UniCredit Group's markets and investment banking division has hired Shawn Pierce as a vice president in its U.S. asset-backed finance group. Pierce will be structuring conduit and term transactions and reporting to group head Robert Fleisher.
Michael Antonicelli has joined Fortis Investments in New York as an ABS portfolio manager reporting to Maryam Muessel, global head of structured credits. In his new role, Antonicelli will be responsible for managing the group's structured credit portfolio. Prior to joining Fortis, the new hire was with WestLB as an executive director (holding roles in the bank's investment management unit and former portfolio management unit) for four years, with MBIA/CapMAC for eight years, and with GE Capital for approximately 10 years.
Fremont Investment & Loan last week sold $4 billion of its subprime mortgage loan portfolio to an undisclosed buyer. The company will take a pretax loss of roughly $140 million on the deal. The buyer paid Fremont $950 million in cash from the first sale installment under the agreement, and the remaining sales are expected to take place over the next several weeks. Fremont, under regulatory scrutiny, earlier this month announced it was exiting the subprime lending business.
Last week, one of the embattled subprime mortgage players, Accredited Home Lenders, said it had secured a $200 million term loan from Farallon Capital Management, a San Francisco-based hedge fund that has a 7.8% stake in the mortgage lender. The much-needed capital infusion didn't come cheap, however, as the five-year term loan carried an interest rate of 13% per year. In other subprime developments last week, $12 billion hedge fund Citadel Investment Group said it had taken a 4.5% stake in Accredited, a move that follows its $22 million acquisition earlier this month of certain assets of ResMAE Mortgage Corp., which filed for bankruptcy in February and cut 100 jobs last week.
Newcastle Investment, a REIT managed by hedge fund Fortress Investment Group, agreed last week to buy a $1.7 billion portfolio of approximately 7,300 subprime mortgages, despite the current turmoil in the sector. The firm is conducting due diligence on the portfolio and expects to close the acquisition within 30 days. A spokesperson at Fortress declined to comment on the transaction or name the company from which it is buying the loans. Newcastle's recently appointed CEO Kenneth Riis said in a statement that the constrained liquidity and the repricing of credit risk in the subprime mortgage market have created a unique opportunity for the firm to purchase the subprime portfolio at an attractive price with early-payment default protection. "We have underwritten this investment to generate an attractive return on capital using conservative default and loss assumptions," Riis said.
Global risk and reinsurance specialist Guy Carpenter created the European solutions group and appointed Laurent Dignat as senior vice president. Dignat will integrate the company's capital market, structured risk and enterprise risk management divisions in those markets. He joins Guy Carpenter from Societe Generale, where he led the alternative risk-transfer initiative within the firm's equity derivatives department. Within SocGen's financial institutions team, Dignat specialized in developing innovative hedging and risk-transfer solutions.
Luminent Mortgage Capital hired Dimitrios Papatheoharis as senior vice president and chief investment officer. Papatheoharis, who will be starting at the firm next month, has 11 years of experience in the mortgage sector, with specific expertise in U.S. and international MBS, ABS, CDOs, CLOs, synthetic regulatory capital transactions and credit derivatives. The new hire was previously the senior vice president in capital markets at the Radian Group. At Radian, he led the first securitization of Mortgage Insurance exposure (SMART HOME) as well as structured more than $14 billion of securitized transactions.
PMI Europe plans to begin providing Deutsche Genossenschafts-Hypothekenbank AG, Hamburg (DG HYP) with mortgage insurance. This would enable the German lending institution to offer high loan-to-value financing in the German market. The "immo spezial" mortgage loan is designed to enable private customers with good credit to fully finance their property, including acquisition costs, where necessary. DG HYP said it intends to reach more self-employed borrowers with the immo spezial. DG HYP specializes in real estate finance that distributes loan products through the approximately 1,250 German cooperative banks, which have branches throughout Germany and that serve more than 30 million members.
Fitch Ratings last week published its first issue of Operational Risk Grapevine. The newsletter discusses trends and "hot topics" within the origination and servicing community, and their impact on the EMEA structured finance industry from an operational risk perspective. Fitch said that the growth of MBS transactions throughout Europe, along with their expansion into new markets such as Eastern Europe, Central Asia and the Middle East, has increased the focus on operational risk and those parties managing such risks. The inaugural issue of the newsletter included articles on how this risk relates to mortgage servicers as well as overviews of the European RMBS and CMBS servicer round tables held in December 2006, the growing emergence of title insurance across Europe and the impact of Law 231 on Italian servicers.
DBRS published a research report last week where it predicts that Europe might be on the verge of a turning point. Analysts at the agency said that the recent slide in the dollar and in U.S. property prices could lead to deterioration in the performance of transactions. This, combined with the implementation of the new Basel II capital rules for banks, will reshape the investor base and the product offering. European new investors such as hedge funds, pension funds and insurance companies are likely to lead the repricing of subordinated pieces of deals, leading to changes in the way whole structures are priced, DBRS analysts wrote.
Principia Partners, a software provider for the management and administration of structured finance operations, has been chosen in the risk management and reporting of Channel Capital PLC, a new Irish Credit Derivative Company (CDPC). The software system will manage transactions from deal capture and risk management through compliance reporting. Channel Capital will write credit protection on triple-AAA rated tranches of portfolios of corporate and sovereign obligors. The software supports the Irish CPDCs eligible investments, liabilities and hedging derivatives as well as a complete range of first- and second-generation credit derivatives, including single-name credit default swaps (CDS), basket swaps, CDS on structured finance securities and single-tranche CDOs.
Barclays Global Investors' introduced a mortgage-backed ETF recently. The iShares Lehman MBS Fixed-Rate Bond Fund started trading on March 16 on the American Stock Exchange. The fund's underlying index measures investment-grade, fixed-rate MBS performance. The new fund's annual expense ratio is 0.25%, according to news reports.
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