As part of Cantor Fitzgerald's ongoing expansion of its debt capital markets group, it hired David Goldman as global head of fixed income research. Goldman was previously global head of debt research at Banc of America Securities. Before joining BofA, Goldman was a global credit strategist at Credit Suisse First Boston. The financial services group has been hiring aggressively for its debt capital markets division in the past year by opening four new U.S. regional offices focused solely on this area. Irvin Goldman, president and chief executive of debt capital markets, said Cantor is still planning to continue expanding its operations throughout the U.S.
Hedge fund Clinton Group announced last week that it hired Ronald DiPasquale to oversee structured capital and real estate portfolios for the firm. Prior to his new position, DiPasquale was in charge of mortgage-backed trading at Keefe, Bruyette & Woods and a managing director at Fortress Investment Group. Clinton also hired Marion Boucher Soper to head its credit research team. Soper, a former managing director and head of global credit research at Deutsche Bank, is responsible for supporting Clinton's portfolio managers and their trading by helping come up with credit market investment ideas. Prior to joining Deutsche in 2002, Soper was director of high-grade, fixed-income research at Bear Stearns.
Thacher Proffitt & Wood announced last week that it elected Penny Matthews Groel, a member of the firm's structured finance practice group, to the partnership, effective Jan. 1. Since joining Thacher in 1988 as an associate, Groel has represented issuers, underwriters and trustees in the public offering and private placement of ABS and MBS. She also represents corporate clients as sellers, purchasers and servicers in connection with whole loan deals and as borrowers under various financing facilities.
Drew Fung has joined RREEF as head of U.S. high yield debt investments, announced last week by Christopher Hughes, head of global real estate securitized products. Fung will be responsible for leading and expanding the existing team that specializes in offering investment options in an array of structured debt investments such as mezzanine, B-notes, preferred equity and bridge loans. He was formerly at CWCapital overseeing subordinate debt product ion, and before that he was with Lend Lease. Meanwhile, Thanh Bui also joined the team as vice president reporting to Fung. She will help lead origination and production efforts for the group. Bui previously worked for CWCapital where she was responsible for originating, structuring and underwriting high yield debt investments.
Swiss Re's $370 million embedded value securitization had two of its triple-A rated tranches wrapped by XLCA-UK. According to market reports, it is the first time Swiss Re has worked with a monoline for this type of structure. The deal, ALPS Capital II plc issued four separate series of notes - Series A ($220 million), Series B ($90 million), Series C ($30 million) and Series D ($30 million). The notes have a 20-year legal final maturity. XLCA-UK provided two triple-A financial guaranties on the Series A and Series B Notes, with an average life of 2.3 years and 6.6 years, respectively.
Moody's Investors Service last week upgraded forty-nine subordinated tranches from Northern Rock's Granite Mortgages Master Trust. Affected transactions included Series 2001-1, -2, 2002-1, -2, 2003-1, -2, -3, 2004-1, -2, and -3. Slightly more than half of the upgrades were two notch improvements. Reserves from these deals formed the bulk of the collateral for Northern Rock's Whinstone Capital Management transaction that priced at the end of October (see related story p. 13). These ratings changes bring the credit designations on the tranches in line with or slightly above Standard & Poor's ratings.
Fitch Ratings has released formal rating methodology on commercial real estate construction loan pools. The new construction loan model determines a base default probability and base loss severity for each construction loan based on a project's percentage of completeness. Fitch's base assumptions for construction loans are higher compared to conventional CRE loans. Even though recent default rates for construction loans were originated from what the rating agency considers quality programs, they show a close correlation to that of traditional CMBS. Fitch believes a capital constrictive lending environment or a stressed real estate market would cause significantly more defaults for construction loans compared to traditional CMBS loans, stated Fitch Senior Director Patty Bach.
Housing and Urban Development Secretary Alphonso Jackson announced last week that the Federal Housing Administration has increased its single-family home mortgage limits by over 15%. Effective Jan. 1, FHA will be insuring single-family home mortgages up to $200,160 in standard areas and up to $362,790 in high cost places. By contrast, last year's loan limits were $172,632 in standard areas and $312,895 in high cost areas. Meanwhile, the loan limits for two-, three- and four-unit dwellings also rose. These new loan limits are part of an annual adjustment HUD makes to account for rising home prices. HUD calculates the FHA mortgage loan limit for 3,226 geographic areas within the U.S. These limits are different from area to area, but all fall under the newly announced price range.
Bear Stearns disclosed in a regulatory filing recently that the Federal Trade Commission has asked its EMC Mortgage Corp. subsidiary to provide documents relating to EMC's subprime lending practices. Bear stated that the FTC issued the civil investigative demand as part of an investigation into subprime lenders, loan servicers and loan brokers to find out whether they have violated consumer protection laws, adding that EMC is cooperating with the probe.
Banco Santander Central Hispano SA, the Spanish owner of Abbey National PLC is considering buying back Abbey's credit card operations from MBNA Corp., according to published reports. The Spanish bank has issued 15 million cards globally and is thought to be expanding Abbey's business.
Bear Stearns announced last month that it has built up its fixed income execution capabilities by hiring a team to provide trading services directly to broker dealers and investment advisors. In a statement, Bear said that the team offers a solution for those fixed income trades requiring agency execution. Ron Pimental will head the new team and report to Paul Friedman, senior managing director. Pimental most recently worked at First Principle as a managing director and head of fixed income trading and transition management. Also joining Pimental at Bear Stearns are Alan Stentiford, Rick Lauchnor and Dan Ladley. Stentiford's role is an associate director in charge of trading for the agency execution team, Lauchnor is now an associate director responsible for sales while Ladley is now the vice president in charge of operations.
HSBC announced the retirement of its CEO Alan Jebson, who has held the position since 2003. Jebson will be retiring in May without any named successor as of yet. Jebson's leaving is the latest from the bank board since HSBC made an announcement in November that Chairman John Bond was retiring in May and would be replaced by Chief Executive Stephen Green.
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