Wells Fargo Corporate Trust's expanded CDO operation was approved last week by the ratings agencies, allowing the firm to act beyond a trustee, but also as a collateral agent and/or portfolio administrator.
Before the ratings agencies will rate a collateralized debt obligation, they need to approve the trustee, assuring that the systems, people, processes and procedures are all in place. By the end of last week both Standard & Poor's Ratings Services and Moody's Investors Service had given Wells Fargo the okay.
In addition to leveraging off its existing asset-backed securities and mortgage-backed securities platforms, Wells Fargo added 10 people dedicated to the CDO team, said Bill Milbauer, the group's co-head.
"One thing we have going for us is the level of respect people have for our customer service," Milbauer said. "And just the idea of bringing that to the CDO marketplace was very intriguing to everyone we talked to."
With added reporting and transaction modeling capabilities - including Web-based scenario testing - Wells Fargo will be able to compete with services such as iCDO, which has features such as compliance test projections (see story ASR 10/9/00).
"As part of the process, we looked at all of the software that's out there," Milbauer said. "But before looking at these systems, we really did a lot research with all the various market participants, and asked them, What do you want to see from your provider?'"
Among other features, Wells Fargo is offering downloadable Excel spreadsheet and comma delimited data. The company boasts it can facilitate improved trade decisions by offering improved portfolio data, improved reporting and improved customer service.
Wells Fargo currently has three CDOs in its line-up: one high yield, one CMBS/MBS, and one backed by syndicated loans.