Phillip Lassiter intends to resign from his post as CEO of Ambac Financial Group at the end of the year, the company announced last week. "As I turn 60, I feel it is the right time for me personally to turn over the helm," said Lassiter in a press statement. Lassiter had been CEO for 13 years and will stay on as chairman. Robert Genader, current COO, will reportedly assume the role in 2004.
Markus Herrmann has jumped from Deutsche Bank Securities to HSBC, where he starts in July. Herrmann will head HSBC's European ABS research effort, reporting to Frances Hutchinson, head of European credit research.
Capital One has hired Gary Perlin as its Chief Financial Officer, reported American Banker. Perlin takes over for Ralph Willey, who resigned earlier this year amid an insider trading investigation. Perlin was hired away from the World Bank, where he had worked for 13 years, acting as CFO and treasurer. Perlin will also act as executive vice president at Cap One and serve on its newly formed executive committee, which is the final stipulation for Cap One must comply with last year's MOU with federal regulators.
Fitch Ratings announced last week it assigned GMAC Institutional Advisors LLC a set of scores under the agency's proprietary CDO Asset Manager Ratings program. GMAC scored at least a 1.75 or higher in eight of the nine standardized scorecards included in the program. Fitch rates CDO asset managers by asset class, on a scale of 1 to 4, with 4 being the lowest. Fitch awarded a 1.00 score for GMAC's Credit Underwriting/Asset Selection and 1.50 scores for both the Portfolio Management and Portfolio Performance categories. A 2.00 score was given for Financial Condition. As of March 31 GMAC managed 7 CDOs totaling $3.2 billion.
MBIA announced last week that it had finalized arrangements with a successor servicer to assume the servicing rights to the Spiegel Credit Card Master Note Trust. The Office of the Comptroller of the Currency had previously required First Consumers National Bank to resign as servicer by June 30. MBIA, with $840 million of net par exposure to the Spiegel private label trust, increased the amount of credit enhancement in the insured transactions in May 2002. The balance of its exposure is expected to amortize over the next four years and MBIA does not currently expect any material losses on this exposure.
Freddie Mac has lowered its projection for 30-year mortgage rates by about 0.2% in the second half of 2003, relative to last month's projection. Freddie said 30-year fixed-rate mortgages should average 5.8% for the year, and could shift toward 5.5% in the near-term before increasing gradually in the second half. Freddie also anticipates a stronger year for housing starts, at 1.73 million units, with growth coming from single-family homes. Home sales in 2003 are expected to be 3% stronger than in 2002. Sales of new and existing homes should total around 6.7 million units for the year. Meanwhile, home prices are expected to slow, averaging about 5.3% for 2003.
Fixed-rate agency issuance has hit new highs and is expected to reach a new record of about $190 billion per month in May/June, Citigroup said in a recent report. April fixed-rate agency issuance reached approximately $150 billion (compared to March's $143 billion showing), and is slightly up from the previous record set in December of $147 billion. The report also mentioned that the fifteen-year issuance remains quite high, driven mostly by refinancing activity. Fifteen-year share has hit around 30%. In terms of dollars, total 15-year issuance for the whole year of 2000 was around $37 billion. This is less than one month of current 15-year issuance, which this year has been coming in at above $40 billion per month.
Requiring Fannie Mae and Freddie Mac to register their debt and MBS with the SEC would have little effect on the pricing of their securities, according to a Congressional Budget Office report. The CBO report noted that the two GSEs have already agreed to provide additional MBS disclosures. It also said that additional disclosures should correct any "lemons discount" that investors require attributed to the lack of information about prepayment risk.
Three classes of Merrill Lynch Mortgage Investors Inc.'s mortgage pass-through certificates, series 1999-C1, were downgraded by Fitch Ratings. The downgrades were the following: class F, from BBB-minus to BB-plus; class G, from B-plus to B; and class H, from CCC to CC. The rating agency also removed class F from Rating Watch Negative and affirmed the ratings on eight other Fitch-rated classes in the deal. Fitch said the downgrades were due to a re-evaluation of specially serviced loans.
