People
Houlihan Lokey Howard & Zukin announced last week the appointment of Bob Hotz - a 34-year Wall Street veteran who previously worked as head of corporate finance in the Americas for UBS Warburg - as co-head of the firm's investment banking business.
Houlihan Lokey's IB business includes mergers and acquisitions, corporate finance, financial opinions and advisory services. The firm's financial restructuring practice is the largest of any investment bank in the world.
News
Marlin Leasing Corp. is out with a $184 million small ticket equipment lease ABS this week via Deutsche Bank, talking its 1.6-year senior single-A rated class at 120 to 125 basis points over EDSF, according to Thomson IFR Markets. The June 2001 Marlin Equipment issue was backed by 13,100 small ticket equipment contracts with an average balance of $7,400. That pool consisted of leases on copiers (14.3%), computers (8.79%), telecommunications (8.7%), automotive (8.38%), water coolers (8.36%) and security systems (6.69%).
The company's lease portfolio consists primarily of commercial "hell-and-high water" leases for equipment with a purchase price generally less than $150,000.
Bear Stearns has priced the CLAWS CLO transaction for Bear Stearns Asset Management, which has been described as tranched first loss piece providing credit enhancement on the upcoming $402 million Gallatin Funding Trust I CLO, according to Thomson IFR Markets. The CLAWS $43.5 million single-A rated A class priced at 195 basis points over three-month Libor and the $20.1 million triple-B-rated B class priced at 275 basis points over three-month Libor. Each class has a 5.5-year average life. The Gallatin Funding cashflow notes are expected to price this week.
Morgan Stanley is making progress on marketing the debt for Palmetto Synthetic CDO Ltd for Deerfield Capital, a $1 billion notional, managed synthetic IG CDO. The triple-A notes on the five-year bullet remain talked at 60 basis points over three-month Libor. The pool of investment grade corporate debt will have a Baa1/Baa2 average rating and a 1.5% issuer concentration limit on credits rated Aa3 or better. The issuer and syndicate could not be reached for comment.
Nikko Principal Investments last week said that it completed the purchase of 20 U.K. private hospitals owned by the Swedish listed healthcare group Capio AB ("Capio"), for GBP250 million. NPI is the European principal investment arm of Nikko Cordial. The transaction is the first structured sale and leaseback by a major U.K. private hospital group, according to Nikko.
Bookrunner Societe Generale last week priced a EURO600 million Spanish SME issue called FTPYME TDA SABADELL 1 for Banco de Sabadell. The deal was backed by a portfolio of loans to small and medium sized Spanish enterprises (SMEs'). The top class, which priced at two basis points over six-month Euribor, featured a guaranty from the Kingdom of Spain.
Miscellaneous
Via its new commercial mortgage conduit, NM Rothschild will launch the program's first CMBS before year end, a EURO250 million offering of investment grade paper in the euro market, according to sources at the bank, jointly managed by Rothschild and Merrill Lynch.
The conduit, called Real Estate Capital, is funded by a EURO250 million warehouse facility with Merrill, though the capacity of REC is expected to grow following the first CMBS refinancing. REC is the first real estate conduit in the U.K. to directly write commercial mortgages, as opposed to purchasing the mortgages from an intermediary's balance sheet. Rothschild, acting as loan placement agent instead of lender, scores favorable regulatory treatment.
The bank provides 10% single-A program credit enhancement. REC has already funded about EURO100 million in commercial mortgages.
Ratings
The rating wars continue. Last week, Fitch Ratings released a two page commentary titled "Should Moody's Notch it Own Ratings," in which Fitch argues, based on research it released the week prior, that the distinctions between cross agency rating migrations are almost negligible and do not justify the notching policies that Moody's uses on Fitch's ratings. In doing so, Fitch scrutinizes Moody's recent ratings study called "Moody's Studies Ratings of Non-Moody's Rated CDOs and Confirms Rating Estimate Approach."
Calendar 2002
July 9-10: New York, NY - The Strategic Research Institute will host the third annual Forum on ABCP Liquidity/SIVs. For more information, visit www.srinstitute.com/ca276
September 5-6: London, England: The Strategic Research Institute will present The Premier European Forum on ABCP. For more information visit www.srinstitute.com/ca273
October 6-9: Miami, FL: The Strategic Research Institute will host the The ABS South Beach Industry Summit. For more information visit www.srinstitute.com/ca280
October 9: New York, NY - The Bond Market Association presents the Annual Awards Dinner. For more information, call 212-440-9429 or email mgarcia@bondmarkets.com.
