After covering rates and MBS strategy at Bear Stearns for the last four years, Steven Abrahams has moved to a position on the mortgage trading desk at the firm, where he will trade mortgage derivatives. In a note to readers of Bear's weekly Across the Curve and Rates and Structured Products, Abrahams said, "the rates markets have been fascinating to cover over the last year, as so many new forces have come into play. We'll see if they look as fascinating through the lens of a P&L."
Merrill Lynch and Dresdner Kleinwort Wasserstein have reportedly won a mandate from Russia's Alfabank to structure a deal backed by diversified payment rights. Founded in 1990, the originator is one of Russia's largest privately-owned banks. Its assets totaled $7 billion at the end of 2004.
Law firm Chadbourne & Parke LLP has formed a new trading and derivatives practice group, which will be led by Washington, D.C. office partner Merrill Kramer. The group also includes teams based in London, headed by Partner Denis Petkovic, in New York, led by Partner Andrea Satty, in Houston, led by Partner David Schumacher, and Warsaw, led by Partner Igor Muszynski. "The formation of our Trading and Derivatives Group recognizes the skill sets we have in our various offices and will significantly enhance our ability to serve the growing needs of our clients involved in the banking and energy industries internationally, said Chadbourne Managing Partner Charles O'Neill.
Law firm Paul, Hastings, Janofsky & Walker hired Terry Garnett and Vincent Yip as partners in the firm's intellectual property litigation practice, operating out of the Los Angeles office. The pair had formerly been heads of the IP litigation practice at Alschuler Grossman Stein & Kahan. Garnett and Mr. Yip bring with them a team of five associates, Hua Chen, Jay Chiu, Sang Dang, Maxwell Fox and Peter Wied, all with experience in the IP arena.
With the completion of the inaugural JPMorgan Securities acquisition shelf JPMorgan Mortgage Acquisition Corp. Trust, the Chase Funding Loan Acquisition Trust has been retired, sources confirmed. The CFLAT trust, which issued last November, has issued 10 transaction since its series 2001-AQ1 offering in October 2001.
Freddie Mac announced that as part of its ongoing review of mortgage-backed security disclosure policies and practices, the company will enhance its disclosures for ARM and ARM Giant PC securities and Initial Interest fixed-rate and ARM PC securities, beginning in September. Freddie Mac will expand its disclosures for ARM PCs and ARM Giant PCs by providing the following elements at the time securities are issued: original WALA; Original WAOLT; Current WARM; Current WALA; and Current WAOLT. Original WALA and WAOLT will be disclosed at issuance and current WARM, and WALA and WAOLT will be updated monthly.
Moody's Investors Service has revised its overcollateralization floor for subprime mortgage transactions that include a mix of asset types, such as manufactured housing loans, the company announced Tuesday. Going forward, the adequate overcollateralization floor will approximate the weighted average of 4% weighted by the MH concentration above 2%; and 0.50% weighted by the remaining collateral balance. "For home equity deals where manufactured housing loans represent more than 2% of the cut-off date pool balance, Moody's will consider a higher overcollateralization floor to be credit-neutral, and such deals will receive a lower rating if traditional floors are used from this point forward," said Moody's analyst Navneet Agarwal.
Harley-Davidson's financial services unit reported operating income of $51 million, up $2 million or 4.1% from the same period last year. During the quarter, HDFS sold $775 million in retail motorcycle loans and recorded a gain of $14.0 million. This compares with a gain of $19.3 million on $626 million of loans securitized during the second quarter of 2004. Annualized credit losses on a managed portfolio basis during the first six months of 2005 totaled 0.89%, compared to 0.63% in 2004, attributed to lower recovery rates and a higher incidence of loss.
Freddie Mac has decided to extend its full menu of relief policies for borrowers affected by disasters to borrowers whose homes were damaged or destroyed by Hurricane Dennis, the GSE announced. Additionally, Freddie Mac strongly encourages servicers to extend the following measures to help affected borrowers: Expediting the release of insurance proceeds to help borrowers secure materials, labor and other resources to repair their homes; Waiving assessments of penalties or late fees against borrowers with disaster-damaged homes; and, Not reporting forbearance or delinquencies caused by the disaster to the nation's credit bureaus.
Fitch Ratings has initiated new seller/servicer ratings on five prominent U.S. card issuers: First National Bank of Omaha, HSBC Finance Corp., MBNA America Bank, The Metris Companies and Providian National Bank. These companies service a total of $103 billion in receivables for 143 Fitch rated transactions. Fitch acknowledges the importance of seller/servicer operations in asset-backed securities performance and ultimately in its credit rating process. For full ratings, go to p. 4.
Deutsche Bank Securities arranged the first-ever Russian ruble export financing for the Russian province Samara with a RUR1.13 Billion ($41 million) 12-year transaction, the company announced. The financing supports the export of high-tech medical equipment from New York-based ACD Research Inc. to the Samara Oncology Center, located about 600 miles southeast of Moscow. The medical equipment will enable Samara's Oncology Center to begin cancer treatment in a region that is home to 13% of Russia's population. Construction of the 550-bed oncology center was completed last year. The US government, through its Overseas Private Investment Corp., provided political risk insurance on the transaction.
UCC Consulting Corp., a unit of UCC Capital Corp., has hired apparel industry veteran Craig Hoffman as managing director. Hoffman joins UCC from Hoffman & Co., where he was a founder and principal dedicated to principle investing, M&A advisory and structured products focusing on corporate turnarounds, distressed debt and equity and private placements.
GE Commercial Finance Corporate Lending named Roger Tauchman as sales team leader for its central region, responsible for developing origination opportunities throughout Illinois, Indiana, Wisconsin, and Michigan. In his new role he reports to Rich Rodgers, managing director for the region. Tauchman joined GE Corporate Lending in 2000 as a vice president of portfolio and underwriting. Prior to joining GE, Tauchman worked in numerous roles for a number of financial institutions, including Bank of America and Heller Financial.
MGIC Investment Corp. reported that total revenues for 2Q05 were $395 million, down 2% from 2Q04's $403.1 million, resulting from a 5.9% decrease in net premiums earned. Net premiums written for the quarter were $309.2 million, compared with $319.1 million in the second quarter last year, a 3.1% decrease. New insurance written in 2Q05 was $16.6 billion, versus $16.1 billion in 2Q04. New insurance written for the quarter included $6.2 billion of bulk business, compared to $2.9 billion in the same period last year. New insurance written for the first six months of 2005 totaled $28 billion, down from the $29.1 billion in the first half of 2004. The declines in new insurance were blamed on "attractive interest rates and strong home price appreciation [that] continue to negatively impact insurance in force and associated revenues," according to a company release.
Equilease Financial Services recently completed a $100 million lease-backed commercial paper conduit transaction with Autobahn Funding and NewStar Financial as lenders and DZ Bank as agent. This transaction supports Equilease's business strategy of providing equipment leasing and financing to privately held companies and small publicly traded businesses, according to a release. Additionally, it complements its strategy of acquiring seasoned portfolios from banks, manufacturers and other lenders that have withdrawn from the marketplace.
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