Ellington Management Group LLC could be a likely buyer of one, or several, of Orange, Calif.-based ACC Capital Corp.'s subprime lending units, sources say. Depending on which parts of ACC it buys, a purchase would grant the Greenwich, Conn.-based fund manager a substantial subprime mortgage originator, although the company has considerably scaled back its originations. The manager already holds a substantial portion of Ameriquest residuals, according to one source. AmeriCredit Corp. last month bought ACC's auto lending branch Long Beach Acceptance Corp. for roughly $283 million. Ameriquest settled predatory lending allegations last year, agreeing to shell out $325 million. Several months later, the lender announced a "reorganization" of its retail unit that would result in the loss of 3,800 jobs and 229 branches. JPMorgan Chase & Co., which ACC hired to handle the sale of Long Beach, is reportedly handling the prospective sale of Ameriquest and Argent.
Troubled subprime lender Mortgage Lenders Network USA is looking to sell its subprime servicing platform, a source says. The Middletown, Conn.-based lender stopped funding new loans last week, when it said it was exploring "strategic alternatives" to its wholesale lending business.
Thacher Proffitt & Wood LLP has hired William "Butch" Cullen, Janet Barbiere, and Bola Oloko as partners. The new hires join the structured finance practice group based in New York focusing on CMBS and are making a homecoming. All three partners were previously at Thacher before they joined the New York offices of Sidley Austin LLP, where they were partners as well. Cullen's practice focuses on securities and corporate finance, with an emphasis on the securitization of financial assets. Barbiere's practice focuses on CMBS, secondary commercial mortgage finance and corporate finance. Meanwhile, Oloko will advise financial institutions in the financing, purchase and sale, and securitization of financial assets, particularly commercial mortgage assets. Bola has been involved in many pioneering structured finance transactions, including one of the earliest transactions involving the securitization of loans in a "split loan" structure.
American Securitization Forum has chosen Elizabeth McCaul, formerly the superintendent of banks for New York state, as keynote speaker for the ASF 2007 conference. McCaul is a partner with Promontory Financial Group. While serving as banking superintendent, McCaul was chairwoman of the Conference of State Banking Supervisors from 2001 to 2002, was a member of the FFIEC from 2002 to 2003, participated in the Joint Forum for Financial Conglomerates, and was an instructor on corporate governance at the Financial Stability Institute at the BIS. From 1985 to 1995, she was an investment banker at Goldman Sachs.
Assured Guaranty (UK) Ltd., the London subsidiary of Assured Guaranty Corp., appointed Craig Lee as managing director to develop the firm's business in the Asia Pacific and Australian region. Lee reports to Marc Bajer, managing director, international of Assured Guaranty (UK) Ltd. "We are excited to have Craig on board. His expertise and long-standing relationships throughout the region will help Assured Guaranty successfully continue to build our global presence in key markets such as Asia and Australia," Mike Schozer, president of Assured Guaranty Corp., said. Lee has more than 20 years of experience, including previous roles in Tokyo, Singapore and Sydney. Before joining Assured Guaranty, Lee was the general manager, front office at Sumitomo Mitsui Banking Corp. in Sydney, Australia. He was responsible for the bank's major financing operations, including corporate, structured and project finance.
Two senior capital markets bankers left Bank of America as part of a reorganization of the firm's equities and structured finance units. The departures happened after BofA combined its equity financial products business at the end of last year. This unit includes equity derivatives, convertible debt and prime brokerage with its cash equities division. Chris Innes, who was global head of equity financial products, has reportedly left the bank, while Peter Forlenza who used to run cash equities, will be in charge of the combined businesses. Chris Hentemann, who was previously co-head of global structured finance, will become global head of structured products, with responsibility for MBS and CDOs. Pat Augustine, formerly global head of structured products, has also left BofA.
Deutsche Bank and AXA Investment Managers (AXA IM) have established a new credit derivative product company (CDPC) named NewLands Financial. Deutsche Bank has committed $125 million in equity to set up the independent, bankruptcy-remote CDPC. This amount, along with further debt financing, will define the capital base of this vehicle, expected to be rated triple-A. The CDPC will sell credit protection on default remote corporate credit risk using highly rated CDOs, and might expand into other asset classes. The ratings of the CDOs will be predominantly in the junior super senior and super senior category with a small bucket for triple-A rated tranches. AXA IM's primary role will be to provide portfolio management services while Deutsche Bank will provide essential risk management, infrastructure and operational services.
Word has it that investment banks involved in the debt funding for the $36 billion buyout of Equity Office Properties are considering putting together a $10 billion CMBS deal to help finance the transaction. A deal could come to market by the end of January, said sources familiar with the situation. Blackstone Group announced last November that it would buy the REIT, which owns about 580 buildings in the U.S. In recent SEC filings from Equity Office Properties, Bear Stearns, Bank of America, Citigroup Global Markets, Credit Suisse Group, Deutsche Bank, Goldman Sachs Group, Morgan Stanley, and Wachovia Corp. were named as the banks hired to arrange debt financing for the leveraged buyout, anticipated to be the largest ever.
Deutsche Bank AG announced last Wednesday that it completed the purchase of mortgage lender MortgageIT Holdings for $430 million. Deutsche Bank last July agreed to buy MortgageIT Holdings for $14.75 per share in cash. The bank said it bought MortgageIT because it wanted to "vertically integrate" its MBS business.
As a result of the merger, Doug Naidus, MortgageIT's chief executive, will become a managing director and head of mortgage origination in Deutsche Bank's RMBS group. Deutsche also bought Lake Forest, Calif.- based subprime lender Chapel Funding LLC in September.
Barclays Capital launched its quarterly publication, the European ABS Anticipator last week. The new product provides investors with a top-down relative value monitor and a bottom-up relative value ranking of bonds within each ABS sector. The analysis examines all ABS sectors that Barclays covers. An overall risk ranking is determined and compared with a weighted average spread. Barclays said it plans to incorporate more forward-looking spread and risk criteria for each of the sectors the bank looks at. Based on its top-down analysis, researchers at the bank said they expected CMBS to remain a good relative value sector in 2007.
Commerzbank analysts released their predictions for European covered bonds growth this year. For 2007, they said they expected market growth to run above 20%, with an aggregate volume of new jumbo prints forecasted at over 200 billion ($261 billion). Spain is slated to lead issuance volume again this year and issuance from Germany will remain largely stable. Analysts also said they expect increased issuance from the U.K., Portugal and Scandinavia. Italy is also said to joining the mortgage covered bond arena.
AmeriCredit Corp.'s operating subsidiary has completed the purchase of Long Beach Acceptance Corp. for $282.5 million cash. As part of the merger, the auto finance subsidiary of Orange-based ACC Capital Holdings will be a stand-alone subsidiary of Fort Worth-based AmeriCredit and will continue to be headed by President and CEO Stephen Prough. The cash transaction was announced last month.
According to Morgan Stanley, issuance of SME ABS reached $40.6 billion in 2006, a 27% increase from the $32 billion issued in 2005. The performance of this transaction remains stable and analysts said they expected further growth in 2007. They also predicted potential for growth in Portugal and Italy, due to the significant market availability of SME loan portfolios. "Securitization of SMEs offers banks relatively efficient capital relief under Basel II as the relative capital charge for a bank's SME lending is higher than for many other assets, e.g., residential lending," Morgan Stanley analysts said.
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