People
Andreas Christopolous and David McNamara are no longer with J.P. Morgan Chase's CMBS team. The departures were said to be merger-related. Christopolous was Chase's director of commercial mortgage research and had worked at the firm since August 1997. McNamara, a CMBS trader, had been with Chase for four and a half years. Market sources said that after the merger of J.P. Morgan and Chase, Christopolous had been offered a position in product management, but really wanted to continue in research-related work. He left the firm last Tuesday. Christopolous has no specific plans but is considering options including buyside, sellside or development consulting work. Brian Baker, head of JPMC's trading desk, declined to comment on the departures.
George Kok, the senior credit officer at Morgan Stanley's CMBS conduit, has left the firm to run Merrill Lynch's conduit operations in the U.S. and Canada. His hiring is part of Merrill's plan to increase its presence in the U.S. conduit business.
MBS veteran Evan Firestone, a prepayment expert, has left Merrill Lynch.
News
Advanta Corp. has said a lawsuit involving FleetBoston Financial Corp. aims to stop the acquisition of Advanta's mortgage unit by Chase Manhattan Mortgage Corp. The case is expected to go to trial late this summer.
Sources say one of Argentina's major oil companies, other than Repsol YPF, is currently in the process of structuring a future-flow transaction.
Anglo Philippine Holdings Corp. and Fil-Estate Corp., have teamed up with Singapore's TBS Kappitel Corp. Pte. Ltd., in a dividend-for-bonds-swap as a new source of funding. The agreement involves the securitization of Anglo Philippine Holdings Corp. and Fil-Estate Corp.'s rights to receive dividends related to their investments in the Metro Rail Transit (MRT) III project. In turn the rights to the dividends will be exchanged for bonds and other instruments issued by TBS.
Eurotunnel returned to the drawing board for the repackaging of nearly GBP900 million of its distressed debt. MBIA's credit wrap for two tranches is the main departure from the previous structure. According to Dresdner Kleinwort Wasserstein and Merrill Lynch, the lead managers, nearly 51% of the single A and 51% of the BBB pieces are now AAA as a result of the credit wrap. There are currently seven classes split among GBP175 million, and EURO360 million for the credit enhanced portions. Both of the triple As have an expected maturity of February 2009 with a 2002/2005 call and legal final of August 2025. The Senior A1 piece amounts to GBP200m while the A2 is EURO100m, both A2/A-. The senior subordinated tranches are B1 GBP70m and B2 EURO100m, rated Baa3/BBB. The sub investment grade C segment amounts to EURO140m of Ba3/BB- rated bonds.
California-based Countrywide Credit Industries Inc. has reported that its January fundings of $6.8 billion represented the highest level of activity in 18 months. Increased refinance activity was the cause. Refis represented 46% of Countrywide's business last month, at $3.1 billion. Furthermore, sources say Countrywide was able to successfully defend its servicing portfolio in a declining rate environment, as fundings exceeded prepayments by $3.8 billion.
Additionally, Massachusetts-based Home Financing Centers Inc. has said its online mortgage applications increased 169% in January compared with those of a year earlier. Offline applications increased during the period by 195%.
Washington-based Overseas Private Investment Corp. (OPIC) has said it will provide a $30 million direct loan to help establish a mortgage loan market in Nicaragua, assisting in the country's effort to address a shortage of middle-income housing. OPIC said it will make the loan to a special-purpose company. The proceeds will be used to refinance mortgages originated by Bancentro in Nicaragua. Bancentro will, in turn, use the liquidity to create mortgages for 300,000-500,000 middle-income homes in Nicaragua's capital of Managua. The cost of the project is about $39 million.
Residential Funding Corp. has launched an Internet portal that provides real-time access to performance data on GMAC-RFC mortgage-backed and asset-backed securities. The Investor Internet Portal offers monthly transaction, collateral, and historical performance information, as well as remittance statements, prospectus supplements, pooling and servicing agreements, issuance volumes, and downloadable data files at the transaction, class, and loan levels, the company said.
America's Senior Financial Service has announced the addition of a mortgage-servicing platform to its operations. Frank Donahue has joined America's Senior's mortgage production company, Jupiter Mortgage, and will manage the servicing platform and personally market certain private placement and specialty mortgages. Previously, Donahue was the president of Private Money Mortgage.
More than three million home loans are now registered on the electronic registry for tracking ownership of loans and servicing rights. Mortgage Electronic Registration Systems (MERS) said it reached the three-million-loan milestone on Jan. 31. Daily registration volume is now averaging about 6,000 per day. GMAC Mortgage converted its retail and wholesale channels to MERS on Feb. 1 and as a result, registration is expected to increase. Additionally, Washington Mutual and ABN Amro are working with MERS to integrate their correspondent channels.
Standard & Poor's has announced that it has received several inquiries from investors interested in Russia and other states of the former Soviet Union. In particular, investors seem to be interested in the rating possibilities for future-flow export receivable transactions, involving issuers from these nations. Sovereign risk and the lack of well-developed legal systems conducive to securitizations in these states has hindered the completion of transactions thus far.
Ratings
Fitch has recently announced that it has downgraded four classes of GE Capital Mortgage Services Inc.'s home equity loan pass-through certificates. Class B1 of Series 1996-HE4 and Class B1 of Series 1997-HE1 were downgraded to BB from BBB-minus, Class B2 of Series 1997-HE1 was downgraded from to D from CCC, and Class B2 of Series 1997-HE2 was downgraded to B from BB. Additionally, Fitch said that Class B1 of Series 1997-HE2 has been placed on Rating Watch Negative, and the B1 classes of Series 1996-HE4 and Series 1997-HE1 will also remain on Rating Watch Negative. The rating actions reflect the likelihood of loss to the affected classes given their performance to date and the amount of loans that are delinquent more than 90 days, in foreclosure, or in real estate owned.
Fitch has downgraded one class of a residential mortgage-backed securitization and placed three such classes on Rating Watch Negative. Class B3 of BCF 1997-R1 was downgraded to BB from BBB and placed on Rating Watch Negative. Class B3 of BCF 1997-R3 was also placed on watch. Additionally, Class B3 of Ocwen Residential MBS Corp.'s Series 1998-R3 was placed on Rating Watch Negative. The actions are a result of a review of loss levels in the deals and the high delinquencies relative to applicable credit support levels.
