GE Asset Management promoted two members of its fixed income investment team. Katy Rossow is now head of fixed income and Eric Gould is the new senior vice president and head of structured product investing. Rossow's responsibilities will include overseeing the investment research activities of more than 30 fixed income analysts while Gould will be responsible for identifying and leading new opportunities for growth within the group. Rossow, who has been with GEAM for five years, brings over 25 years of industry experience in the banking and finance sectors. Meanwhile, Gould has been with GEAM for seven years specializing in ABS and CMBS. He has over 17 years of industry experience. Both promotions coincide with a realignment of GEAM's fixed income resources designed to drive investment performance and to grow assets under management.
James Douglas, Vermont's governor, signed a state law last week that allows securitized transactions by captive insurers. Securitization using a reinsurance captive will permit companies to optimize their balance sheets by transferring certain risks to capital markets, reports said. This area's growth was driven by life insurance companies looking for a way to finance life insurance reserves. "Securitizations are set to grow over the next few years, and with our new legislation, we feel Vermont will be an attractive jurisdiction for these types of transactions," said Leonard Crouse, Vermont's deputy commissioner of captive insurance. Vermont is the largest captive insurance domicile in the U.S. and the second-largest in the world in terms of gross written premiums, with $11.55 billion in 2006.
The Michigan Senate approved a measure to eliminate half of this year's $800 million budget deficit by selling its tobacco lawsuit settlement. The legislation passed 23 to 14 but will go back to the state House of Representatives because the Senate voted to securitize another $5 million after Democratic Governor Jennifer Granholm vetoed a $5 million reduction in advertising for the Michigan lottery. Sale of the tobacco lawsuit is intended to balance the budget without cutting funds to K-12 public schools, reports said. Critics call the tobacco securitization measure - approved by 14 Democrats and nine Republicans - a one-time budget fix. The deal will supply $415 million upfront to help with financial problems, but it forces the state to give up its rights to larger settlement payments in future years. The Senate has yet to vote on another bill that would make available up to $100 billion for college loans. Lawmakers and the governor reportedly have not yet started to deal with a potential $1.6 billion shortfall in the budget that starts Oct. 1.
Moody's Investors Service announced it will publish monthly enhanced monitoring reports for U.S. CRE CDOs. The reports will combine data from trustees, collateral managers and Moody's databases on an initial set of 26 commercial real estate transactions, Moody's said. The rating agency plans to expand its monthly coverage to all of Moody's-rated CRE CDOs by the fall of 2007. The agency is also seeking feedback from the market. The monthly report is available on Moody's Web site.
Fitch Ratings released a report last week on its upgrade and downgrade criteria for U.S. subprime RMBS/HEL. The surveillance process for the subprime RMBS is designed to maintain accuracy and timeliness of credit ratings by analyzing monthly trends in collateral and bond performance and movements in bond credit risk, the agency said. Fitch's surveillance includes automated acquisition of monthly remittance data, screening of monthly data, projection of expected losses, break-even cash flow and loss coverage ratio, issuer and server dialogue and review of proposed rating changes by the rating committee for upgrade and downgrade candidates. In the report, Fitch also documented its assumptions regarding prepayment, delinquency and loss projections.
Cadwalader, Wickersham and Taft moved its offices in Beijing last week. Its address: 2301 China Central Place Tower 2, No. 79 Jianguo Road, Beijing 100025 China. The firm can be reached at +86 (10) 6599 7200. Cadwalader, established in 1792, currently has offices in New York, London, Charlotte, Washington and Beijing.
Babson Capital Europe announced the close last week of a 500 million CLO, Malin CLO B.V. The fund will invest in senior secured and mezzanine loans and will include a 100 million multicurrency revolver that can be drawn to buy either euro or sterling loans. The blended triple-A tranche priced at 21 basis points over Euribor and the double-B tranche priced at 340 basis points over Euribor. The fund was approximately 75% ramped at closing. Goldman Sachs arranged the transaction with buyers that included European banks, asset and fund managers. At the end of May, Babson Capital Europe managed more than 5.9 billion in nine CLO funds, one mezzanine fund, one credit opportunities fund, two managed accounts, and two warehouses. The firm is a wholly-owned indirect subsidiary of Babson Capital Management and has been investing in the loan market since 2001.
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