Advisory service firm AgFe, set up by former Morgan Stanley employees, is looking to place a €820 million ($1.38 million) bid list on behalf of either the European Central Bank (ECB) or the Bundesbank, according to market reports.
The bid list features Dutch nonconforming RMBS deals originated by Lehman Brothers subsidiaries and structured when the European ABS market had already collapsed. The bonds were repoed with the ECB by Lehman prior to going bankrupt.
"This sale will be a 'test' to quantify the implicit cost borne by central banks for providing liquidity,” UniCredit analysts said. “We also expect to see more sales as Lehman was not the only bank that defaulted after pledging collateral to repo facilities with the ECB."
Lehman originated many deals outside of the Netherlands. There are also quite a few other struggling banks that have relied on the ECB's repo operations, such as DEPFA and Dexia.
AgFe’s founder and CEO is Paul Rolles, formerly head of Morgan Stanley's European financial ABS group. AgFe's CFO, Holdger Beyer, was a previous executive director in Morgan Stanley's European securitization and asset monetization group. Brent Williams, who deals with central banks, was a former head of Morgan Stanley's European residential mortgage business.