RiverSource Investments, a unit of Ameriprise Financial, has hired Todd White as structured assets sector team leader. White will be a portfolio manager for the following retail and variable portfolio (VP) funds: RiverSource Diversified Bond Fund, RiverSource VP Diversified Bond Fund, RiverSource Limited Duration Bond Fund, RiverSource Short Duration U.S. Government Fund, RiverSource VP Short Duration U.S. Government Fund, RiverSource U.S. Government Mortgage Fund, RiverSource Balanced Fund and RiverSource VP Balanced Fund. He brings to the company over 22 years of experience in fixed-income investing, specializing in MBS, ABS and interest rate trading. Before joining RiverSource Investments, White was managing director and global head of MBS and ABS as well as North American head of interest rate trading at HSBC. Before that, he spent 18 years at Lehman Brothers, most recently as managing director and head of the residential mortgage and option businesses.
bfinance, an independent specialty financial services consulting firm, announced it will open an office in Milan, Italy before the end of 2008. This location will be used to focus its business on the Italian market. The investment management selection business servicing institutional investors in Italy will still be managed by Ottavia Sebastiani, director in business development, while newly appointed Daniela Zatti, who is also a director in business development, will be responsible for helping to develop the firm's commercial bank relationship advisory and cash management optimization businesses. Zatti joined bfinance from Intesa SanPaolo, corporate and investment banking division, where she was head of cash management sales. Other new appointments at bfinance include Preben Oye, director in business development for the Nordic Region. Oye recently joined the Northern europe team.
Genworth Financial hired Ronald Joelson as its new chief investment officer, with responsibility for managing Genworth's nearly $70 billion investment portfolio. Joelson comes from JPMorgan Asset Management in New York, where he was a managing director of insurance strategic markets coverage from July 2007 until Nov. 2008. Before that, Joelson held a number of financial positions at Prudential Financial in Newark, NJ, from 1984 to 2007. He spent his first 11 years there in private placements and structured finance. Immediately before being named Prudential's CIO, Joelson was senior vice president, financial management, helping design structures for demutualization of the company. From 2000 to 2007, Joelson served as Prudential's senior vice president and chief investment officer for asset liability and risk management, overseeing investment strategy and portfolio performance for the company's $230 billion general account.
The International Organization of Securities Commissions (IOSCO) addressed an open letter to the G-20 forum signed by Jane Diplock, Christopher Cox and Guillermo Larrain, chairmen of IOSCO's executive, technical and emerging markets committees, respectively. In the letter, IOSCO said that to resolve this current crisis, cooperation and coordination among financial regulators and policy makers - supported by the political will to make the necessary regulatory or legislative changes - are critical. Additionally, IOSCO offered its services on the grounds that its global reach and technical expertise are necessary to assist policy makers in developing and implementing common global regulatory solutions to the current crisis. The letter calls for a galvanizing of political will to ensure that the IOSCO principles are implemented in every country and every jurisdiction. It also notes that, in the face of the present crisis, it has become evident that regulatory gaps, particularly those posed by certain unregulated or under-regulated parts of the global market, will need to be closed, and states the IOSCO is the appropriate vehicle to achieve this. While financial regulatory structures remain national, consistent global solutions are desired by many, the organization said.
Principia Partners launched a new risk surveillance platform that addresses the industry's need for standardized accounting, sophisticated risk reporting and centralized control of structured finance operations. Principia SFP (structured finance platform) Version 6 provides a standardized suite of compliance reports and out-of-the-box accounting. The new platform enables structured finance portfolio managers within bank treasuries, off-balance sheet operations and investment funds to summarize and analyze real-time risk exposures across their organizations. The platform enables financial institutions managing ABS and MBS portfolios to gain greater workflow control and visibility into cash flows, risk and asset distribution, Principia said. It also delivers on-demand portfolio reporting across multiple entities and business units. Principia SFP's standardized risk sensitivity and compliance reports provide surveillance of the entire investment book of assets. The new platform also enables operations, in multiple locations, to effectively manage and hedge global risk exposure and establish control over structured finance portfolios, Principia said. The platform allows the 'slicing-and-dicing' of deal and portfolio information to meet rigorous internal compliance requirements.
