Michael Strange left the financial institution securitization group at Barclays Capital to take up a position at Goldman Sachs, according to sources familiar with the matter. A Goldman rep declined to comment. At press time, it was unclear when Strange, who helped build Barclays' presence in Russian existing assets, would start his new job. Whether Strange will switch to a different area at Goldman or ramp up its business in Russian securitization was another open question. At least publicly, Goldman hasn't been a player in the space of Russian securitization, though sources said the bank had a sizable Moscow office, making a significant dent in other areas of the Russian finance market. At Barclays, Strange was involved in arranging such transactions as mortgage deals for Gazprombank with euro and ruble tranches and a dollar RMBS for Vneshortgbank .
Raiffeisen Zentralbank (RZB) has appointed Mark Bowles as general manager of its London branch. Bowles joins RZB from Bayerische Hypo und Vereinsbank, London, where he was head of the fixed-income investment portfolios group. He was previously head of structured finance at Bank Austria Creditanstalt London. Bowles' role at RZB London branch will continue to have an involvement in the distribution of structured products.
Societe Generale appointed Diony Lebot as chief executive officer for SG Americas, based in New York, after Jean-Jacques Ogier retired. As CEO, Lebot is responsible for overseeing the activities of Societe Generale Corporate & Investment Banking in the U.S., Canada and Latin America. She is also part of the Societe Generale Group Management Committee. Lebot joined SG in 1986 and has spent most of her time in the firm's structured finance businesses. In 1997, she was appointed deputy head of the financial engineering department covering securitization, financial engineering and leasing before she became global head of asset finance in 2001. She was appointed head of European coverage for the firm's corporates and institutions division in Sept. 2004 and was a member of SG Corporate & Investment Banking's executive committee at the end of 2006.
Cleveland-based KeyCorp said last week it expects to announce layoffs in the next two to three weeks, according to published reports. The firm did not specify how many jobs or where it will cut. KeyCorp, which reported third-quarter earnings that were less than analysts' expectations, employs 19,000 employees.
Wells Fargo Corporate Trust, a third-party master servicer, is expanding its menu of services. Under the loan and fraud review menu, the new line up of services includes fraud detection and analysis, full re-underwriting of origination files, repurchase administration, collateral analysis, examination of loan servicing history and contractual document evaluation. Wells Fargo also developed a collateral risk manager (CRM) service that allows its clients to carry out intensive loan surveillance in ways that are not widely practiced. One aspect of the service will allow users to retrieve details on loan performance on payment dates. Also, the service will allow clients to carry out this close monitoring using Web-based software.
New York Mortgage Trust (NYMT) received a $20 million investment from JMP Group last week in the form of convertible preferred stock. The investment will be used to purchase agency MBS and other mortgage-related investments, the firm said. In addition, James Fowler, a managing director of subsidiary JMP Asset Management, will become non-executive Chairman of NYMT when the investment closes in the next 30 days. NYMT's Board of Directors will be restructured to reduce costs, the company said. Directors Steven Schnall, Mary Dwyer Pembroke, Jerome Sherman and Thomas White will all leave the firm when the deal closes. Chief Executive Officer and President of GreenPoint Mortgage Funding, Steven Abreu, has agreed to be nominated to serve on the Board of Directors and fill one of the open spaces. He has been a member of Fannie Mae's National Advisory Council and the Residential Board of Governors of the Mortgage Bankers Association.
Cerberus Capital Management terminated its plan to purchase H&R Block's mortgage subsidiary Option One, which recently stopped accepting mortgage applications. H&R Block said it will lay off approximately 620 employees, close three offices and take a $75 million restructuring charge in shutting down lending at its mortgage originator. Option One said it will honor $30 million worth of existing commitments, most of which are conforming loans, and sell the rest to investors.
Moody's Investors Service said last week that after additional analysis of MBIA's direct RMBS portfolio, it has determined that "the guarantor is at greater risk of exhibiting a capital shortfall than previously communicated," an event Moody's considers "somewhat likely." The rating agency's analysis on MBIA will be completed in two weeks. In prior research, Moody's identified five monolines as being the most vulnerable to the deteriorating performance of RMBS, namely: CIFG, FGIC, SCA, AMBAC and MBIA.
