Chapman and Cutler hired Kenneth Marin to be part of its recently opened New York City office. Marin is a partner in the firm's asset securitization practice. Marin has represented issuers, underwriters, investors and credit enhancers in securitization deals involving a diverse array of performing and distressed assets. He also has a substantial derivatives practice and helped pioneer the use of covered bonds in the U.S. Marin was previously at McKee Nelson, where he was a partner in the corporate finance department and co-head of the firm's covered bonds team.
Richard Gugliada, who was formerly the head of Standard & Poor's global analytics team and before that led the rating agency's CDO group, has landed at SecondMarket, which is a centralized marketplace for illiquid assets, including auction-rate securities, bankruptcy claims and illiquid blocks and restricted securities in public companies. Before S&P, Gugliada was with lender CIT Group and prior to that, was with the securitization practice at Citigroup.
Recent changes in the management of the securitization team at Moody's Investors Service have taken place. Mark DiRienz is now the sole group managing director for ABS at the rating agency, while Linda Stesney now serves as the group managing director for RMBS. Warren Kornfeld, who used to head up RMBS, is now handling special projects for the agency. Meanwhile, John Park, who most recently was part of the CDO group, is now managing director in asset finance surveillance at the agency, which forms part of Jonathan Polansky's group. Polanksy was appointed as structured finance global surveillance coordinator - a new role at the rating agency - last May.
Paul Burke is no longer with Ambac, where he was formerly head of fixed-income investor relations for the financial guarantee firm. Burke joined the monoline in 2005 and was initially responsible for business development and client relationship management in the structured finance area. Before joining Ambac, Burke was a managing director in the securitization business of JPMorgan Chase. He worked in Asia and Europe as head of JPMorgan's Asian securitization team. Prior to his stint at JPMorgan, he held several positions in the global ABS sector, such as head of emerging markets securitization at Standard Chartered Bank and, previously, leading the Latin American ABS team at Kidder-Peabody.
Chuo Mitsui Trust International, the global arm of Chuo Mitsui Trust and Banking, Japan's second-largest trust bank, is expanding its business to London. The firm will focus initially on offering investment services to institutional and multi-manager markets in Europe and the Middle East. The firm will also provide investors with a range of Japanese bond and equity investment strategies. The firm's cross-disciplinary approach is based on connected teams of portfolio managers, corporate, credit, quantitative and economic analysts, as well as traders and risk management professionals.
Amherst Securities Group, hired executives to expand its reach in securitized products. Joining the firm are Andrew Beal, managing director, agency CMO trading, and Kenneth Dinovo, senior vice president, agency CMO structuring and trading. Also joining the firm are Daniel Farrell, senior managing director, structured products group, and Mark Castiglione, managing director, structured products group. Beal, who will be specializing in secondary and new issue CMOs for Amherst, previously worked at Merrill Lynch for 12 years, where he traded CMOs with a focus on secondary and new issue fixed and derivatives. Dinovo, who will be responsible for structuring and trading CMOs for Amherst, previously worked at Merrill Lynch in the agency CMO area, where he traded new issues, ran the new issue business and served as head structurer. Farrell, the former founder of a venture capital firm, and Castiglione, a former hedge fund manager, will help develop Amherst's non-mortgage ABS and structured finance business.
Swiss Re's board of directors has accepted the resignation of Jacques Aigrain as chief executive officer. The reinsurance firm appointed Stefan Lippe, who is currently deputy chief executive officer and chief operating officer, as Aigrain's successor. Lippe has been with Swiss Re for 25 years. He was appointed a member of the firm's executive board in 1995 and was chief executive officer of the Bavarian Re group for 10 years. In 2001, he was appointed head of the property and casualty business worldwide and as a member of the executive committee. Starting in 2005, Lippe led Swiss Re's property and casualty as well as life and health underwriting activities. In September 2008, he was appointed to his most current position at the firm.
