People
Randy Harrison is now a Director in Salomon Smith Barney's ABCP unit. Harrison was a vice president at Goldman Sachs until recently, and had been at the firm for 13-and-a-half years.
Harrison said he was excited about the opportunity to join Salomon's ABCP business. His new role at Salomon will be similar to his position at Goldman, where he focused mainly on ABCP issuers and origination. Harrison joins a solid ABCP team at Salomon Smith Barney, which consists of Allisen Wolever, Lisa Caesar, Frank Pertusello, as well as Sarah Peavey and Lily Tang in the ABCP-related investor marketing division.
Greg Medcraft has become the global head of securitization at Societe Generale (SG Cowen). He will be overseeing all of the securitization groups, including the CDO and CMBS units.
SG Cowen's team consists of European, American and Asian securitization units. The European team is made up of Alan Cameron and J.F. Despoux, who head up ABS, ABCP and CMBS, H. Le Liepvre, who covers CDOs/structured credit, and a structured credit derivatives trading team.
In the Americas, Marty Finan is the head of credit structures/ABCP, Tom McDevitt will be handling CMBS, and Barry Wood will be covering ABS. Brad Summers is heading up the strategic securitization unit, and Lisa Underwood is the head of the CDO/structured credit derivatives unit. The head of global structured credit derivatives trading is A. Mascia. J. Chauvel, Andy Lai and Rion Sato round out SG's Asian/Australian team.
News
American Express announced that it will acquire SierraCities.com for $107.5 million. Late last year SierraCities backed out of a merger with VerticalNet, when VerticalNet's stock value fell below an agreed upon threshold.
SierraCities would bring to Amex a $1.5 billion portfolio of managed receivables.
Wachovia Securities has indicated that it will exit the credit card business, and sell off its $8 billion portfolio of prime card receivables.
An analyst at First Union Securities believes that Providian Bank will be the suitor of the portfolio, based on fundamentals. "Wachovia would increase Providian's concentration of prime assets, lower charge-offs, and ultimately could create multiple expansion," the analyst stated in an investment opinion.
The relatively long awaited $234 million transaction involving the Argentine province of Salta royalty-backed deal finally closed last week (ASR 2/5/01 p.26). The oil and gas-backed future flow deal rated triple-B-minus or the equivalent by all three rating agencies, Standard & Poor's, Moody's Investors Service and Fitch. However, Fitch has also placed the deal on CreditWatch negative.
Moody's Investors Service is predicting that asset-backed securities to be the backbone of the Portuguese structured finance market in 2001, as it was in prior years. Uncertainty remains regarding the development of new issuance volume that dropped to Euro 762 million of total term deal issuance in 2000 after the impressive Euro 1.4 billion achieved in 1999.
Telefonos de Mexico SA de CV (Telmex) has approved the increase of it's share repurchase reserve by $1 billion. While this move is generally perceived as a negative to credit quality and financial flexibility, Standard & Poor's has said believes it will have no bearing on the company's credit rating or outlook.
Moody's Investors Service will be launching a new mortgage model by the end of the first quarter. The model will be a loan-by-loan evaluation of credit risk and will provide greater transparency for issuers, and will help lenders see the effects of credit enhancements. While Moody's is not the first rating agency to have the product, response to the new model is expected to be very positive.
Fitch is going to start rating structured finance trustees, mainly in response to investor requests for such ratings. Stephanie Petosa will be rating trustees for CMBS, Mary Kelsch will be rating residential mortgage trustees, and Said Rafat will be focused on ABS. Especially for CMBS, trustee issues such as missing documentation, miscalculations in bond payments and inconsistencies in reporting have led to a need for trustee ratings. "This is something that we had the capability and background to do, and it will be beneficial to the market," said Fitch's Petosa.
Ratings
Standard & Poor's has assigned a national rating of mxAA to the city Juarez, Chihuahua, Mexico and the outlook is stable. The rating reflects a strong local economy with one of the lowest unemployment rates in all of Mexico; strong trade relations with the U.S.; a well managed budget; good financial performance; the ability for capital improvement; and manageable debt levels.
Standard & Poor's has assigned Apasco SA de CV, Mexico's second largest cement and ready mix concrete company with a national scale rating of mxAAA. The rating reflects the increased demand for cement in Mexico and the favorable pricing environment in that market.
Standard & Poor's has affirmed the B+ rating of the senior unsecured debt from the Argentine-based manufacturer of hydromechanical equipment and cranes, Industrias Metalurgicas Pescarmona S.A.I.C.Y.F. (IMPSA), and has also removed it from CreditWatch negative where it was placed last spring. The rating action comes on the heels of the closing of the Caliraya-Botocan-Kalayaan (CBK) Power Project, which constitutes about 47% of the company's backlog as of December 2000.
