Moody's Investors Service has promoted Nicolas Weill to chief credit officer, a newly created role at the rating agency. Weill will be responsible for the constancy of rating decisions and methodologies within the group, as well as with other product groups at Moody's. He will also be charged with making sure ratings are adjusted on a timely basis, among other roles. Weill, who has been with Moody's for eight years, reports directly to Andrew Silver, group managing director of asset finance. Weill has traditionally been involved in the more esoteric asset classes, such as tobacco, structured-settlement securitization and pooled aircraft ABS.
Ravindra Joseph, head of structured products at Morgan Stanley's European securitization business, has resigned, according to newswire reports. Ellen Brunsberg, a specialist in Morgan Stanley's European commercial mortgage lending and securitization division, will replace Joseph.
Sallie Mae has announced several officer promotions: Bob Ballard to senior vice president, guarantor services; Tom Brisson to senior vice president, debt management; Lance Franke to senior vice president, corporate finance; Jon Kroehler to senior vice president, loan delivery product development and support; Renee Mang to senior vice president, servicing; Laura Gurdak to vice president, sales management; Sandy Masino to vice president, risk assessment and internal audit management; and Gail Somerville to vice president, policy.
Financial Guaranty Insurance Corp. has made good on its promise to expand outside of home equity in the ABS market. The newly staffed-up monoline wrapped its first-ever rental car deal, a $600 million transaction for AESOP, the issuance vehicle of Avis Rent A Car, a subsidiary of Cendant Corp. This is also FGIC's first ABS wrap since mid-last year, prior to the sale of FGIC from GE Capital Corp. to a group of investors led by the PMI Group.
The Royal Bank of Scotland has been granted branch status in Australia and plans to establish itself in the local securitization market by making its balance sheet available for warehousing to mortgage brokers in the region, according to market reports.
Issuance of catastrophic (cat) bonds was up 50% in 2003, according to Moody's Investors Service. The rating agency tracked $1.5 billion in 13 transactions last year, compared with an average $1 billion spread over four to six deals in previous years. Cat bonds are risk-linked securities through which a sponsor transfers the risk of some losses that may arise from natural disasters to investors. Moody's has rated 41 cat bonds totaling roughly $6.2 billion since the end of 1996. There has yet to be a loss to investors, the report noted.
Aggregate volume of international CMBS issuance has fallen after several years of solid growth, slipping by 26% year-over-year in 2003 to $20 billion, according to Standard and Poor's research. However, the report notes that the emergence of CMBS lenders and repeat issuers, overcoming substantial challenges presented by greatly varying markets and jurisdictions, is the real story for 2003. The international CMBS market is poised for growth as originators and issuers build up their platforms, increase their jurisdictional and market knowledge, and continue entering new markets, the report.
The placement on Credit Watch negative of the unwrapped tranches of Fixed Link Finance and Fixed Link Finance 2 is the result of Eurotunnel's announcement that it is seeking to restructure its debt. Standard and Poor's stated that it been expecting the restructuring of lower ranking Eurotunnel debt instruments and extension of the debt maturity profile of junior debt, but was unclear as to the potential effect on junior securitized debt principal or interest charges (as well as other debt).
JPMorgan Chase has won the contract to provide transaction-processing services to Ginnie Mae. The bank will provide Pool Processing Agent (PPA) and Central Paying and Transfer Agent (CPTA) services to Ginnie Mae. The contract will remain in effect for three years with two one-year renewal options.
Moody's Investors Service has downgraded Class B-2 and B-3 certificates issued by CIT Home Equity Loan Trust. Other classes rated by Moody's in this transaction were not affected. The actions stem from weaker-than-expected performance, which has caused complete erosions of the non-rated Class B-4 certificates. The Class B-3 certificates have taken write-downs, and future losses based on pipeline delinquencies are expected.
In CMOs, with the structuring final for February closed, JPMorgan Securities expects CMO production to be around $14 to 15 billion, or down 10% from January levels.