For the FDIC's exclusive three-page comment on its handling of the NextCard debacle, see p. 16.
Constance Jameson, a securitization and derivatives specialist who most recently was consulting with a number of financial institutions, has joined the New York office of Jones, Day, Reavis & Pogue as counsel in its Business Practice Group. "The fact that Constance is well-known in the industry and will contribute her talents to the continued growth of our securitization and structured derivatives practice makes her a valuable addition to our team," said Glenn S. Arden, global head of securitization at the 1800-lawyer Jones Day. Jameson will also assist the firm's Asian expansion through her extensive experience as an ex-pat in Japan in the 90s, explained Arden. "Along with our recent acquisition of Mark Dola, a senior associate from Orrick Herrington's Washington office, the addition of Constance Jameson reflects our strategy of careful growth for this close-knit group of lawyers."
UBS Warburg has hired Shaker Sundaram away from Schroeder Salomon Smith Barney as a European ABS and MBS salesman. In his new position he will report to Emmanuel Bucaille. Formerly a researcher at Schroeder Salomon Smith Barney, the firm is now in the process of hiring two or three people to replace him in a move to re-emphasize the research effort.
Rob Best has been hired to fill the new post of senior vice president and commercial mortgage-backed securities manager in Washington Mutual Inc.'s specialty finance group. Best will be develop and carry out a strategy to establish a commercial real estate loan CMBS operation within the group. The new hire joins WaMu after 17 years with Principal Mutual Life Insurance Co., which is based in Des Moines, Iowa.
Automobile financier Long Beach Holdings Corp. was officially shut out of the equity market for the second time last week when it yanked its $110 million public offering (See ASR 6/3/02). The Paramus, N.J.-based lender withdrew its IPO, lead managed by Friedman, Billings, Ramsey & Co., on Sept. 26 citing market conditions. Prior to that it had been postponed in June of this year.
Marriott International, Inc. is planning to securitize approximately $1 billion of timeshare loan receivables in a term ABS offering, with settlement scheduled for late October, sources said. Marriott has mandated Credit Suisse First Boston to lead manage the transaction.
Fitch Ratings downgraded three classes of J. P. Morgan Commercial Mortgage Finance Corp.'s mortgage pass-through certificates, series 1999-C8. The downgrades were as follows: class H, from BB to BB-minus; class J, from B to B-minus; and class K, from B-minus to CC. Fitch also affirmed the ratings on the nine other Fitch-rated classes in the deal. The rating agency attributed the downgrades to deterioration in the pool caused chiefly by six specially serviced loans. Of the six loans, four are retail, one is health-care-related, and one involves a mixed-use property.
Due to intense lobbying from various groups, including Rep. Richard Baker (R., La), the Office of Federal Housing Enterprise Oversight said it would delay the deadline for comments on proposed amendments to the new risk based capital rule for Fannie Mae and Freddie Mac. The comment period has been extended to Oct. 29 from Sept. 23. One of the changes OFHEO is proposing is for the GSEs to follow FASB 133 in accounting for certain derivatives. Adhering to FAS 133 would have increased the risk-based capital requirements by $1.7 billion for Freddie and $121 million for Fannie if applied in the first-quarter test run of the new capital rule, according to OFHEO.
Leading democrat on the House Finance Committee, Barney Frank (MA), said that he would be open to discussing the status of the tax exemption and credit line privileges offered to the GSEs. The challenge to Fannie Mae's and Freddie Mac's favored status is not a new debate, but prior discussion of this issue has previously been opposed by the now current top democrat, John LaFalce (NY). Frank believes that those privileges are really not significant to the performance of the GSEs.
Fitch Ratings said that Banc of America Large Loan Inc. commercial mortgage pass-through certificates, series 2001-7WTC, will remain on Rating Watch Negative because of continuing concerns that insurance proceeds from the destruction of 7 World Trade Center may be used to fund construction. The deal is indirectly secured by a leasehold interest in 7 WTC, a 47-floor building adjacent to the twin towers that caught fire and collapsed on Sept. 11. Fitch placed all classes of the transaction on Rating Watch Negative April 3 citing the increased likelihood insurance proceeds would be used to rebuild the building in the near future instead of retiring the outstanding bonds and seeking more cost-effective construction financing through the Lower Manhattan Development Corp. Fitch says it will probably downgrade the certificates if the insurance proceeds are used for construction because this would pose additional risks.