Ken Wormser and his team of up to 30 ABS pros have resigned from CIBC World Markets to accept similar positions at CDC IXIS. Wormser will be a managing director at CDC, running the global securitization team, reporting to Adil Nathani, managing director of the combined asset-management and capital-markets group. Wormser, a long-time ABS veteran with expertise in CDOs and derivatives, had been at CIBC for five years. Prior to CIBC he worked at Citibank N.A.
Sam Rausa has joined FORE Capital Partners as a director, working with co-founder Harry Forsythe on the development of a non-consolidation solution for banks interested in restructuring commercial paper conduits through third party asset-managers. FORE is one of a small handful of players touting this angle, and potentially cracking into a lucrative niche. Companies such as FORE will technically assume control of a restructured conduit that combines features of existing conduits, such as program-wide credit enhancement, and features of CDOs, such as a diversified pool of assets. This company would theoretically be the decision maker and would consolidate the structures assets onto its balance sheet.
John Mullins has left ING Barings to run the Asian ABS effort at RBS Financial Markets in Tokyo, where he will report to Symon Drake-Brockman, head of global capital markets at RBS. Mullins had been at ING for three years (see ASR 11/8/99), where he was co-head of the global ABS, reporting to Ken Cox. Taking over the ABS effort at ING is Robert Plehn. In a related note, some speculated that this signaled an end to ING's U.S. ABS operations.
James P. Moore has been hired by ABN Amro to head its U.S. asset securitization unit within the financial markets business. Based in New York, Moore will run the bank's U.S. term ABS and conduit operations, as well as its CMBS business. Moore will report jointly to John Mullen, head of global structured-finance operations for the bank and to Pat Fay, head of North American financial markets.
The finale in the battle between bankrupt auto-lender Union Acceptance Corp. is rapidly approaching, with a March 25 court date set to decide whether the servicing platform will be sold to JPMorgan Chase unit System & Servicer Technologies (SST). UAC's bond insurer MBIA brokered the transaction, announced the week of Feb. 3, which would effectively put an end to UAC's hopes to emerge from Chapter 11 reorganization.
Last Monday, William Poole, Federal Reserve Bank of St. Louis' President, expressed concerns about risks to the financial system if Fannie Mae and Freddie Mac actually failed. Poole suggested the GSEs should boost their capital reserves. He also called on the federal government to keep its distance from the two GSEs by possibly withdrawing lines of credit, over time, to the U.S Treasury that both institutions have access to. UBS Warburg said bond market reaction was very muted, which would imply "immunity to alarmist rhetoric." One mortgage analyst said that Mr. Poole is expressing a personal opinion rather than representing the stance of the FED on Fannie and Freddie.
Standard & Poor's said last week that it will closely monitor the U.S. transactions closed and rated by S&P that have reverse mortgages. This move relates to the pending class action settlement filed on behalf of senior homeowners and their families against Transamerica Corp. (originator of the loans), Lehman Brothers subsidiary Financial Freedom Senior Funding Corp. (servicer; and annuity provider), and Metropolitan Life Insurance Co. (annuity provider). The suit alleges excessive fees and shared appreciation costs were charged to borrowers or their heirs. The defendants deny all allegations of defrauding homeowners. S&P bond ratings are not in jeopardy, as the capitalization of shared appreciation was limited to what had been realized before the closing date of the deal during the ratings analysis.
Moody's Investors Service announced last week that it would again rate mortgage securitizations backed by loans originated in Georgia. The change in policy follows amendments made to the Georgia Fair Lending Act, which set forth standards for conforming-balance owner-occupied residential mortgage loans, including disclosure requirements and suitability tests, and imposed strict requirements on loans with high interest rates or costs. This follows a similar announcement from Standard & Poor's on Tuesday. Fitch Ratings was scheduled to make an announcement on the topic Friday.
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