Following the recent hire of ABS professionals from Banc of America Securities, crosstown rival First Union Securities Inc. plans to be aggressive in leading new issues in the auto-loan and credit card sectors, aspiring to finish the year among the top 10 underwriters of auto-loan ABS and taking on more lead-managing roles in credit card transactions.
According to Bennett Cole, managing director and senior vice president of asset securitization origination for First Union, the firm, which is already a player in the home-equity and equipment lease markets, intends to leverage the skill sets of its recently acquired BofA talent to boost its league-table presence in the auto sector.
Former BofA banker Curt Sidden, for instance, was hired as director of consumer ABS origination by First Union, bringing with him longstanding relationships with captive auto-finance companies - firms that make up one of the largest sectors of the ABS market. Sidden also brought a highly regarded team of professionals who defected with him .
Joining Sidden in the banking operations at First Union as vice presidents are Chad Kobos and Steve Ellis, who provide quantitative analysis support. Also, Ryan Jackson and Jay Brinkley have been added to the ABS research team.
First Union is slated to lead primary offerings from mid-to-small sized captive and independent auto lenders, such as Isuzu, which Cole cited as a good example of the type of issuer Sidden was hired to target, with a concentration on non- and near-prime lenders. "We can be most competitive in that segment of the market," Cole said.
Already this year the bank has stuck to that plan, leading deals from Carmax and World Omni in addition to the previously mentioned Isuzu deal, for a total of approximately $2.7 billion.
"Initially I will focus on a select group of (issuer) clients, existing relationships," said Sidden, adding he was also working with some first-time issuers.
Under Sidden's guidance, BofA was the fourth-leading underwriter of auto loan-backed ABS in 2000, having brought $7.6 billion of paper to market, according to Thomson Financial. So far in 2001, BofA is also in fourth with just over $4.4 billion sold.
By contrast, First Union had brought $1.29 billion of auto loan-backed paper to market in 2000, 10th place in the sector. Already this year First Union had led the sale of $1.429 billion of auto loan paper, in eighth place among auto underwriters, according to Thomson Financial.
In the long run, look for the bank to get involved in the credit card sector within the next 12 to 18 months, initially as a co-manager but "there are a couple of lead roles in the works," officials said. First Union was lead manager on the most recent credit card deal from American Express - $725 million of five-year paper - which priced jointly via First Union and JP Morgan.
