Alexander Rekeda joined Guggenheim Capital Markets as managing director and head of CDOs, effective last Monday. Rekeda was previously head of structured credit, for the Americas at Mizuho Securities, which he joined in November 2006. Mizuho dismissed its entire CDO underwriting group in mid-December 2007, including Rekeda as well as 13 others, who had all left Calyon for positions at Mizuho only one year earlier. Rekeda had built up the cash CDO business at Calyon, where he had been since July 2004.
The COO and President of Countrywide Securities Corp., Grant Couch, is said to be retiring from the firm.
Merrill Lynch recently parted ways with two more members of its structured finance team. Malay Bansal, a managing director who led the CRE CDO group, left the investment bank, as did Keira Reich, a trader who worked in the bank's whole loan group.
Former Credit Suisse director Jonathan Clark joined SLM Corp. as a senior vice president of corporate finance. Clark will lead the company's unsecured debt issuance and treasury operations. He will also assist the ABS team, according to a company statement. Clark was part of a recruitment haul at Credit Suisse in 2000, when the investment bank appointed Joe Donovan and Greg Richter, among others, to its asset finance group. Clark also worked at Prudential Securities, First Boston and Dean Witter. The student lender also hired John Hewes as executive vice president and chief credit officer, a role in which he will oversee the company's private student loan underwriting policies and credit risk management. For the last 22 years, Hewes led the consumer finance and business lending divisions at MBNA, one of the world's largest credit card issuers.
Katten Muchin Rosenman has hired Eric Adams and Hays Ellisen as partners in its structured finance and securitization practice. Before Katten, both attorneys were at McKee Nelson.
Dechert has laid off 13 associates in its finance and real estate group. The associates were offered three options: to accept the severance package; to stay 60 days in another group and then take the severance or to stay in a new position; although there is no guarantee on the length of stay in that position. Under the third option, some of the associates could end up permanent, but if they stay longer than 60 days, the current severance package does not apply.
The Churchill Financial Group announced several promotions last week. Thomas Hennigan will move into a senior vice president position; Sean McKeever and Eric Wieczorek have become vice presidents; Michael Krafft has become a senior associate; George Parry was promoted to associate; and Peter Hennessy and Andrew Maria have become senior analysts. Before joining Churchill, top appointee Hennigan was responsible for underwriting and portfolio management at GE Corporate Financial Services within the global media and communications group as well as the global sponsor finance group. McKeever joined Churchill from Comerica Bank, where he was responsible for structuring, underwriting and managing leveraged debt financings and was instrumental in the start-up of the leverage finance practice. Wieczorek joined Churchill from Praesidian Capital, where he was involved in the origination, structuring, execution and monitoring of mezzanine debt investments.
Venable has hired Joseph T. Lynyak III as a partner in both its Los Angeles and Washington, D.C., offices. Lynyak, a former member of the FDIC Honors Program in Banking Law, has extensive experience in retail banking, focusing on matters relating to mortgage and subprime lending and fair lending. He also advises on bank-operations issues, including federal preemption and strategic planning. Lynyak moves to Venable from financial services law firm Buckley Kolar, where he practiced in its Los Angeles and Washington, D.C., offices.
Cohen and Co. started marketing Emporia Pure CLO, a fund made up 100% of first-lien loans with no covenant-lite or second liens, according to sources. The company declined to comment on the fund.
Carlyle Capital Corp. announced last Wednesday that since filing its annual report on Feb. 28, it has been subject to margin calls and additional collateral requirements totaling more than $60 million. Until March 5, Carlyle had met all of the margin requirements imposed by its repo counterparties. However, on March 5, the firm received additional margin calls from seven of its 13 repo counterparties that exceeded $37 million. Carlyle has met the margin calls from three of these financing counterparties, the firm said in a release, but did not meet the margin requirements of the four others. From this group, one notice of default has been received by Carlyle, and it expects to receive at least one additional default notice. The firm as of last month had a $21.7 billion investment portfolio of AAA'-rated, floating-rate MBS issued by Fannie Mae and Freddie Mac, according to published reports.
