After a recent hiring binge, HSBC is outfitted to make its mark in term ABS.
As of now, the U.S. ABS group is comprised of the following senior members: Jon Bottorff, managing director and global head of structured capital markets and ABS; Michael Normile, managing director and head of term asset-backed securities; Robert DiOrio, managing director and head of real estate securitizations; Alice Koo, senior vice president and head of ABS product management; Cyrus Moehbbi, managing director and head of ABS analytics and structuring; Caroline Morrill, managing director and head of ABS syndicate; Jeffrey Moses, managing director and head of transportation and equipment securitization; and George Smith, managing director and head of ABS trading.
"Home equities and autos will be our initial focus, and we will soon be following that up with classic credit card and student loans as well," Bottorff said. "This reflects what we think will be an active issue type of our affiliate [Household International] as well as our appetite for supporting our existing client base within the commercial and institutional banking area and our financial institution client base."
HSBC currently has a number of auto clients with distribution requirements which HSBC plans to support. Bottorff also plans to expand the home equity client base. "As nearly 50% of the ABS market is home equity, you really can't be a significant player in the term ABS market without having a good presence on the home equity side."
HSBC's scope will not be limited to the frequent issue asset classes. Depending on the financing needs of its clients, the bank intends to go after some of the low volume, higher-margin transactions as well, such as future flow backed deals, Bottorff said.
HSBC also will shore up its international team (see HSBC, in Asia, p.1). "A lot of our origination is focused in North America, but our distribution and trading is more globally focused."
Meanwhile, the group remains committed to its established conduit business. "The conduit effort and the term ABS effort will be of equal importance," Bottorff said. "We will continue to focus on serving our client financing needs through ABCP conduit transactions."
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