As the end-of-August slump begins engulfing Wall Street, many asset-backed players go on vacation - a seasonal flight that is even more pervasive this year.

New York-based investment banks, particularly those in midtown, are bracing for the heavy security and commuting headaches expected when the Republican National Convention takes over Madison Square Garden from Aug. 30 to Sept. 2.

Several firms are temporarily relocating at least some employees to backup facilities, including midtowners like Morgan Stanley, Barclays Capital and BNP Paribas.

But at most firms, telecommuting and vacations are the more popular options for dealing with the convention.

"A lot of people are just choosing to take that week off, either arranging vacation or business travel," said an ABS executive at a midtown investment bank. "Something like 50 percent of the office is going to be out that week."

All the bankers said their biggest concern is transportation, rather than the threat of terrorism.

But at least one ABS player who said he would be in the office scoffed at the vacation excuse. "They're telling you they're taking vacation, but they're running away," he said. "People are afraid."

The three rating agencies, all located in downtown Manhattan, say it will be business as usual for them. Spokespeople for Standard & Poor's and Moody's Investors Service also mentioned that late August is traditionally one of the slower periods of the year for the asset-backed market, with many people already taking vacation.

The McGraw-Hill Companies, S&P's midtown-headquartered parent, sent an internal memo encouraging employees to telecommute or temporarily work from other offices away from the convention site.

Its midtown office is within the security perimeter for the convention.

As part of the city's safety plan, company ID cards will be required for any workers passing through a perimeter checkpoint. City officials are still deciding whether to require additional entry passes for area employees during the convention.

Despite the thinned ranks and temporary relocations, investment banks are also expecting business as usual. They said no disruption would be apparent to clients, with all the same phone numbers remaining in effect.

"If a phone call were to bounce over to another facility, it is not something a client would necessarily notice," said Karina Byrne, a spokeswoman for Barclays Capital.

Byrne said at least some employees from all parts of the company - sales, trading and operations - will be assigned to work from an undisclosed backup location.

In addition, those who live closer to that facility will be given the option to avoid the commute to the midtown office, she said.

She did not know how many of the workers at the backup location might be from the securitization group.

BNP Paribas set up a similar plan. "We will be operating in a business- as-usual mode, but we have also made arrangements to have a small number of key critical business functions to operate from an alternate location," said spokeswoman Edwina Frawley.

She said the temporarily relocated positions span the front, middle and back offices.

"Many of our front-office staff live in New York City so the commuting headaches are not really a factor," Frawley added. "It's more to ensure business transparency in the event of a disruption."

Several sources also said Morgan Stanley will have many employees working from its backup location outside the city. One source reported that Morgan Stanley is looking at the convention as an opportunity for a test run for the recently opened facility. But the company's designated spokesperson for the topic did not return calls seeking comment.

Copyright 2004 Thomson Media Inc. All Rights Reserved.

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