Last week DBRS announced that it is expanding its U.S. structured finance market services by providing credit assessments. These will cover a variety of asset types and allow institutions to value market risks in their portfolios, the rating agency said in a statement. "What it means is we are expanding our ability to provide credit assessment to our clients," said Michael Nelson, managing director in U.S. structured finance at DBRS. Nelson said that DBRS is aiming to provide portfolio assessments even for institutions not planning to securitize the assets on their balance sheet. This means, according to Nelson, that this service is also good for firms that are not traditionally players in the ABS market, including banks and broker dealers.
Irwin Financial Corp. said last Monday that its board voted to suspend the Indiana-based company's quarterly dividends. "During the last two years, our dividends have exceeded our earnings," Chairman and CEO Will Miller said. "Until we return to normal levels of profitability, that is neither a sustainable nor wise strategy." Miller added that as a result of the further deterioration and credit costs in the company's home equity and commercial banking portfolios in 2008, the current results are likely to be weaker than previously expected. "But we are confident that we will remain within our policy of maintaining 12% or greater risk-weighted capital at Irwin Union Bank and Trust," Miller said. To lower its risk exposure, Irwin has taken to tightening the underwriting guidelines for each of its portfolios. Additionally, the company's home-equity unit has recently stopped making second mortgages above a combined LTV of 95%. "We will continue to manage the size of our balance sheet with an eye toward maintaining good capital ratios," Miller said in the company statement.
Fremont General Corp. said last week that it received default notices on about $3.15 billion of loans it sold in March 2007. The Brea, Calif.-based bank has received notices from two investors who bought the mortgages that said Fremont violated sales terms when its tangible net worth dipped to less than $250 million. The mortgage firm expects its tangible net worth will be below $250 million when it reports 4Q07 financial results. The company said it might need to record write-downs and add to reserves for the quarter, which will further reduce its net worth. Both Moody's Investors Service and Standard & Poor's cut their ratings on Fremont as a result of a deferred dividend as well as weak liquidity. Moody's cut its rating to Ca' from Caa3' and S&P cut Fremont General to CCC-' from CCC+.'
Moody's Investors Service downgraded and left on review for downgrade nine classes of notes issued by market value CDO Westways Funding XI. Moody's noted in a release that while the underlying assets are composed of agency and non-agency Aaa'-rated MBS, the market's illiquidity for this asset class has created a lot of uncertainty about the assets' valuation. The rating agency has seen continued deterioration in the rated notes' credit enhancement levels because of the rising difference between the marked-to-market values of the underlying assets and realized sales prices and continued price dips in the collateral portfolio's market value in recent weeks.
MGIC Investment Corp. plans to issue additional shares of common stock to help it raise capital as the mortgage insurer faces rising claims and payouts. The Milwaukee-based firm said in a filing with the Securities and Exchange Commission last week that it is not yet sure how much of its common stock will be offered. The money raised will be used to increase the volume of its insurance business and for general corporate purposes, the firm stated in the SEC filing. The insurance company might also raise new capital through other forms aside from offering common stock. MGIC will decide on the size of the stock offering and the alternative ways of raising capital in the next few weeks.
Walnut Creek, Calif.-based PMI Group expects to report a loss exceeding $250 million for 4Q07 as more missed payments on mortgage loans have forced the mortgage insurer to pay more claims, the insurance firm said last Monday. PMI has delayed the filing of its annual report because it is still trying to figure out how much its stake in Financial Guaranty Insurance Co. is. PMI Group expects to post a $236 million loss in its U.S. business as a result of higher claims.
Ginnie Mae said that pools backed by the Federal Housing Administration's (FHA) temporary, high-balance loans will be ready for April 1 issuance. The agency will create a new multiple-issuer security under the Ginnie Mae II MBS Program to accommodate these loans. "We believe it's important that Ginnie Mae support the stimulus package and create a vehicle that will improve market liquidity as soon as possible," said Thomas Weakland, Ginnie Mae's acting vice president in a company release. "This new security will enable more borrowers to qualify for safe, affordable FHA-insured loans, which is critically important as the mortgage industry continues to navigate the ongoing market upheaval." All single-family loans exceeding FHA's current loan limit of $362,790 will could be included in the new pools. According to the firm's release, issuers can start submitting pools on March 24 for the April 1 issuance.
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