Subprime mortgage lender New Century Financial Corp. tapped Taj Bindra, Washington Mutual's executive vice president of mortgage banking, capital markets and servicing operations to replace Patti Dodge, its chief financial officer. Bindra's new role as CFO of New Century is effective Nov. 15. Dodge announced, following the second quarter, that she planned to leave her post as CFO, in exchange for a position as executive vice president of investor relations at the Irvine, Calif.-based lender. New Century also hired Ralph Melbourne, formerly director of strategic initiatives at Washington Mutual, as senior vice president, consumer direct division for its retail lending subsidiary Home123 Corp.
Bridger Commercial Funding, a mortgage loan and a commercial real estate debt-trading services provider, hired Rhonda McGovern as vice president of originations. In her new role, McGovern will focus on managing the loan origination efforts of Bridger's east coast business from the company's New Jersey office. Bridger CEO Bob Schonefeld said, "Rhonda is well versed in all aspects of CMBS (Commercial Mortgage Backed Securities) origination, underwriting and securitization. She will play a critical role in helping Bridger continue to build its CMBS lending franchise within the banking industry." McGovern has more than eight years of related CMBS experience with industry-known companies such as Deutsche Bank and Eurohypo. The new hire was part of the group that established Eurohypo s CMBS platform in the U.S.
Hedge fund manager Aladdin Capital Management is reportedly launching the firm's first securitization fund. Aladdin is now marketing the $100 million Aladdin New Alternatives Fund currently scheduled to launch at the end of 2006. The fund - which will have a bias for long positions - is set up to invest in a range of securitizations such as CDOs, structured credit, insurance-linked securities as well as future flow deals. Meanwhile, the firm recently hired John Brewer and Tim Goodale from London-based hedge fund Fusion Asset Management to focus on running a new relative value credit fund for Aladdin. Brewer joins the firm as head of European credit trading and Goodale will serve as head of European sales and marketing. The new vehicle, which is set to launch on Wednesday, is expected to build on the fund the pair managed for Fusion.
Dealers have announced Anthracite Europe CRE CDO 2006-1, the 342 million ($436 million) European commercial real estate CDO backed by European real estate assets for BlackRock Financial Management. The portfolio comprises of 39% CMBS and 61% is real estate loans. Morgan Stanley is sole lead manager for Europe's first CRE CDO. The deal is expected in late November.
Moody's Investors Service last week reported a 54% drop in third quarter securitization activity in Japan from the corresponding period in 2005. The agency said it rated 21 transactions totaling 369.2 billion ($3.2 billion) between July and September, compared with 36 deals worth 796.4 billion in the third quarter of 2005. Much of the decrease is attributable to a tail-off in deals by consumer finance companies that have been active issuers since 2000. However, Moody's expects issuance of credit card and consumer finance transactions to recover to previous levels as soon as revisions to the money lending business law and additional industry issues become clear.
Fannie Mae announced last week that it has upgraded its multifamily MBS disclosure. All new and existing information on Multifamily DUS MBS has been consolidated on the new Mutifamily Securities Locator Service located at https://fapt.efanniemae.com/MFSecuritiesLocator/ The new user interface, which has enhanced search and monitoring capabilities, offers a central location for access to Multifamily MBS disclosure information. The upgrades include the ability to create portfolios to monitor specific Fannie Mae Mutilfamily MBS pools without having to perform a new search each time the user enters the system, among other things.
Babson Capital Management's quantitative management group is focusing on two projects that would upgrade its analytics. The team is working on a surveillance platform that would improve the analytical and monitoring process of its ABS CDOs, as well as a credit model development project that would improve in-house ABS and MBS analytics using predictive models, according to Standard and Poor's.
The AVIV LCDO series, brought to market by Lehman Brothers in three separate transactions totaling $1.2 billion, is being credited as possibly the first transaction that uses such cash CDO features as interest coverage and over-collateralization triggers along with a synthetic reference portfolio. The deal is being sold in a full capital structure. A fourth series of the deal is on the way.
The small-business credit card firm Advanta Corp. said its third quarter consolidated earnings rose 447.71% versus a year ago, to $21.1 million. Earnings per share rose 461.5% to 73 cents. Dennis Alter, Advanta's CEO, said in a company release that his firm is still attracting a significant number of new, high quality profitable customers. Advanta ended the quarter with managed receivables of $4.6 billion, increasing 29%, and owned receivables of $1.2 billion, rising 46%, as reported by ASR's sister publication American Banker.
Outdoor clothing and adventure gear retailer Cabela has priced its largest credit-card based deal yet, a $500 million transaction secured by receivables from the Visa cards it issues to customers. The five-year transaction featured a super-senior, fixed-rate piece that will pay investors a 5.26% coupon. Wachovia Securities, which has led each of Cabela's deals since it began issuing paper several years ago, once again acted as lead manager on the recent deal, similar to previous transactions, while JPMorgan Securities acted as co-manager.
Abbey plc plans to offer borrowers that meet certain criteria mortgages equivalent to five times the borrower's salary. Typically, in the U.K., mortgage lenders have stuck with the three and a half times salary multiples. The rationale is that it will aid affordability, particularly for first-time buyers, in an environment in which house price growth is still strong. Fears are being raised over borrowers over-leveraging themselves. Analysts at Dresdner Kleinwort Wasserstein said it's likely that investors will pay close attention to the eligibility criteria of Abbey's forthcoming Holmes XI deal to see whether the lender has permitted the inclusion of these mortgages, given the implications for default probability that they have.
The Isle of Man Treasury's Isle of Man Companies Act 2006 came into effect last week. The Act updates and modernizes the Island's Company Law, by introducing a new simplified corporate vehicle into the Isle of Man Law. It is a development of the international business company (IBC) model, available in a number of other international business centers and is fully in line with recognized benchmarks. The new vehicle is introduced alongside previous Isle of Man Company Legislation (the Companies Acts 1931-2004). Companies formed under the 1931 Act may also convert to the 2006 version in the future if they wish to. The Act has been designed for a range of corporate transactions and is expected to be particularly useful for public offerings, securitizations, and asset and project finance deals. "When combined with the Isle of Man's zero rate tax strategy and the existing benefits which the Island offers through our strong professional infrastructure, the new Act places the Island at the forefront of European domiciles for company structures and servicing," said Allan Bell, Treasury Minister of the Isle of Man.
The Fitch Academic Advisory Board (FAAB) met at the end of October with leading academics to discuss the effectiveness of portfolio risk models in the event of a potential liquidity shock in the economy. Another related topic the group looked at was the role of expected loss mapping for CDO pricing. The board members discussed the benefits and shortcomings of this methodology and proposed some enhancements. The group also looked at how Basel II guidelines have been affecting (and will affect) investment flows as well as the creation of new and innovative financial engineering techniques and instruments. Fitch Group, the parent organization of Fitch Ratings and Algorithmics, formed the FAAB in April of 2006. The purpose was to promote professional interaction between prominent academics, researchers and Fitch Group.
The first index to track the performance of derivatives based on high-yield leveraged loans began trading last Monday after a group of six banks agreed on the list of companies to be included. The index, run by International Index Co., allows investors to trade liquid default swaps on a portfolio of leveraged loans, with pricing provided by Morgan Stanley, Dresdner Kleinwort, Barclays Capital, Lehman Brothers, Deutsche Bank and Credit Suisse. The product will be split into senior and subordinated loan indexes. The senior index comprises 35 equally weighted loan credit default swaps (LCDS) referencing first-lien loans. In the event of a repayment of a loan, the single name contract is cancelled, and any contract written on the index continues against the remaining portfolio.
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