UBS has made reappointments for several of its managing directors on its global fixed-income management team. In New York City, the investment bank appointed Mostafiz Shahmohammed as head of the credit ABS business. Since Shahmohammed vacated his post as head of UBS's transportation finance business, the bank placed Cecilia Park in that role. Shahid Quraishi is now the global head of the bank's ABS business, and reports to David Martin, who was put in charge of the bank's global rates business. Martin was head of mortgage- and asset-backed securities. In Stamford, Conn., Simeon Schwartz, former head of the bank's rates business, has become global head of structured products for UBS. He reports to Simon Bunce, UBS's London-based global head of fixed income.
Citigroup Global Markets appointed Pascal Bernous as a vice president in its European securitization business. Previously, at Standard & Poor's, Bernous focused on corporate and infrastructure debt. At Citigroup, he reports to Simon Dudley, a managing director in the bank's fixed income, currencies and commodities divisions. Bernous will be working in the structuring, financing and distribution team that focuses on European infrastructure and corporate/whole business securitization transactions.
Subprime lender WMC Mortgage's former Chief Executive Amy Brandt has surfaced as the CEO behind a new record label called "I AM: WOLFPACK." Brandt left WMC in November. There was no word at press time as to whether Brandt's new record label may consider signing the Xceptions, of which Ray McKewon, former chief executive of subprime lender Accredited Home Lenders, is a member.
Stephen Donnarumma won a promotion to chief credit officer of Assured Guaranty Corp. Donnarumma, who was managing director of Assured Guaranty's mortgage-and asset-backed securities group, joined the company13 years ago and has held several top executive positions at Assured Guaranty. He was chief underwriting officer and COO of the Assured Guaranty Mortgage Insurance Co., plus COO of Assured Guaranty Re., Ltd and chief risk officer of Assured Guaranty Corp. Before joining Assured, he was a vice president of structured finance at Financial Guaranty Insurance Co. In his latest role, he reports to Howard Albert, chief credit officer of Assured Guaranty Ltd.
GSC Partners raised $350 million for its latest CDO fund, the GSC Group CDO VIII. The CLO transaction will primarily invest in a diversified portfolio of broadly syndicated bank and middle market loans. Priced with Citigroup Global Markets, the transaction completed 80% of its ramp-up at press time. GSC's Collateralized Corporate Debt Group, which manages about $6.7 billion in CDO/CLO assets, will manage the new fund.
Barclays Global Investors recruited Marie Chandoha as head of its U.S. fixed income business. Chandoha replaces Brian Zalaznick, formerly interim head of the U.S. fixed income business, who will become head of Barclays Global's fixed income structuring, which includes the firm's CDO business. Working from San Francisco, Chandoha will drive product strategy and distribution of the U.S. Fixed Income product offering across Barclays Global's platform. Chandoha joined Barclays Global from Wells Capital Management, where she served as co-head and senior portfolio manager of the Montgomery Fixed Income division. Before that, she was a senior bond strategist at Goldman Sachs, and a managing director in Credit Suisse First Boston's global fixed-income research group. Chandoha reports to Peter Knez, the CIO and global head of fixed income for Barclays Global Investors.
Luminent Mortgage Capital completed its first CDO, a $400 million securitization of mezzanine residential mortgage-backed securities called Charles Fort CDO I, on which RBS Greenwich Capital acted as lead manager. The transaction is expected to be the first of what will most likely become a regular CDO issuance program for Luminent, said Joseph Kuriger, senior vice president and liability manager for the San Francisco-based mortgage investor. The triple-A rated A-1 tranche of the deal with a 3.8-year WAL priced at 55 basis points over three-month Libor, while the triple-B rated D-2 tranche of the deal with a 4.7-year WAL priced at 725 basis points over.
Fitch Ratings published a new rating methodology for European SME CDO transactions and launched its new rating tool, Fitch Default VECTOR SME Model. VECTOR SME will be the primary quantitative tool in the agency's analysis for European SME CDO transactions. According to Fitch analysts, it is the first time a simulation approach is applied to SME CDO portfolios. Inputs into VECTOR SME are so flexible, that the user can overwrite Fitch's assumptions. To accommodate different ways of deriving each borrower's probability of default (PD), VECTOR SME is able to process PD inputs as well as Fitch equivalent rating inputs. VECTOR SME will form the cornerstone of Fitch's European SME CDO analysis.
Standard & Poor's upgraded the Class A, B, C and D notes of HOTELoC to AAA' from AA'/'AA'/'BBB'/'B' now that the final disposal of the remaining 28 hotels securing the (defaulted) underlying loan has now been completed for a net GBP386 million. The Class E notes remain at CC' Watch Negative. The sale's proceeds are sufficient to fully cash collateralize Classes A through D and guarantee full repayment of principal on their legal final maturity date in May 2007, thereby supporting the upgrades. Insufficient cash is available to repay Class E noteholders in full and the actual shortfall will be disclosed once all outstanding costs have been identified. Market analysts said that the transaction serves as a reminder that covenants on property disposal may cause significant problems, with the notes in this case being less than two months from default when the disposal took place.
The American Securitization Forum filed a comment letter last Monday on Basel II implementation. Most of the comment was focused on the proposed rule's capital adequacy framework as it relates to ABCP programs. In the letter, the ASF said, "The fact that a bank is exposed through a conduit rather than direct ownership does not seem to provide an economic reason for treating the two situations differently." The other part of the letter focuses on Basel II's effect on term securitizations, which would likely affect credit card deals the most. "The various constituencies from the different asset classes were involved in the drafting of this letter beginning in September last year," said Tom Deutsch, associate director at the ASF. He added that there are concerns in the industry that U.S. competitiveness in the capital markets could be affected if U.S. implementation of the new rule lagged behind its adoption in the European markets, which is currently happening.
The House Financial Services Committee last Thursday passed the Housing Reform Act of 2007 (H.R. 1427) by a vote of 45 to 19. The bill would provide for an independent regulator of the GSEs, create an Affordable Housing Fund to support rental housing and homeownership for very low-and low-income families. The proposed regulation would also raise the conforming loan limit balance. The next step was to send the bill to the House of Representatives for a vote. If it clears that hurdle, it's on to the Senate for a vote. Once it passes through the Senate, President George W. Bush could then be sign it into law. Opposition is expected as opponents have sought even stricter oversight and may look to alter the language of the existing bill.
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