People
Brad Schwartz has been named the head of JPMorgan's ABCP conduit business, taking the position over fully following the defection of former co-head Robert Jones to Royal Bank of Canada. (see story p.1)
Schwartz, a managing director, is a 12-year veteran of the firm, initially hired by Manufacturer's Hanover. He will continue to report to Michael Malter and Blythe Masters, joint heads of the company's North American asset-backed securities group.
The Bond Market Association (BMA) has appointed Robert E. Fry as director of fixed-income operations, legal and regulatory department. In his new post, Fry will be charged with coordinating divisional input on a broad range of securities operations, trade processing, clearance and settlement issues and initiatives affecting the Association's members. He will also give direct staff support to the Association's Mortgage-and Asset-backed Securities Division.
Before this appointment, Fry was formerly director of capital markets at Ginnie Mae responsible for coordinating the migration of settlements of Ginnie Mae securities from The Depository Trust & Clearing Corporation (DTCC) to the Federal Reserve Bank.
News
Despite the current situation in Argentina, there is a $100 million future flow export-receivables deal expected to launch next month. While it is unclear if the deal will be rated, it has already been provided with a surety bond. West LB is arranging the transaction and it is unknown if the deal will be rated. As of last year, there were 166 deals for $120.21 billion.
Excluding credit default swaps, there were 70 deals for $24.65 billion in the first half, compared with 55 deals for $23.88 billion for the same period last year. At $11.79 billion, proceeds from arbitrage cash CDOs have more doubled last year's $5 billion at during the first six months. Balance sheet CLOs, however, dropped off to $3.41 billion from $9.92 billion.
Halifax plc is preparing to launch into the ABS market and plans to design a Master Trust structure similar to its predecessor, Abbey National's Holmes. Its initiation in the ABS market is cheered by reports that U.K.-based Master Trust programs have reached $16 billion in total issuance since 2000, accounting for more than half of the $27 billion total of U.K. RMBS issued in that time frame. "We are looking at securitization as an option and should have something in place by the end of summer," said a Halifax spokesman.
Miscellaneous
By Standard & Poor's count, there were 93 CDOs issued globally in the first half, excluding market value deals, for approximately $46.2 billion in proceeds. In all
It appears the trend of distressed debt CDOs is continuing to catch-on and Highland Capital is getting into the game, according to market sources. Highland currently has $8.3 billion in assets under management consisting of leveraged loans, high-yield bonds, and distressed securities, respectively. In addition to the distressed debt CDO underway, Highland is understood to be working on its next high-yield CLO. Highland priced its fifth CLO, Highland V, last week via Salomon Smith Barney at 43 basis points over three month Libor (8-year A/L), which settles on August 1, 2001. (IFR Mortgage Data)
Morgan Stanley London is understood to be working on a CDO secured by a pool of convertible bonds called Cheyne II.
Clarification
Responding to an article that appeared in last week's ASR, TFC Enterprises raised concerns about an analyst dubbing its warehouse facility with West LB "stop-gap" funding.
"The WestLB facility was step-one in replacing the company's primary lender, who announced in December 2000 that they were exiting this market," said TFC's Chief Executive Officer Robert Raley. "The company is currently under negotiations with several other lenders to complete the replacement of its primary line."
Although Raley would not disclose the name of its previous primary lender, it is understood that GE Capital was providing TFC with financing before exiting the market.
