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As its presence in the ABS market is expected to grow this year, Banc of America Securities has restructured its asset-backed syndicate and trading operations, effective at the start January, sources confirmed. In addition to consolidating the syndicate group to include Pat Beranek, who formerly worked on the high-grade debt syndicate but also handled consumer ABS, former ABS traders D.J. Baudhin and Jill Smiley have moved off the desk and are now trading high-grade debt.

Christopher Hentemann, who had previously run the mortgage syndicate is now in charge of the entire ABS/MBS syndicate/trading operations, working with Beranek and Chris Springer. With Hentemann on the secondary trading side is Rob Karr, a former Prudential pro, who began at BofA in 2001 and Alex Cha. For both, this is a continuation of their previous roles.

News

Investment advisor, OUB Asset Management, likely bought a major chunk of David L. Babson's new $300 million arbitrage cashflow high-yield bond CDO (85% high-yield/15% leverage loans), which may explain why the XLCA-wrapped triple-A senior notes are the only bonds visibly for sale, according to investor sources.

Citibank/Salomon Smith Barney will underwrite the new issue. OUB AM, a wholly owned subsidiary of Singapore-based Overseas Bank Ltd, is said to be a major buyer of CDO mezzanine debt and equity.

Northern Rock is planning to launch a GBP1.5 billion equivalent RMBS transaction from its Granite master trust in March, market sources confirmed.

The UK mortgage bank has rotated the leads on the deal, bringing in Merrill Lynch and Lehman Brothers in place of Schroder Salomon Smith Barney, which led its last deal. The SEC-registered issue will target primarily the U.S. market but includes for the first time a euro tranche as well as a sterling denominated portion.

Commonwealth Bank of Australia has filed an S-3 shelf registration for its Medallion Trust issuance vehicle, earmarking $4 billion of Australian-originated MBS for sale at an unspecified future date. Although no underwriter was named in connection with the offering, Citibank/Salomon handled the issuer's most recent global offering, $1.7 billion of 2001-1G paper, which priced in April 2001.

Mexico's Senate approved President Vicente Fox's proposal to create a much-anticipated government-sponsored entity (GSE) called Sociedad Hipotecaria Federal (SHF). The GSE will be similar to a U.S. Fannie Mae or Freddie Mac (see ASR 5/21/01).

While the report regarding the GSE is expected to be out this week, the main objective of SHF is to increase the supply for low and medium-income Mexican households through the securitization of mortgages to increase the supply of mortgage-backed securities in the local market. According to Moody's Investors Service, the GSE will likely boost MBS deals to new levels this year.

Ratings

Moody's Investors Service has downgraded two Argentine mortgage transactions, BACS I and BHN IV to Ba3 from Baa2, and both are on review for another possible downgrade. The rating changes not only followed the devaluation of the Argentine Peso, but it also came on the heals of the Congress's approval of a law that provides the Argentine President with extensive powers over the exchange rate regime; the banking system; public debt; the labor code; domestic prices; utility tariffs and oil taxes. Market sources had previously predicted that existing mortgage transactions would likely feel the brunt of a devaluation.

Calendar

Feb. 6-9: Phoenix, Arizona Information Management Network will host the seventh annual investors' and issuers' summit on Asset Securitization 2002. For more information visit www.imn.org.

Feb. 10-13: Scottsdale, Arizona The Strategic Research Institute will host the ninth annual Asset Securitization 2002 symposium, an investor and issuer forum. For more information, visit www.srinstitute.com.

Feb. 25-26: New York, New York - Information Management Network will present the fifth CDOs 2002: Brave New World. For more information visit www.imn.org.

March 24-25: Las Vegas, California - Banc of America Securities will host the fourth annual ABS and MBS investor/issuer forum. For more information contact Covell Day at (704) 388-7835 or gmgevents@bankofamerica.com.

May 14-15: Royal Park, Tokyo Japanese Securitization will be hosted by the Information Management Network. For more information, visit www.imn.org.

June 4-6: Barcelona, Spain Information Management Network will host the sixth annual Global Asset Securitization. For detailed information visit www.imn.org.

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