Juliet Jones, a senior ABS analyst at Barclays Capital, is moving from the bank's securitization research group to portfolio management. Beginning Wednesday, Jones will manage Barclays Capital's multibillion-dollar ABS portfolio. She will report to John Porter, the bank's London-based managing director of portfolio management. For the last seven years, Jones was a senior analyst in Barclays' securitization research group, where she specialized in the U.S. consumer ABS assets, including credit cards, student loans and auto loans. Previously, she was an analyst in Standard & Poor's structured finance group, where she worked for seven years.
Bank of Tokyo-Mitsubishi UFJ is planning to launch an ABS trading platform by the first quarter of 2007. The bank is negotiating with several monoline insurers to buy wrapped paper to stock its startup ABS trading portfolio, and hopes to build the business into a $30 billion enterprise in about two years. To spearhead the new effort, Bank of Tokyo-Mitsubishi hired Martin Palmeri as senior vice president of structured credit and Sal Carvo as vice president and manager of its credit portfolio. Palmeri was a director at Dresdner Kleinwort Wasserstein, where he also worked in structured credit. He was also formerly at Ace Financial Services. Carvo, a former managing director at Athilon Structured Investment Advisors, was recruited last month. Previously, Carvo was a director at XL Capital Assurance. He also worked at MBIA. The bank expects to hire about two analysts in the coming months.
Deutsche Bank is bringing to market the second CMBS-backed CDO managed by Hyperion Brookfield Crystal River Capital Advisors, a unit of Brookfield Asset Management. The $439 million Crystal River Resecuritization 2006-1 is a below-investment grade static pool resecuritization with a rated final distribution date of September 2047. Roughly 36% of the collateral is more than a year old, with vintages from 2002 through 2006 present in the pool. The deal was structured in a standard sequential pay structure. The Crystal River group last November issued Crystal River CDO 2005-1, a $378 million cash flow deal backed by CMBS and RMBS. CDOs in the Crystal River program are a source of financing for Hyperion's Crystal River REIT.
Impac Mortgage Holding Inc. hired former Fannie Mae Senior Vice President of Portfolio Transactions Andrew McCormick as executive vice president, chief investment officer. The role is a newly created position at Impac, a Newport Beach, Calif.-based mortgage REIT. McCormick will oversee and direct all of Impac's balance sheet investment, hedging policy, pipeline hedging risk, interest rate risk management and securitization structuring. He will also chair the company's asset liability committee and become a senior member of the executive committee. McCormick was responsible for all on-balance sheet transactions at Fannie Mae, where he was employed for a decade. Prior to his role at the now troubled GSE, McCormick was vice president, fixed income securities at Morgan Stanley.
Bear Stearns has combined its debt and equity origination teams in Europe, as part of number of changes that are aimed at growing its business in the region. Michel Peretie will lead the combined efforts. Peretie previously chaired the firm's European headquarters in London before becoming Bear's European chief executive slightly over a month ago. Peretie has promoted Mark Moffat, head of CDO origination, to run the combined capital markets unit. Moffat, who is a senior managing director and was formerly at ABN Amro, would continue to run the CDO group. Morad Mahlouji and David Austin have also been promoted as co-heads of fixed income sales in Europe. Mahlouji was formerly head of interest rate derivative sales and Austin used to run credit product sales in Europe.
Citigroup plans to close next month an $810 million single-tranche CDO backed by a $1.4 billion portfolio of aircraft operating leases. The deal is likely the second single-tranche structure for portfolio aircraft securitizations to hit the market since the ACS 2006-1. In contrast to the ACS deal, there is no class G-1 minimum principal due for the first three years, followed by $12 million per year in the fourth and fifth year of the transaction - a feature that increases the deal's LTV ratio over its life, according to Standard and Poor's. The $810 million triple-A tranche notes are insured by Financial Guaranty Insurance Co. Genesis Lease Ltd. is the manager; PK AirFinance U.S. Inc., an affiliate of GE Capital Corp. will provide a $75 million credit facility to cover potential maintenance issues cause by borrower defaults.
Credit Derivatives Product Company Primus Guaranty Inc. is considering a move into CDS of ABS - pending rating agency opinion. Maintaining a high credit rating is of particular importance for derivative product companies, as it is an essential element of acting as a counterparty. Primus, one of only several such companies on the market, said last week that it invested in fewer credit default swaps during the third quarter because of disappointing risk/return ratios. The company entered into $525 million in contracts referencing corporate and sovereign bonds in the quarter, down from $1.6 billion a year earlier.
CIT Group is planning to enter the CLO market next year. The move is part of CIT's overarching plan to increase focus on lines of business that generate fees. Countrywide Financial Corp., also in search of fee-related revenue recently announced similar intentions to enter the CDO market. CIT holds roughly 76% of its loan and lease volume on balance sheet, while about a quarter is sold or syndicated.
New Century Financial Corp. is planning to acquire the servicing unit of Irwin Mortgage. The Irvine, Calif.-based subprime mortgage lender, which operates as a REIT, expects the transaction to close in January. New Century last week said the acquisition will help to expand servicing expertise into the prime and Alt-A lending sectors. Both mortgage lenders reported third quarter earnings last week. New Century reported a 2.5% decline in mortgage originations from the previous quarter and projected a 10% decline for 2007. Irwin Financial, which reported a 30% year-over-year drop in earnings, has sold nearly its entire conforming mortgage origination platform. Irwin's home equity platform lost some $300 million in the fourth quarter and $400 million in the third.
After hitting a rough patch last year, the U.S. prime auto sector is expected to display strong performance through the remainder of the year, according to Standard and Poor's. Taking a queue from the mortgage market, nonprime and subprime auto sectors, on the other hand, are showing higher losses for 2005 vintages compared to loans originated in 2004. Nonprime cumulative net losses are up 24% for the 2005 pools compared with 2004 deals, an increase S&P said last week could be attributed to riskier borrowers and longer loan terms. Another interesting note in the report - despite troubled corporate credit ratings, both Ford Motor Credit Co. and GMAC prime auto loan ABS transactions are performing above the average prime index.
Fannie Mae plans to price a benchmark REMIC this week. Lehman Brothers, JPMorgan Chase Securities and UBS Securities will joint lead manage the deal. According to a Fannie Mae release, this guaranteed maturity class will be brought to market via a traditional dealer syndicate process.
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