Last week Black Diamond Capital Management joined the growing list of U.S. firms looking for opportunities in the burgeoning European leveraged loan market. The firm announced it hired Peter Cannon as a managing director of its new European shop, Black Diamond GB, which will open June 1. Cannon most recently worked as a senior portfolio manager at RMF Investment Management (a subsidiary of Man Group), where he played a key role developing the firm's CDO business. He has also worked as a senior fund manager for Merrill Lynch Investment Management and as director of acquisition finance at Lloyds TSB. "We see the leveraged loan market in Europe as very robust with excellent growth prospects for us, and we believe that Peter Cannon is uniquely qualified to help us take our presence there to the next level," said Bill Bokos, senior managing director of Black Diamond, an alternative asset management firm with about $8 billion in assets under management. "We expect to be adding staff to build-out our effort in London in the near-term future."
Wells Fargo named John Gibbons to the new position of head of capital markets, which includes all loan sale, securitization and hedging activities, for the firm's residential real estate-secured lending businesses in its home and consumer finance group. Gibbons will report to Mike Heid, division president for Wells Fargo Home Mortgage. Prior to joining the company, Gibbons served as senior consultant with Hollister LLC and vice chairman and strategist at Overture Corp.
Cohen Bros. & Co. hired Ralph Nacey, formerly a director and head of structured ABS derivative trading at Merrill Lynch, and Eric Phillips, also previously from Merrill as vice president. Both new hires, who were responsible for trading structured credit products backed by ABS at Merrill, are joining the capital markets team at Cohen Bros. & Co. They will be reuniting with their former supervisor, Cohen Bros. & Co. CEO Chris Ricciardi as well as former colleagues Head of Capital Markets Lars Norell and Head of CDO Analytics Steve D'Agostino. Nacey and Phillips were part of the team that joined Ricciardi at Merrill from Credit Suisse in 2003.
Citigroup recruited Michael Raynes to run its global structured credit products business, and he will be based in New York. Previously, Raynes was co-head of Deutsche Bank's securitized products group in New York, along with Richard D'Albert.
XL Capital Assurance U.K. Limited (XLCA-UK) appointed Jas Jalaf as a director in its European CDO Group. Jalaf will be based in London and joins the group from CIBC World Markets asset securitization group.
Scottish Re, a global provider of life reinsurance, is planning to launch another series of asset-backed securities through a new vehicle called Ballantyne Re. The first deal from that new issuer is expected to total $2.1 billion. Incorporated and registered in Ireland, Ballantyne Re will take over a portion of reinsurance agreements that Scottish Re acquired from Security Life of Denver Insurance Co. The trust will also issue notes to finance Scottish Re's excess reserve requirements under Regulation XXX. The statutory requirements are generally considered as very conservative, and result in the company putting away very high reserve levels. Preliminary ratings from Fitch Ratings range from double-A to triple-A.
The Mills Corp. refinanced a $286 million loan on the Sawgrass Mills, a 2.3 million-square-foot shopping mall in Fort Lauderdale, Fla., with a $625 million mortgage from JPMorgan, plus $74 million in mezzanine financing. Last week, the real estate investment trust defeased the loan with U.S. government securities, resulting in a ratings upgrade from Moody's Investors Service.
Spain is looking to amend mortgage regulations in that country, and approve them this summer. The new rules are aimed to protect borrowers against unfair and excessive costs when repaying mortgage loans. These will also ensure that customers are offered clearer information about the risks of increases in floating mortgage rates as well as introduce new regulations for equity release products. The Spanish government hopes to promote mortgage loans by offering both fixed and floating mortgage rates that cater to borrower needs in a rising interest rate environment. Market reports indicate that currently about 85% of Spanish mortgage loans are floating rate products.
Fitch Ratings last week launched its criteria for rating European residual value auto ABS. The new criteria should help the market and its participants to better assess potential residual value securitization and to tap the available issuance volume, said Fitch analysts.
Last week GSC Partners announced that it has completed fundraising for its second European mezzanine fund, GSC European Mezzanine Fund II, which will invest in more than 1 billion in capital. The new fund, GSC said in a statement, will provide subordinated debt to sponsors looking for financing to back European transactions.
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