Wachovia Securities reported that the number of CLOs breaching their overcollateralization and interest diversion tests increased by 36% in January, as reported by ASR sister publication Bank Loan Report. The increase means that 125 of the 508 U.S. CLOs sold since 2002 breached these tests, up from 92 on Jan. 7, the Wachovia report noted. Overcollateralization tests require a CLO to have a certain mix of assets, while interest diversion tests require CLO managers to maintain certain interest payments to certain loan holders. More and more CLOs have been breaching these tests because there are more defaults and downgrades that are pushing the limits for what CLOs can hold. Once a CLO breaches its tests, it can slow down or shut off payments to lower-ranking investors. The bad news for CLOs will probably get worse, with Moody's Investors Service predicting that the global speculative-grade default rate will likely peak at 16.4% in November before falling to 15.5% by January of 2010. Calls to Dave Preston, the analyst who penned the report, were not returned.
Allen & Overy advised BNP Paribas on the structuring and establishment of a E15 billion ($19.3 billion) program of obligations foncieres, or French legislative covered bonds, issued by BNP Paribas Public Sector SCF. This program will allow BNP Paribas to refinance its portfolio of public sector assets through the issuance of obligations foncieres. The portfolio of benchmark assets is initially composed of loans for borrowers situated in no less than 11 different countries and backed by guarantees from four sovereign states (France, Germany, the U.K. and the U.S.). The transaction's structure is particularly flexible and innovative since it combines a true sale of the assets and a secured loan structure.
Loan losses on Northern Rock's Granite program reached £8.6 million ($12.4 million) in December, according to the latest servicer report. The report showed that the increase in losses was attributable to higher possession sales with a 10% reduction in possession stock during the month. Although seemingly large, the losses amounted to only 2.6% of the program's value. The total number of loans in arrears greater than three months rose to 3.35% from 2.7% in November 2008. This compares with a mere 0.53% in three-month-plus arrears back in December 2007, reflecting the current deteriorating economic conditions and rising unemployment in the U.K.
The official number of attendees at the American Securitization Forum's (ASF) just concluded conference was higher than expected. Total registration, according to official numbers from the ASF, reached 4,200, which is more than the upwards of 4000 initially expected. Most of the attendees were issuers and investors, which comprised 650 and over 1,300 attendees, respectively. The venue for next year's event was not officially announced. Talk at the gathering suggested that ASF 2010 might be held in Washington, D.C. because of the extensive role that the government is currently playing in trying to revive the securitization market.
Sens. Chris Dodd, D-Conn., and Carl Levin, D-Mich., introduced a credit card reform bill Wednesday that would rein in a slew of common practices in advance of hearing the Senate Banking Committee is holding on card consumer protection, as reported by ASR sister publication American Banker. The bill would put tight restrictions on how card companies increase interest rates and charge fees. It would prohibit card issuers from changing rates and terms any time for any reason. It would ban increasing interest rates on existing debt and would require a 45 day notice when rate changes were about to occur. It would prohibit companies from charging interest on penalty fees, bans double-cycle billing, and includes special protections for younger borrowers. The bill also calls for the Government Accountability Office to study the impact of interchange fees on consumers and merchants, and on creating a card safety rating system.
CIBC Mellon was appointed as custodian in the $32 billion restructuring of the non-Canadian, non-bank sponsored ABCP market last week. During the initial phase of restructuring, CIBC Mellon provided depositary services to facilitate the exchange of short-term ABCP for new long-term notes as called for under the plan. In its role as custodian, CIBC is responsible for the custody of asset pools held by the newly created trusts, including Master Asset Vehicles (MAV) I, II and III.
Deerfield Capital Corp.'s wholly-owned subsidiary, Deerfield Capital Management, was appointed as replacement collateral manager for Mayfair Euro CDO I B.V. by the deal's controlling class investor. The Mayfair CDO is backed primarily by euro-denominated investment grade and high-yield corporate bonds. As of Dec. 15,, the aggregate principal balance of the Mayfair CDO was roughly $117 million. The Mayfair CDO has a stated maturity of May 28, 2013, and is subject to customary early amortization provisions. With the Mayfair CDO, Deerfield currently manages 28 CDOs and has total assets under management exceeding $10.5 billion
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