UBS Warburg is moving into the credit card sector, on both the principal- and asset-finance aspects of the business. The firm is actively exploring portfolio acquisition as well as planning to hire a banker to handle its credit card-origination operations. The initial securitization of acquired collateral is scheduled for 1Q03, while the bank intends to hire a banker to cover the credit card origination business by the end of the first quarter. The new hire would report to managing director Shahid Quraishi.
Wachovia Securities has at least four CDOs lined up for the first quarter, including one co-lead, and a fifth deal for late in the first or early second quarter, according to IFR Markets. The latest CLO added to Wachovia's pipeline is a deal for David L. Babson, anticipated as $400 million in size. Wachovia also has a CLO for Callidus Partners on deck using Wachovia's Apex structure, a credit default swap for partial credit enhancement.
The North Carolina bank is prepping two CDOs of CMBS: a deal for Mass Financial sometime late in the quarter; and a $600 million CREST CMBS CDO for Allied Capital. The CREST deals generally feature Wachovia's subsidiary collateral administrator, Structured Credit Partners.
TCW Asset Management has hired Credit Suisse First Boston to run the books on a $400 million cash flow multi-sector CDO expected to reference 60% CDOs. The remainder of the portfolio is expected to reference ABS, CMBS and RMBS.
McKee Nelson LLP has hired Barbara D. Klippert, a former partner at Stroock & Stroock & Lavan LLP. Klippert, who is partner in the firm's New York office, joined McKee's securitization & structured finance practice. Klippert has vast experience in handling ERISA and tax issues. Ms. Klippert principally advises underwriters and sponsors structuring ABS and MBS transactions and investors in such securities on ERISA and tax issues.
Last Tuesday, the White House said it would nominate investment banker Mark C. Brickell to head the Office of Federal Housing Enterprise Oversight (OFHEO), which oversees Fannie Mae and Freddie Mac. OFHEO Director Armando Falcon, who was appointed during the Clinton administration, resigned Tuesday evening with just a year left in his term. Mr. Brickell worked at J.P. Morgan & Co. for 25 years and is now chief executive officer of New York-based Blackbird Holdings, which operates an electronic trading network for derivatives.
Fitch Ratings has announced that it will not rate MBS transactions containing mortgage loans under the Georgia Fair Lending Act (GFLA). However, under certain circumstances, the rating agency would rate deals with loans covered by predatory lending laws in other states. Fitch stated that the unlimited assignee liability imposed by GFLA, which impacts "high-cost" loans and subprime lending, has resulted in significant disruption in the RMBS market. This is because the stipulation could result in losses to securitization trusts that cannot be determined or estimated in advance. Predatory lending laws that place a cap on possible losses - such as the New York State Lending Act and amendments to the New Jersey State Lending Act - are not a great threat to MBS deals containing loans covered by these laws, Fitch stated.
The Department of Housing and Urban Development (HUD) is coming close to issuing a proposed rule that would allow lenders to originate Federal Housing Administration-insured hybrid ARMs for the first time. The proposal, which is being released for a 60-day comment period, would limit the interest rate adjustment on three-year and five-year hybrids to a maximum of one percentage point in variance from the prior interest rate. The 1% cap on the five-year hybrid may be too restrictive for some lenders. The proposal also allows Ginnie Mae to set the adjustment date (within a six-month range) for hybrid loans that go into GNMA securities.
Before resigning last Tuesday, departing OFHEO director Armando Falcon called for the legal authority to close and appoint a receiver for GSEs, in the event that one becomes insolvent. At the Bond Market Association's Eighth Annual Legal and Compliance Conference in New York, Falcon said he is seeking permanent funding for OFHEO, which currently undergoes a yearly appropriations review, in order to have a funding mechanism that is like all other federal safety-and-soundness regulators.
From the Conference
The ABS West conference is moving to a bigger venue next year - the JW Marriott Desert Ridge and Spa.
Dreamworks invited several investment bankers, including JP Morgan bankers, to a special presentation last Thursday evening at the multiplex in downtown Phoenix
CIT Group was heard wooing new investors at the Biltmore. Following its IPO last year, the financial firm is continuing to polish up its image and moving to play in the ABS market as heavily as it once did, before TYCO walloped the firm.
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