Alec Crawford has joined Ziff Brothers Investments. Crawford was previously the head of MBS strategy at RBS Greenwich Capital. He left the bank in early December after more than three years (01/07/08). Before he was with RBS, Crawford served as managing director and head of mortgage and cross rates strategy for Deutsche Bank Securities. Before that, he was Morgan Stanley's chief mortgage strategist for about four years.
Ajay Rajadhyaksha is now sole head of U.S. fixed income strategy at Barclays Capital after Glenn Boyd, former co-head of the group, moved over to become the head of U.S. securitization research at the firm.
Ambac Financial Group announced that David Wallis will take on the newly created role of chief risk officer. In this new position, Wallis will be responsible for capital and risk analysis, portfolio risk management and credit risk management. Previously, Wallis oversaw portfolio and credit risk management. Reporting to Wallis will be Bob Selvaggio, who will head capital and risk analysis, and Cathy Matanle, who will head portfolio risk management. The credit risk management group will retain two distinct and separate focuses, one on public finance and the other on structured finance. U.S. public finance credit risk management will be headed up by Peter Cain, while Bob Bose and Rick Persaud will co-head structured and international finance. All three will report to Wallis. William McKinnon, the previous head of credit risk management, has retired, Ambac said. Peter Poillon is also leaving to pursue other opportunities, according to Ambac. Vandana Sharma will take on Poillon's role as head of investor relations. Sharma joined Ambac in 2007 from Barclays, where she was responsible for allocating counterparty limits and approving counterparty exposures for all monolines. Paul Burke will continue to oversee fixed-income investor relations.
GE Commercial Finance, Business Finance appointed Adam Johnson as managing director in corporate structured finance. Johnson is responsible for the leadership, direction and growth of the structured asset-based lending and cash flow business to U.K. and European corporates. He will also sit on Business Finance's senior leadership board. Johnson has been at GE Commercial Finance since April 2006, within the corporate structured finance division and has led several large transactions, including the 170 million ($251 million) securitization for Dana Corp. Johnson has worked in both risk and origination roles at Rabobank, Hill Samuel, Barclays and West LB, where he spent seven years.
Craig Lipsay, co-head of the strategic solutions group at Merrill Lynch, left the firm on Feb. 1, according to published reports. The strategic solutions unit sells CDOs. Lipsay was reportedly hired last March from Morgan Stanley, where he had been co-head of global CDOs.
Last week CapitalSource, a specialty commercial finance provider and issuer of commercial ABS, said it would continue to evaluate its merger with TierOne Corp., a thrift. A successful merger with TierOne would open up more funding options to CapitaSource outside of ABS. Although CapitalSource is able to obtain attractive spreads on what it considers to be high-quality assets, the company finds itself facing higher spreads for future securitizations, according to SNL Financial, a research firm. For the fourth quarter of 2007, CapitalSource reported that its overall borrowing spread to average one-month LIBOR jumped by 55 basis points from the prior period to 1.53%. CapitalSource Chairman and CEO John Delaney described widening credit spreads as the "new reality," and he predicted that spreads will be "similarly wide or wider" on forthcoming CapitalSource securitizations. He also cautioned that the company's credit facilities could reprice at higher levels, wrote SNL.
Bronstein, Gewirtz & Grossman filed a class-action lawsuit on behalf of purchasers of the common stock of MBIA for the period beginning Jan. 30, 2007 through Jan. 9, 2008. The firm alleges that MBIA and individual defendants - former Chief Executive Officer Gary Dunton and Chief Financial Officer C. Edward Chaplin - violated the federal securities laws by issuing false
and misleading financial statements, Securities and Exchange Commission filings, and press releases and by making false statements during investor conference calls. Bronstein Gewirtz said that MBIA misled its investors about the extent of its risk exposure to RMBS and, in particular, CDO squared securities backed by RMBS.
Oxford Funding Corp. said that its Oxford Opportunistic Mortgage Fund has agreed to purchase its first pool of mortgages. The hedge fund is still open and has not been fully subscribed, but a swift response from initial buyers will allow the fund to purchase a pool of mortgages with a principal balance of roughly $5.3 million, the company said. This hedge fund, which is open to accredited investors only, will be purchasing mortgages bought on the secondary market at considerable discounts with a strategy to hold, rehabilitate and liquidate the mortgage assets for profit.
