Moody's Investors Service has reorganized its CDO and derivatives group, which will still be led by group Managing Director Noel Kirnon. Gus Harris, managing director, is heading up CDO service, monitoring and SME CDOs; Gary Witt, managing director, is has responsibilities in CDOs-squared, SF CDOs, CAT bonds, market value structures and CFOs; Yuri Yoshizawa, managing director, has responsibilities in synthetics CDOs-squared and synthetic SF CDOs, distressed, emerging markets, TruPS, corporate synthetics, and project finance CDOs; William May, managing director, has responsibilities in structure notes, repacks, corporate synthetics, cashflow CDOs; Jeremy Gluck, managing director, is heading up CDO analytics and research.
Wachovia Securities has hired five senior-level marketers, structurers and traders in its structured credit products group including Ron Schumer, director in TRS trading; Greg Freer, director in marketing; Andrei Litvintsev, vice president in deal management; Julia Hu, vice president in deal management for multisector CDOs; and Henrik Malmer, vice president in ABS/CDO trading. All five new hires will report to Yu-Ming Wang, managing director and global head of structured credit products. These most recent additions are part of the firm's effort to expand its U.S. and international cash and synthetic securitization business.
The asset-backed commercial paper market saw a modest increase in outstandings at the end of March, after slipping beneath the $700 billion threshold during the month, according to data tracked by the Federal Reserve Board. ABCP closed March with $710 billion outstanding, $18 billion behind last March's volume. Overall CP rose by $8.4 billion to $1.34 trillion. ABCP now accounts for 53.13% of the overall market, down from the peak 56.66% in September 2003.
Norddeutsche Landesbank has moved Associate Vice President Holger Bretz from corporate banking to asset-backed finance as part of the group's expansion. Bretz has extensive experience with ABCP liquidity facilities and will now be working on ABCP conduit transactions through Hannover Funding. The bank has yet to fill the analyst position in asset backed finance.
The State of New Jersey Board of Public Utilities recently voted unanimously to hire Saber Partners, LLC to be its financial advisor concerning the issuance of bonds backed by special charges on New Jersey retail electric consumers' bills. The bonds are to be offered under New Jersey's Electric Discount and Energy Competition Act ("EDECA") to reimburse investor-owned utilities for certain power costs. Saber Partners currently serves the State of Texas in a similar role on the issuance of $3 billion of comparable bonds in Texas.
Moody's downgraded Class F of GMAC Commercial Mortgage Securities Inc. mortgage pass-through certificates, series 2001-FL1 from B1' to B3'. Additionally, the rating agency upgraded two classes in the deal and affirmed the ratings of two other classes. The certificates are collateralized by three remaining mortgage loans ranging in size from 17.7% to 62.9% of the pool (based on current principal balances). The loans defaulted in late 2003 or early 2004, and the special servicer is now pursuing resolution. Moody's said Class F was downgraded due to poorer pool performance, while classes C and D were upgraded due to increased credit support levels.
Fitch Ratings has downgraded eight classes of AerCo Limited. The downgrades reflect the rating agency's concern that continued impaired lease rates, an aging fleet and rising expenses will continue to weaken AerCo's cash collections. Fitch is also concerned that weak cash collections combined with a redirection of the collections in the payment waterfall will likely result in the suspension of interest payments on the B, C and D note classes in the next several years.
Total home sales will probably set another record in 2004 as interest rates stay low and mortgage originations remain high, reported Freddie Mac in its economic forecast for April. Freddie estimates that home sales will total 7.27 million units this year, 1% above sales in 2003. Rates on 30-year fixed-rate mortgages, which averaged 5.6% in the first quarter, should drop10 basis points in the second quarter before slightly increasing to 5.7% in 4Q04. By lowering its mortgage rate forecast, Freddie was able to increase its estimate for total single-family mortgage originations, which is expected to be almost $2.8 trillion this year.