Catastrophe risk modeling firm AIR Worldwide said that Katarsis Capital Advisors, a hedge fund that specializes in Insurance-Linked Securities (ILS), has licensed CATRADER, the industry standard application for analyzing catastrophe reinsurance and ILS. Using CATRADER, investors can easily manage a portfolio of catastrophe bonds, industry loss warranties and reinsurance contracts using a single analysis tool. CATRADER can be used to evaluate portfolios of reinsurance contracts, catastrophe bonds and other catastrophe-related instruments with a range of trigger types, including indemnity, index and notional portfolio-based triggers.
U.S. Department of Housing and Urban Development announced new Federal Housing Administration (FHA) mortgage loan limits for single-family homes under the Housing and Economic Recovery Act of 2008. Beginning Jan. 1, 2009, FHA will insure single-family home mortgages up to $271,050 in low cost areas, and up to a maximum of $625,500 in high cost areas. The February 2008 Stimulus Package temporarily raised the FHA maximum to $729,750 through Dec. 31. The new $625,500 maximum, however, represents a considerable rise over the $362,790 limit that was in effect before the Stimulus Package.
Moody's Investors Service is modifying the rating methodology it applies to structured finance securities wrapped by financial guarantors. If a structured finance security is wrapped, the Moody's rating will be the higher of the guarantor's financial strength rating and the current underlying rating (i.e., absent consideration of the guaranty) on the security, regardless of whether the underlying rating is published or not. If the rating agency is unable to determine the underlying rating or an issuer has requested that the guaranty constitute the sole credit consideration, the wrapped security will take the rating of the financial guarantor. Moody's plans to complete the majority of its review of all wrapped structured security ratings under this modified approach within approximately 60 days. Its previous approach was to rate the higher of the guarantor's financial strength rating and any published underlying rating. When a downgrade of a financial guarantor below investment grade happens, the rating agency's approach would be to withdraw the rating on an instrument that did not have a published underlying rating. To date, no rating has been withdrawn under this approach, as Moody's has been working with issuers to publish their underlying ratings. Moody's said it is not currently changing the rating methodology it applies for non-structured securities wrapped by financial guarantors.
Advisory firm Deloitte & Touche recently added a new tool to its CDO Suite software that allows business development companies and other loan originators, as well as loan administrative agents, to track a loan's terms, each lender's participation, and the borrower's drawdown and payment activity. It also helps automate the creation and delivery of notices to the borrower and lenders. Deloitte initially created the tool, as it often does with new products, at the request of a client - a buy side shop that also has a loan origination arm. The firm has now rolled out the tool to its full CDO Suite client base. Originally built in 2000 to support the CDO and CLO market, CDO Suite has evolved into a buy side portfolio tracking and compliance calculation system, which Deloitte clients use to track portfolios of ABS, bonds, CDS, equities and leveraged loans both in CDOs and CLOs, as well as in other types of nonsecuritized funds. Deloitte's CDO Suite clients include administrators, CDO/CLO collateral managers, and hedge fund managers, and the platform currently serves clients in North America, Europe and Asia. The CDO Suite team is led by Hillel Caplan, a partner at Deloitte & Touche in New York.
Pittsburgh Glass Works, which supplies glass to auto makers, has secured a $200 million asset-backed facility from GE to support its acquisition by Kohlberg & Co. It couldn't be determined if the facility will be marketed to investors, and calls to GE were not returned by press time. "In a challenging financing market, GE stepped up to support our acquisition of Pittsburgh Glass Works," Evan Wildstein, a partner at Kohlberg, said in a release.
The American Securitization Forum is working on a proposal that will allow MBS servicers to sell delinquent mortgages through the Treasury's Troubled Assets Relief Program (TARP). "We believe there is significant opportunity for TARP to purchase individual distressed loans out of mortgage-backed securities trusts, which would give the Treasury Department unlimited discretion to modify the loans," ASF Deputy Executive Director Tom Deutsch told the House Financial Services Committee. The idea comes in the wake of an announcement by the Treasury Department that it likely will not be spending much money on buying troubled mortgage assets after all. Deutsch said that whole loans in securitized trusts are not usually sold because of legal, tax, and accounting constraints. However, the ASF is trying to work through those issues. "There are opportunities and obstacles for servicers to sell individual distressed loans at discounts to Treasury," he said. "We expect to report out some initial progress on this initiative at the end of this week."
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