgage Deterioration
• CDS Scope High Mortgage Losses, Implications for Insurers
• Structured Finance Ratings Underperformance By Wide Margin
• Countrywide Hybrid Update: In Distress Correlation Picks Up
• Rating Agencies Find Minimal Subprime Impact On Insurers
• Subprime Contagion Spreads
• No Let Up in Housing and Mortgage Market Deterioration
• Wind Power: Market Developments and SVO Rating Methodology
• High Risks of Biotech Industry Investment
• European Commission Attempts to Open Utility Market, Again
• FASB: Advancing the Fair Value Agenda

Volume VI, Issue II

Table of Contents

• New Types of Risks Repackaged into CDOs
• Hybrid Trading Value
• An Exploration of Insurers’ Investment Portfolio
• Hedging with Credit Default Swaps: Proper Risk Management Critical
• The Life Settlement Asset Class
• Investment-Grade Bondholders Overlooking Leveraged Recap Threat
• Auto Loan ABS and the Subprime Market
• Asset/Liability Management and Interest Rate Swaps
• Aircraft Asset-Backed Securities on the Rise
• Solar Energy: Partial Solution for Energy Independence
• What’s Tier 1 Got To Do With It?

Volume VI, Issue I

Table of Contents

• The Perfect Storm Hits Subprime Mortgages
• Islamic Bonds Attract Western Interest
• Toggle Notes Grow in Popularity
• Rising Foreclosures Point to Gathering Storm
• LBO Concerns Fuel Sales of Hybrid Bonds
• The ABCs of ABCP: A Look at a Growing Market
• Second Lien Loans — A New High Yield Asset Class
• The Ethanol Industry Heats Up
• CDARS: Investment Vehicle Offers FDIC Coverage for Large Deposits
• Electric Utility Industry Faces Key Challenges
• SFAS 158 to Alter Balance Sheets

Volume V, Issue IV

Table of Contents

• SVO Roils Hybrid Market? — Not Exactly
• Trouble Looming in Mortgage Bonds?
• The Consumer ABS Market and Insurers’ Exposure
• 2005 Household Income, Distribution, and Dispersion
• Credit Rating Agency Reform
• Mortgage Credit Quality: Softening Trend Beginning to Emerge
• Default Rates Remain at Record Lows — But for How Long?
• Fannie Mae, Freddie Mac — Systemic Risk
• Americans Without Health Insurance Reaches All-Time High

2006

Volume V Issue III

Table of Contents

• Sidecars Emerge as Alternative Capital Source
• CAT Bonds -- Securitized Event Risk
• Household Debt, Consumer Credit, & Credit Card ABS
• The Risk of Credit Default Swaps
• The Return of Leveraged Buyouts
• IT Services Industry: Key Credit Factors
• U.S. Capital Goods Spending Expansion Continues
• The Art of the Designated Deal
• Chronological List of SVO Research Reports

Volume V Issue II

Table of Contents

• Rating Triggers-Undisclosed Potential Death Spirals
• Discovering Critical Investment Information in the Footnotes
• Introduction to Mortgage Backed Securities
• Soaring Issuance and Improved Performance for CDOs in 2005
• How Oil and Gas Reserves Impact E&P Companies
• A New Media Order: Communications Spending in the 21st Century
• How the NAIC Evaluates Principal Protected Notes
• 2005 Insurer Investment Recap
• Chronological List of SVO Research Reports

Volume V Issue I

Table of Contents

• Hybridization Continues: A Security that is Both Debt and Equity
• Credit Derivatives Could Get Much Riskier in 2006
• Third Quarter Review of Insurer Investment in Common Stock
• Global Bond Defaults: 2005 Updates
• Insurer Commercial Mortgage Loan Volume on Record-Breaking Pace
• Insurer Exposure to Refco, Inc.
• Hurricane Katrina and First Mortgage Loan Investments in FEMA—Designated Countries
• Impact of Katrina on Financial Guaranty Insurers
• SVO Staff Profiles
• SVO Statistics: 2005 Credit Function "Exceeds" Production Expectations
• Chronological List of SVO Research Reports
  

2005

Volume IV Issue III [PDF]

Table of Contents

• Private Placement Bonds
• The SEC and the NRSRO Concept: Implications
• Collateralized Fund Obligations: A CDO Innovation
• SVO Chemicals Medians vs. Moody’s and S&P
• SVO Analyst Profiles
• SVO Statistics

Volume IV Issue II [PDF]

