News

Private equity investment firm Texas Pacific Group and Goldman Sachs Group Inc., are allegedly considering using ABS to finance their joint $2.5 billion bid for the Burger King franchise company. The possible ABS deal would be in the $2 billion range, and would be backed by future revenues generated by more than 1,000 Burger King franchises.

Burger King is being auctioned off by its current owner, Diageo Plc, and a number of top private equity firms are bidding for it, including Bain Capital and the Blackstone Group. Texas Pacific is considered the frontrunner to win the deal, as Burger King franchisees have been working with Texas Pacific for over a year to mount the LBO, and Burger King's Chief Executive Officer John Dasburg has ties with Texas Pacific's top management. Goldman and Texas Pacific have brought J.P. Morgan Chase and Citigroup on board to help arrange their bid for Burger King, as the second round of bids will begin later this month.

For the past several weeks, a rumor has been bumping around that ANC Corp. is mulling the economics of securitizing out of bankruptcy. The developments are quite preliminary, and nothing could be confirmed. It is said, however, that Deutsche Bank Securities would structure and lead the deal. Deutsche has had a near 40% market share in the rental car ABS sector since year 2000, by Thomson Financial's numbers.

In its continuing strategy to create a national, commercial mortgage finance and servicing company, last week KeyCorp announced that it is acquiring the mortgage loan and real estate business of Hartford, Conn.-based Conning Asset Management. Conning's business originates, services and securitizes multi-family, retail, industrial and office property mortgage loans on behalf of pension fund and life insurance company investors. The business services approximately $4 billion in commercial mortgage loans. The acquisition is expected to expand the product set of Key Commercial Mortgage, the permanent lending unit of Key Commercial Real Estate.

UBS Warburg has nabbed its first lead mandate for an ABS since hiring Shahid Quraishi (See ASR 4/15/02 p. 8) to head U.S. term issuance, sources note. The bank is expected to unveil a tobacco litigation fee securitization of undetermined size in the coming weeks. The state issuer has yet to be announced. Numerous other bookrunner roles are in the works, sources added.

Down the line, Circuit City could be bringing a new hybrid retail/bankcard product to the ABS market, as it announced last week the launch of a co-branded (Visa) card that is both a store card and general purpose.

Also, the company also announced that its stockholders would vote on the spin-off of CarMax, Circuit City's car dealership subsidiary. The consumer electronics retailer has been active in the securitization market via CarMax auto loans and its retail credit card portfolio.

People

Commercial finance attorney Sol Bernstein has joined the law firm of Zeichner Ellman & Krause LLP as a partner. Bernstein has expertise with syndicated credits, loan participations, derivatives, credit enhancements and liquidity facilities, as well as workouts and restructurings of problem loans.

Investor Kris Harihara has joined GE Asset Management as a vice president focusing on ABS. Harihara moved over from Structured Finance Advisors, where he was managing director. Earlier this year, SFA lost Bruce Maier to TIAA-Cref..

Deutsche Bank added six professionals to its Global Asset Securitization. Raj Shourie joined as a managing director and head of Asset Securitization in non-Japan Asia. Shourie, who previously headed the financial institutions group in Asia for Barclays Capital, will be based in Hong Kong and report to David Shrenzel. Seth Vance, who will be a managing director, will be based in London and report to Michael Raynes, head of asset securitization in Europe. Vance joins the firm from Schroder Salomon Smith Barney, where he was head of European CDO's. Eric Londa joins the firm as a director and head of private-label CMO trading. Londa, who previously was co-head of CMO trading at Countrywide Securities, will report to Global Asset Securitization syndicate head Fred Brettschneider.

Deutsche also added to its global conduit and credit products team, managed by David Shrenzel. The bank hired Eric Shea in New York and Jamie Pratt in London, both as vice presidents. In addition, Swen Maier joins as a vice president in the asset securitization group in Europe, where he will specialize in the structuring and execution of securitizations in Germany.

CDOs

Fitch Ratings has confirmed that the first visible ABS CDO Diversified Asset Securitization Holdings I (DASH I) has experienced a single $6.548 million default. The rating agency is reviewing the transaction's cashflows models, and although no decision has been made, the initial indications are that the issue is holding up well and may not warrant rating action. This would be strong positive for the ABS CDO market considering the deal only has a $10 million first loss tranche.

Calendar 2002

June 2-4: New York, NY Standard and Poor's will host the 2002 Insurance Seminar for insurance industry professionals and investors. In support of the revitalization of New York, the conference will be held at the Grand Hyatt New York. For more information call 212-438-2800.

June 2-5: Whistler, BC, Canada - Insight will host the Fifth Annual Asset Securitization Forum ABS 2002. For more information call 1-888-777-1707 or visit www.insightinfo.com.

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