Impac Mortgage Holdings said last week that on Nov. 28 the company was notified by the NYSE Regulation that it is not in compliance with the New York Stock Exchange's continued listing standard that relates to maintaining a consecutive thirty day average closing stock price of over $1.00 per common share. On Nov. 27, the Maryland-based firm's thirty day average price was $0.91 per common share and its absolute closing price was $0.69 per common share. Under NYSE rules, Impac has six months to bring its share price and average price back above $1.00.
American International Group (AIG) said that its direct investments in RMBS dropped in book value by roughly 2% in 4Q07 through November. At an investor presentation in New York last week, AIG said that the change does not reflect a considerable dip of its investment portfolio. Projected losses on RMBS portfolio valued at $96.86 billion as of Sept. 30 have risen roughly between $1.7 billion and $1.8 billion in 4Q07 to a total $4.6 billion to $4.7 billion. President and Chief Executive Martin Sullivan said that his firm does not rely on ABCP or the securitization markets for its funding since it has the ability to hold devalued investments to recovery. Most of AIG Investments' exposure to mortgages comes via direct investments in MBS rather than more exotic bonds such as CDOs, he added. Additionally, AIG does not anticipate losses on Nightingale Finance Ltd., the SIV it manages.
Markit agreed to buy SwapsWire, an electronic trade confirmation network for the OTC derivative markets. The acquisition should be completed in early 2008. SwapsWire was the first to market an automated service that enables market participants to complete trade date confirmation immediately upon execution, the company said. SwapsWire is owned by a consortium of 21 derivative dealers and employs 100 staff. It has offices in London, New York and Tokyo. Upon completion of the transaction, Markit will combine the SwapsWire confirmation capabilities with its trade processing workflow platform to provide the OTC derivative markets with a cross-asset trade processing solution with critical mass and a global network, Markit said. The platform will have over 200 buy-side institutions, 50 dealers and 45 inter-dealer brokers as clients. The newly combined business will be co-headed by Jeff Gooch, executive vice president and head of trade processing and valuations at Markit, and Chip Carver, CEO of SwapsWire.
The Securities Industry and Financial Markets Association (SIFMA) plans next year to launch a new database aimed at bringing greater transparency to the securitization market, according to reports. The online database will feature a range of structured credit products and should help avoid future liquidity crises. Items such as the terms of bond issues, including the exact nature of the assets backing them and delinquency rates, will be accessible by investors. The European Securitization Forum, an affiliate of SIFMA, will be in charge of drawing up the proposals for the global securitization database.
Emirates National Securiti-zation Corp. (Ensec), completed the first Shariah-compliant home finance securitization deal for mortgage lender Tamweel. Ensec worked with Morgan Stanley and Standard Chartered Bank as joint managers and bookrunners on the deal. The deal involved the first-ever issuance of various tranches of notes in an Islamic transaction and the first perfected sale structures in a securitization transaction from the UAE. The structure was backed by Ijara contracts (Ijara home financing contracts allow for the contract to be fully paid at any time without penalty and also allow for extra payments to be made once a year) worth $210 million. This issuance was divided into notes of four classes with a legal maturity in 2037 rated Aa2' by Moody's Investor Services and AA' by Fitch Ratings. Ensec is a specialized structuring and advisory boutique focused on the securitization and structured products arena of the international capital markets. The Tamweel securitization was the second transaction structured by Ensec and shows the ability of UAE-based institutions to tap into the international securitization capital markets.
Bill Gross, PIMCO's chief investment officer, released his monthly investment letter predicting a "tumultuous 2008" as the market struggles through problems in subprime mortgages. "The Fed needs to bring Fed Funds levels down steadily and significantly more in order to counteract the contraction of the shadow banking system which has imposed, and will continue to require, higher risk premiums for non-Treasury securities in an increasingly risky financial environment," Gross said. He believes the Fed would need to lower the Funds rate to 3% or lower to get banks and financial markets back on sound footing.
Freddie Mac released its quarterly Conventional Mortgage Home Price Index (CMHPI) last week. Similar to the previous week's report from the Office of Federal Housing Enterprise Oversight, prices declined 0.3% in the third quarter from the second quarter. This equates to an annualized decline of 1.3%, which Freddie said was the largest decline in 25 years. Year-over-year, prices have appreciated a meager 1.9%, down from 7.8% growth over the same period a year earlier. The largest price declines in the third quarter were recorded in the Pacific states (down 3.5% on an annualized basis), New England (-3.4%) and East North Central (-3.4%). The West South Central states saw appreciation of 4.8%, while the East South Central states recorded 3.4% growth.
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