People
Tom Hourican has joined underwriter Societe General as global head of securitization risk management, reporting to global securitization chief Greg Medcraft. Also, as previously reported, SocGen has hired Jim Frischling to head the firm's CDO business. Hourican, a veteran in the securitization market, headed the research group at then Chase Securities in the late 1990s. Prior to Chase, Hourican was a founding member of Standard & Poor's structured finance ratings practice, where he worked for 14 years until he left in 1996.
Michael Antonicelli has left MBIA to join WestLB's portfolio management unit in New York. Michael joins the bank as an executive director reporting to James Galowski, managing director, head of portfolio management in the Americas. Previously, Antonicelli was a director in MBIA's global consumer structured-finance department. He had been in his position since 1995 when he joined CapMAC, which was acquired by MBIA in 1999. Prior to that he was with GE Capital.
Morrison & Foerster LLP has hired banking and finance attorney Alice F. Yurke to be a finance & infrastructure partner in the firm's New York office. She is one of the few attorneys in the country with a national practice that combines work on traditional financial products with the complex derivatives transactions that are relatively new to the banking world. She joins Morrison & Foerster from Clifford Chance, where she practiced for 15 years, starting at Rogers & Wells and staying with the firm after it merged with Clifford Chance.
NEWS
Wachovia Securities plans to re-introduce the planned $400 million inter-modal asset ABS for Interpool Inc. which was structured last year but remained in a conduit after demand for off-the-run assets dried up in the wake of the NCFE scandal. With the equity already placed with investors, the debt tranches will be offered, with a five-year average life, in the coming weeks. MBIA is wrapping the transaction.
An arbitrage between annuities and whole life insurance policies is fueling speculation that there could soon be an annuity/life insurance ABS. The idea is that an insurer securitizes a portfolio of life insurance policies and uses the proceeds to purchase annuities. The annuity cashflows would then be used to pay the insurance premiums, plus interest to noteholders, with the issuer capturing the excess. The face value of life insurance policy is principal, and would be passed through to noteholders on redemption (deaths).
While the rating agencies have been mute on the topic, other than confirming interest, outsiders speculated that the structure would need to address the underlying credit of both the insurance providers and the annuities providers. Also an obstacle, newly issued insurance policies are subject to two-years of contestability, meaning the policy is negated if a death occurs within that timeframe. The challenge, sources said, is mitigating "contestability" risk.
Holders of Green Tree/Conseco Finance manufactured housing corporate guaranteed B2 bonds are developing a counterproposal to the to the restructuring plan submitted to bankruptcy court by CFN Investment Holdings. ABS holders claim that the current proposal increases servicing fees to the extent that it cuts into bondholders coupon payments. CFN, a three-way joint venture owned by Cerberus Capital Management, Fortress Investment Group, and J.C. Flowers & Co., submitted the plan following the December 2002 bankruptcy filing by Conseco.
Mutual-fund manager Constellation Financial Management recently closed the first-ever ABCP conduit backed by 12b-1 fee receivables, the company announced last week. The $500 million facility, arranged by Society General, is based on Constellation's static hedged note structure, which includes index put options as a hedge against sharp equity market declines.
After a temporarily relocation following the Sept. 11 terrorist attacks, law firm Thatcher, Proffitt & Wood will be moving back downtown later this year after signing a 15-year lease for four floors within Two World Financial Center. The move is targeted for August, according to the company. Phone numbers will remain the same for all 300 staffers being moved. TPW had previously been located in the WTC's South Tower.
New York University's School of Continuing and Professional Studies is pioneering a new certificate of structured finance program, featuring courses in the economic, technical, legal and accounting aspects of securitization and structured finance. Course instructors include Sylvain Raynes and Ann Rutledge of R&R Consulting, Glenn Arden of Jones Day, and Jim Mountain of Deloitte & Touche. For more information, contact New York University's Katherine Hyde at 212-790-3263.
Standard & Poor's said last week that beginning Feb.1 conforming-balance mortgage loans and manufactured housing loans governed by the Georgia Fair Lending Act (GFLA) will not be allowed in S&P-rated structured finance transactions. This determination is based on the rating agency's assessment that investors cannot be insulated from the potential liability that would result from the violation of the GFLA either through credit enhancement or legal structure.