ACA Capital Holdings last week said that it had secured a third forbearance agreement with its financial partners that remains effective until April 23. Under the agreement, ACA said its counterparties will waive all collateral posting requirements, termination rights and policy claims relating to the rating of ACA Financial Guaranty Corp. The extended forbearance period will allow the insurance firm and its trading partners to continue discussions to develop a lasting solution for its capital and liquidity issues. The company plans to work with its financial advisor The Blackstone Group, which it hired in December, to finalize the terms of a solution by the end of this period and proceed to closing as soon as possible.
Barclays Capital is creating a special business unit to oversee some of its poorly performing securities, including a large portion of mortgage-backed bonds, reported ASR sister publication IDD. The firm's chief, Robert Diamond, said that over the next few years it will be managing this and other client portfolios that are having trouble being liquidated and therefore "must be hedged, restructured and traded against the index." The special group has already been set up to manage the firm's subprime mortgage backed debt and will expand over 2008 and 2009. Diamond said he expects the new group to attract "clients who would like to have us provide risk management or financing."
KeyCorp said that it could write down approximately $65 million in investment-grade CMBS and similar loans in its trading portfolio as a result of widening credit spreads if market conditions continue to worsen through the end of the first quarter, according to a Securities and Exchange Commission filing. Through mid-February from the latter half of 2007, credit spreads on CMBS have continued to widen and remain volatile, the company said, attributing the trend to illiquidity in the CMBS market and investor concerns about the pricing of risk. As of Feb. 13, 2008, KeyCorp. held investment-grade CMBS with a face value of approximately $340 million, as well as roughly $115 million of other loans in its trading portfolio, that are also subject to fair value adjustments. In 2008, the company said it expects to experience net-loan charge-offs in the range of .6% to .7% of average loans.
Maryland Gov. Martin O'Malley announced emergency rules aimed at helping struggling borrowers who are in danger of having their homes foreclosed. The new regulations require loan servicing companies to notify the state when an adjustable-rate mortgage loan is about to reset to higher interest rates. This would allow the state to step in and help the at-risk borrower save his or her home. The rate of foreclosure has soared across the state, according to reports. The Washington suburbs have been hit hardest, with the number of foreclosures in Montgomery and Prince George's counties doubling between the third and fourth quarters of 2007. The number of foreclosure filings in Maryland increased to 9,722 last year from 7,001 in 2006, according to O'Malley. The state has also opened up a wide-ranging examination into Ocwen Loan Servicing, but did not provide details.
The first publicly sold European prime RMBS in 2008, E-MAC Program III Compartment NL 2008-I, priced last week. The GMAC-RFC Netherland transaction, arranged by the Royal Bank of Scotland and ABN Amro, offered 250 million in prime Dutch RMBS. At the triple-A level, the 1.3-year Class A1 notes priced at 89 basis points and the 3.2-year Class A2 tranche priced at 110 basis points, while the double-A-rated 3.2-year Class B notes priced at 200 basis points, the single-A-rated 3.2-year Class C tranche priced at 250 basis points and the triple-B-rated 3.2-year Class D notes priced at 450 basis points over the benchmark.
German bank IKB (A3-'/A+') was subject to a 1.5 billion recapitalization last week from KfW, which committed to subscribing to 1.25 billion ($1.85 billion) of the new shares in the company. This came with a promise of an additional 600 million of capital contribution to the bank's capital reserves. The remaining capital increase will be funded by a consortium of private sector banks. It's the third rescue line offered to the German bank, which also benefited from the government-backed, KfW-led bailout of 4.95 billion in August last year following subprime-related losses both on its balance sheet and through its off-balance-sheet vehicles, Rhinebridge and Rhineland Funding. Deutsche Bank analysts said that IKB is also one of the most prolific users of securitization, with deals outstanding that include Promise-I, Promise Mobility, Bacchus, Stability and the Force mezzanine loan series.
Accredited Home Lenders Holding Co. and its subsidiary, Accredited Mortgage Loan REIT Trust, announced the retirement of James Konrath as chairman and chief executive officer. Konrath has served in this position since co-founding the firm's primary operating subsidiary, Accredited Home Lenders, in 1990. Taking over as the mortgage firm's chief executive officer on an interim basis is Jim Moran, managing director of Hudson Advisors.
Sallie Mae disclosed in a Securities and Exchange Commission filing that it has extended the deadline for closing its current credit facility while it's working to finalize its announced financing plan. Under the extended agreement, Bank of America Corp. and JPMorgan Chase & Co. will extend the deadline for closing Sallie Mae's current $30 billion credit facility as it completes a new $35 billion facility, according to the SEC filing. The student lender expects the new financing facility to be completed by the end of this month.
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