HSBC recently poached four ABS pros from ABN AMRO to fill vacancies in its U.S. structuring and trading groups. ABS structurers Dan Costin, Cyrus Mohebbi and syndicate head Caroline Morrill were all hired from ABN AMRO last week. Mohebbi and Morrill are managing directors at HSBC, reporting to U.S. securitization chief Mike Normile. Costin will report to Mohebbi. Also, HSBC hired Alice Koo from Citigroup Asset Management to work in its product management group. ABN AMRO, meanwhile, remains committed to its ABS operations and plans on filling the vacancies, said U.S. ABS group head and managing director William Haley.
John P. Boyle, vice president, secretary and chief accounting officer at DVI Inc. resigned from his position, effective Apr. 30, the company reported. Boyle reportedly left to pursue an undisclosed "new professional opportunity."
The management shakeup at bond insurer ACA Financial Guaranty Corp. continued throughout the week, as Deputy Chairman and Chief Executive Michael Satz said he will resign in the near term, citing personal reasons, reported by The Bond Buyer. The company expects to announce a succession plan within the next several weeks, Satz said on a conference call. An ACA spokeswoman said, "The expectation is that [a replacement] will be selected from outside of the company, but within the industry." Satz's announcement followed the departure of former COO Maryam Muessel, who headed ACA's collateralized debt obligation business. Rating analysts said these executive changes may negatively impact the company's expected initial public offering, planned for either June or September. The combination of Muessel's departure and capital concerns prompted Standard & Poor's and Fitch Ratings to change the financial strength of ACA on rating watch negative, from stable last Wednesday. S&P also put ACA's enhancement and corporate credit ratings on CreditWatch negative.
Alt-A MBS structurer and trader Hyungmyung Peak has been hired by RBS Greenwich Capital from a similar position at Nomura Securities, reporting to RBS Greenwich managing director and head of trading Ron Weibye. Peak had been with Nomura for roughly 3 years where he headed the Alt-A structuring group.
CDO tightening has by no means been limited to SF CDOs (see story on p. 1). High yield loan deals have seen remarkable reception. Talk on the triple-As for David L. Babson's pending HYL CLO was revised from Libor plus 40 to Libor plus 37 to 38. Morgan Stanley is underwriting the transaction. Several other recent HYL deals have priced below the 40 mark, including Putnam's Boston Harbor (Lehman Brothers), Invesco's Champlain 2004-I (Wachovia Securities) and Mountain Capital's Mountain CDO III (Bear Stearns).
Fitch Ratings noted last week in its CDOpinions that new high yield loan deals are able to mitigate some interest rate risk by filling their bond buckets with new issue floating-rate high yield bonds.
The Office of Federal Housing Enterprise Oversight (OFHEO) Director Armando Falcon Jr. has told Fannie Mae to account for the manufactured housing and aircraft lease securities impairments in the periods that they occur. OFHEO has determined that Fannie isn't applying the right accounting with respect to determining asset impairments and revenue recognition for these securities. In a press release, Falcon said that Fannie improperly accounted for these assets in a manner that fails to capture losses. He also directed the GSE to complete the accounting to recalculate the proper asset impairment on the securities by May 14.
XL Capital Ltd. reported record net income for ordinary shareholders for first-quarter 2004 of $452.2 million, or $3.25 per ordinary share. Total assets as of March 31, 2004 were a record $44.2 billion, compared with $40.8 billion as of Dec. 31, 2003.
ABN AMRO has recruited two new members for its energy market trading team, both of whom are joining from BNP Paribas. Wayne Harburn and Vincent Chavonez have been appointed global head of commodity trading and global head of commodity marketing, respectively.
Dominion Bond Rating Service last week issued a report detailing the potential problems plaguing Mitsubishi Motors Corp. ABS. The rating agency does not, however, rate MMCA transactions.
Standard & Poor's has released CDO Evaluator Version 2.3. The latest iteration of CDO evaluator uses "drill-down" methodology for assessing the risk of loss to investors in CDOs that reference other CDOs, so-called "CDO of CDO" or "CDO squared" transactions. The new version uses Monte Carlo simulation methodology.
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