In a restructuring within the bank, Banc of America Securities named managing director Pat Augustine head of a new product group overseeing ABS, MBS, investment-grade debt and non-leveraged loan operations. The group is called "Debt Operating Committee," of which all of its members report to committee chair Ed Brown. The 11-member committee oversees all aspects of fixed-income operations, according to a memo. Augustine formerly ran the sales, trading and research operations within BofA. The role of managing director George Ellison remains unchanged, although he now reports jointly to Augustine and Bill Hodges, who will now head debt capital markets and leasing operations.
ABN Amro continues with its internal restructuring effort that aims to bring together its origination and trading teams to offer and enhance its execution platform for clients. The latest change brings aboard Selwyn Rayzor, who was named European head of asset securitization. Rayzor was previously acting as global head of ABS trading at the bank. She will remain at the bank's London office.
Citigroup Capital Markets recently moved vice president James Wang to its ABS research strategy team, from its Fixed-Income Index group. Wang, who has been with the firm for four years, reports to research director and group head Ivan Gjaja and will focus on quantitative analysis for Citigroup.
Clayton Homes, parent of MH lender Vanderbilt Mortgage, has set a two-week deadline for parties interested in acquiring it to submit bids. This move comes after equity buyout specialists Cerberus Capital Management emerged as a rival to Berkshire Hathaway's bid to acquire the company. The rival bid follows indications that some of Clayton's major shareholders were unsatisfied with Berkshire's $1.7 billion offer, followed by Cerberus saying they may trump Berkshire. Berkshire, meanwhile, has said its offer is final.
Commercial lender CapitalSource is moving forward with its plans to go public, following the filing of an amended S-1 shelf registration with the Securities and Exchange Comm- ission (see related story, p. 11). The small- and medium-sized business lender names Credit Suisse First Boston, Citigroup and Wachovia Securities as lead underwriters of the pending offering. CapitalSource stated goal is to be "the lender of choice for small- and medium-sized businesses with annual revenues ranging from $5 million to $250 million that require customized and sophisticated debt financing," according to the filing.
AmeriCredit Corp. has amended certain performance triggers within the 12 outstanding auto loan securitizations wrapped by FSA. The cumulative net loss level-two triggers were raised, providing for an increased insurance premium for the monoline surety provider. While the specific levels were not given, the Level 2 triggers are now reportedly set 800 basis points greater than the level 1 triggers, versus 200 to 400 basis point triggers that had been in place. The amended triggers impact all transactions priced from 2000, 2001 and 2002, totaling roughly $16.5 billion of securities.
Against all odds, Germany's upper house of parliament fast-tracked the new true sale legislation. This law will exempt from trade tax SPVs set up in Germany that purchase loan receivables from financial institutions. Simultaneously, KfW joined with a number of German financial institutions to form a true sale initiative that is now expected to launch a first issue by year-end.
According to market reports early last week, the European Commission and the European Investment Bank (EIB) presented its work programme for the next six months that would be supported by an increase in investments in the Trans-European networks and development projects. The EIB hopes to dedicate at least E100 billion (US$112 billion) - half dedicated to transport and half to research - in loans until 2010. Among the different ways of raising funds, EIB is said to also be investigating the possibility of implementing a securitization system.
Fannie Mae reported an increase in its effective guarantee fee rate in the first quarter, and lenders may continue to see upward pressure on guarantee fees going forward, chief financial officer Timothy Howard said. In the second quarter, the GSE stated that its effective guarantee fee rate was 21.2 basis points, increasing from 20.3 in the first quarter and 18.3 in the second quarter of last year. In a conference call with analysts, Howard also said that the corporation's credit losses would likely rise, adding that Fannie Mae's intent is to have its average guarantee fee keep pace with changes in its average credit losses.