With Thomson Financial selling its ratings unit, BankWatch, to the Fimalac, the parent company of Fitch, the asset-backed market is back down to three ratings agencies, which has a lot of players on edge.

Norman Last, who was brought on to BankWatch earlier this year to spearhead an asset-backed ratings team, reportedly won't be making the move to Fitch, but will be pursuing other opportunities.

In fact, sources indicated that Moody's Investors Service is looking to hire Last, in line with the agency's effort to capture the true-private market share left open when Duff & Phelp Credit Ratings Co. was swallowed up by Fimalac back in March.

One recruiter even suggested Last could be brought on to fill the position left vacant by Maureen Coen, who left Moody's as a managing director to join Credit Suisse First Boston's asset-backed commercial paper group.

However, Moody's seems to have already done an internal shuffle, naming Michael Kanef as a managing director in the asset finance group.

Prior to BankWatch, Last headed up the asset-backed ratings group at Duff and Phelps.

As for Fitch's acquiring BankWatch, market players were overwhelmingly disappointed. It is said that Fitch will incorporate whatever is left of the existing BankWatch ratings group into its own groups.

"That's a definite shame for the market," said Warren Kornfeld, director of asset-backed securities at William Blair & Co. "Unfortunately, in terms of the ABS side [of the Thomson effort], it was somewhat of a slow go, and part of that was the limited resources that Norman was being given, and now it's apparent as to why he was given limited resources."

According to an insider, Thomson had deals in the queue, and it's unclear at this point whether or not Fitch intends to rate them.

On the other hand, Moody's has indicated an intention to look at more structurally diverse, true private placements. Moody's rated the recent National Century Financial Enterprises, which marks the first time the agency has participated in a medical receivables transaction.

"Moody's is doing a good job so far," Kornfeld said. "They're really trying. Nonetheless, I think everybody in the market would like to see another rating agency, to give the market an alternative."

Moody's recently brought on Chris Donnelly and Kieran McShane, both formerly of Duff & Phelps, and both said to be focusing on privates.

Kornfeld named two Moody's-rated true privates that closed in September: Frontier Leasing, a $35 million equipment leasing deal managed by William Blair, and CenterPoint Financial's CFS Funding, a $35 million equipment leasing deal placed by Hanifen Imhoff.

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