Unicredit's markets and investment banking division has hired Dennis Conway as a director in its U.S. asset-backed finance group. Conway will be structuring conduit and term transactions and reporting to group head Robert Fleisher.
Deutsche Bank Securities added five professionals to its MBS research group, topping the appointments was directors Arthur Frank and Ying Shen, who join the company as head of agency MBS research and head of nonagency MBS, respectively. Frank was a director in Barclays Capital's mortgage strategy group, and before that he led MBS research at both Nomura Securities International and HSBC Securities. The new hire is also a full-time faculty member at the Wharton School of the University of Pennsylvania. Shen was head of credit trading modeling at JPMorgan Securities. Previously, he was chief credit modeler and co-head of the mortgage modeling group at Goldman Sachs. Based in New York, both report to Karen Weaver, global head of securitization research and head of research for the Americas. In addition to Frank and Shen, the bank hired Yan Dong, William Natcher and Jichun Wu as vice presidents. Previously, they worked at UBS, National City Corp. and Freddie Mac, respectively.
Morgan Stanley hired Anthony Meola to assist with the management of the firm's nonconforming mortgage operations. Meola came from New Century Financial, where he was executive vice president of loan production. Meola's duties at New Century included managing and expanding the company's national production franchise, broadening the mortgage product menu available for delivery through all loan origination channels, and increasing productivity to enhance New Century's competitive position.
Vanessa Spiro joined Jones Day as a partner in its New York office. She previously worked at Weil, Gotshal & Manges, where she was also a partner. Mark Sisitsky, co-chair of the Jones banking and finance practice, said that the firm is very pleased to receive Spiro, she will enhance the firm's strong banking and finance team as it grows internationally. Spiro's background leaves her with technical experience from her work on high-profile deals as well as valuable exposure to the evolving transactional finance sector, the company said. Spiro's practice consists of secured and unsecured financial transactions that include acquisition financings, cross-border transactions, investment-grade facilities, and restructurings and workouts.
Thacher Proffitt & Wood announced four promotions to partner - three new associates and one counsel. Aimee Cummo moves up in structured finance, with a focus on whole loan trading and financing and mortgage and asset-backed securities. Jerome Dano and Samuel Lee were promoted as associates in real estate, and Thomas Majewski moves to counsel in corporate and financial institutions. Thacher also announced two new hires who joined as counsels. Louis Evans and Trisha Smith, who join in the real estate practice group, will paint the firm green by spearheading an environmental practice. "Environmental legal challenges at the federal, state and local levels are important issues to our clients across the country," Don Simone, chairman of the real estate practice group, said in a recent release. The changes are effective October 1, 2007.
The National Association of Insurance Commissioners (NAIC) adopted amendments to the Viatical Settlements Model Act during its summer National Meeting in San Francisco last week. Specifically, the amendment imposes a five-year ban on the practice of selling a life insurance policy with specific elements indicative of what the industry calls stranger-originated life insurance (STOLI). These policies are often defined as life insurance policies specifically originated for settlement in the secondary market. Securitization industry participants fear that a ban would eventually diminish the flow of underlying assets for premium financing. NAIC's action, however, is not the final word. Individual state insurance commissions must implement the ban before it can be enforced.
NewStar Financial completed a $600 million term debt securitization of commercial loans. The deal was its third balance-sheet securitization since inception of the program. The notes issued in the CLO transaction were sold in a private placement and backed by a diversified portfolio of loans made by NewStar. The company will retain only BB- notes from its higher-rated notes of AAA through BBB that totaled $546 million. The transaction underscored the quality of the company's growing middle-market franchise and the value of its direct origination platform, said NewStar CEO Tim Conway.
Fitch Ratings finds delinquencies on a rise in mortgage insurance companies after it released its special report on recent trends in the business. An analysis contains data on recent originations, details on insurance in force, and performance trends of recent vintages accounted for all mortgage insurers rated by Fitch. According to the report, market concerns have been centered on 2006 vintage originations. Furthermore, there are lingering apprehensions that the problems in the subprime sector may spill into other sectors of the mortgage market. Fitch believes that the industry will be able to manage the operating environment over the term without ratings implications.
Separately, Fitch is revamping its rating methodology to address the potential for early overcollateralization in subprime RMBS deals, as a result of a failure to report poorly performing mortgage loans as delinquent. In an effort to prevent foreclosure, industry participants have paid increasing attention to loan modifications in order to make payments affordable to the borrower.
Effective August 2007, the rating agency will amend its rating criteria for U.S. subprime RMBS/HEL ABS to reflect this trend. Fitch's new strategy will incorporate risk of early overcollateralization, provide analysis of various loss timing and cash flow scenarios, and examine structural features within the securitization that may reduce the risk of overcollateralization from these modifications. New securitization ratings will factor in the potential impact of loan modifications and amend the definition of a "trigger event" to include modified loans in performance tests.
Aiming to provide practical guidance that creates a common framework for the structure and interpretation of loan modification, the American Securitization Forum issued a statement of principles, recommendations and guidelines for the practice at its annual meeting in New York last Wednesday. The statement contains an illustrative list of modifications, including changing the interest rate on a prospective basis, forgiving principal, capitalizing arrearages, extending the maturity date, and note limitations that the ASF says are sometimes imposed on loan modifications and documents governing securitization.
This includes documents governing securitization that promote greater uniformity, clarity, and certainty of applications and provisions through the industry. Loan modifications for subprime mortgage loans are important servicing tools that can minimize losses to investors and help some borrowers avoid foreclosure, the ASF said, adding that it is important to minimize foreclosure and preserve homeownership.
The statement puts a series of loan modification recommendations into action, which the trade association believes represent widely-accepted industry views based on its consultation with members and other securitization market participants.
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