Table of Contents

• Heavy Equipment Dealers On Cyclical Upswing
• Use of Financial Derivatives by Insurers
• The Computer Industry in 2004: Review and Outlook
• Insurance Industry Exposure to General Motors and Ford
• SVO Analyst Profiles
• SVO Statistics

Volume IV Issue I [PDF]

Table of Contents:

• Life Insurance Securitization
• US Corporate Pensions
• Introduction to Credit Default Swaps
• Home Equity Loan Securitization
• A Primer on Real Estate Investments Trusts (REITs)

2003

Volume III Issue II [PDF]

Table of Contents

• CDO/CBO/CLO 2002 Performance Review
• Credit Tenant Loans
• Global Corner: Brazil Bounces Back as Investor Confidence Returns
• Default Watch
• Market Data Watch
• Recent Rating Agency Actions for Insurance Companies
• Chronological List of SVO Research Reports

Volume III Issue I [PDF]

Table of Contents

• Update: Insurer Investment in Catastrophe Bonds 
• From the Director: Chris Evangel
• Global Corner
• Semiconductor Industry: Review and Outlook
• Default Watch
• Market Data Watch
• Recent Rating Agency Actions for Insurance Companies
• Chronological List of SVO Research Report

2002

Volume II Issue IV [PDF]*

Table of Contents

• Portfolio Composition of Insurance Companies 
• From the Director: Chris Evangel
• Not-for-Profit Organizations: A Review
• Insurers Investment in European Sovereign Debt
• Chronological List of SVO Research Reports

Volume II Issue III [PDF]*

Table of Contents

• Chapter 11 for Nations? 
• From the Director: Chris Evangel
• Synthetic Leases
• Insurance Industry Exposure to Tyco International Ltd. 

Volume II Issue II  [PDF]*

Table of Contents

• Corporate Bond Defaults: First-Quarter Update 
• From the Director: Chris Evangel
• Insurer Investment in Structured Securities
• Monoclonal Antibodies, Anyone? The Medical Biotechnology Industry 

January 2002  [PDF]*

Table of Contents

• The One-Year Anniversary of Provisional Exemption 
• From the Director: Chris Evangel
• The Telecommunications Equipment Industry: Review & Outlook, January 2002
• Kmart and Global Crossing 

2001

December 2001 [PDF]*

Table of Contents

• Insurer Asset Exposure to the Enron Default 
• From the Director
• Replication (Synthetic Asset) Transactions 
• Foreign Sovereign Holdings by U.S. Insurers 

November 2001 [PDF]*

Table of Contents

• Argentina, the IMF, and Currency Boards
• From the Director 
• Insurer Investment in Foreign Sovereign Securities: Canada 
• Changes in the VOS Database: 3rd Quarter 2001 
• SVO Activity
• SVO Lost Office On September 11th But Did Not Destroy Operation

Due to the loss of the SVO office space in the events of September 11, 2001, the SVO Research Newsletter publication production was involuntarily interrupted. There are no issues available for August - October 2001.

July 2001 [PDF]*

Table of Contents

• Corporate Bond Defaults: Mid-Year Update
• From the Director
• Introduction to Equity Linked Notes
• What's an Industry? The North American Industry Classification System
• SVO Activity

June 2001 [PDF]*

Table of Contents

• Insurer Investment in Provisionally Exempt Bonds
• From the Director
• Convertible Bonds in Demand
• Insurer Investment in Catastrophe Bonds in 2000
• SVO Activity

May 2001 [PDF]*

Table of Contents

• Introduction to Credit–Linked Notes
• From the Director
• Insurer Investment in Foreign Sovereign Securities
• SVO Activity
• Changes in the VOS Database from Year–End 2000 to Q1 2001

April 2001 [PDF] *

Table of Contents

• Preferred Creditor Status of Multilateral Development Banks
• From the Director
• Changes in the VOS Database 1999 – 2000
• Debt–Equity Guidelines and The “Classification of Securities” Function of the SVO
• SVO Activity
• SVO Subscription Form

February 2001 [PDF] *

Table of Contents

• Insurer Investment in Problem California Utility Bonds
• From the Director
• Credit Derivatives
• When Prizes and Settlements Become Securities
• SVO Activity

January 2001 [PDF] *

Table of Contents

• Filing Exemption for Certain Securities in Place
• From the Director
• Corporate Bond Defaults at Record High
• 1999 Holdings of 5* and 6* Securities as Reported
• Education and Training Programs Available for Insurance Regulators