Brian Clarkson, president and chief operating officer of Moody's Investors Service, has decided to retire at the end of July, according to a memo from the rating agency. He will be stepping down in order to make way for new management to lead the company through its current changes in response to market criticism. "Challenging credit market conditions, combined with Moody's role and function in those markets, have created scrutiny and criticism from numerous external sources about various aspects of our business," the memo said. Clarkson has also led the global structured finance, project finance, managed funds and public finance ratings businesses, as well as holding sales and marketing related positions in Moody's credit research and analysis products.
Replacing Clarkson, Michel Madelain has been appointed chief operating officer at Moody's. Madelain was most recently executive vice president of fundamental ratings at the rating agency, with responsibility for all global company and government ratings, including corporate finance, financial institutions, public finance and infrastructure finance. Previously, Madelain was senior managing director with responsibility for global banking. He also managed Moody's corporate ratings in Europe, the Middle East and Africa and held several managing director positions within the firm in the U.S. and the U.K. Before Moody's, Madelain was a partner in Ernst & Young's Auditing Practice.
Mark Adelson, formerly head of ABS research at Nomura Securities International, has been appointed as managing director and chief credit officer at Standard & Poor's. The company also appointed Clifford Griep as executive managing director, ratings risk management and Neri Bukspan as managing director, chief quality officer. Adelson will be responsible for leading criteria definition and governance, and ensuring the independence and standardization of criteria. He will oversee the development of criteria that is consistent with S&P's risk framework. Adelson will also work with S&Ps chief quality officer to ensure consistency in quality across business units, will chair the analytics policy board and join the policy governance group. As a managing director at Nomura, Adelson spearheaded its structured finance research efforts. Before Nomura, Adelson had worked at Moody's Investors Service for 91/2 years where he had been an managing director in the MBS, ABS, and ABCP areas. Prior to Moody's, Adelson practiced law with Thacher Proffitt & Wood, where he began his securitization career as an MBS lawyer. Adelson will be reporting to Vickie Tillman, executive vice president at the rating agency. Both Griep and Bukspan will report to Tillman as well. In his new role, Griep will identify, assess and mitigate potential internal and external risk exposures in the firm's ratings business. Previously, Griep was S&P's chief credit and quality officer. Assuming the role of chief quality officer, S&P Chief Accountant Bukspan will now be responsible for the independent oversight of the quality and performance of S&P's ratings processes. He will develop, evaluate and refine the firm's processes for criteria development and ratings quality assurance.
Bruce Miller, most recently a managing director and group head at ING Capital Markets and founder of Credit Suisse First Boston's original conduit and credit products group, has joined Digital Risk, a one-stop, risk mitigation solutions firm. Based in the company's New York offices, Miller will lead Digital Risk's structured finance consultancy focusing on assisting the firm's clients with their risk mitigation and mortgage performance optimization strategies. In this new role, Miller will help define best methods for applying the company's advanced risk assessment technology to the mortgage finance sector.
GSI Securitization has brought on Aaron Gadouas as a new board member. A former consultant to GSI management, he will take an active role in firm's operations, financing, and business development. He is currently a managing director of Aldine Capital Services, a Chicago-based company that provides capital sources for ABS deals and funding projects. Gadouas is a former senior vice president with ABN AMRO Global Capital Markets focusing on the origination and execution of structured finance deal, including securitizations, CDOs, and derivatives. Before that, Gadouas was employed at Drexel Burnham Lambert in New York and Chicago.
Robert Verrone is leaving Wachovia Securities within the week. Verrone was co-heads of real estate Americas at the firm along with Lawrence Gray. He reported to Bob Reid, whom Wachovia named as head of real estate at the firm in mid-March.
The Blackstone Group announced the close of three CLOs in the second quarter, totaling $1.3 billion. The new CLOs were Columbus Park, which totaled $400 million and closed on April 3rd, Riverside Park at $500 million, which closed on April 15th and Tribeca Park, which totaled $400 million and closed on May 1st. Interestingly, all of the deals were created and marketed over the past month. The firm now manages $14 billion across 26 funds including the U.S. and Europe. This also deals under asset manager GSO Capital Partners, which Blackstone merged with in March. Bennett Goodman, senior managing director and head of Blackstone's GSO division, noted that these new deals contain "high quality loan assets with an expectation for stable returns" across the entire capital structure. This contrasts the riskier deals, issued since last summer, which have been aimed at clearing out bank balance sheets.
First Marblehead Corp. last Monday slashed 500 jobs, which is equivalent to more than half its work force. The job cuts took effect immediately and were spread across all ranks of the student loan firm's offices in Boston and Medford, Mass. First Marblehead also expects to lower its operating expenses by roughly $200 million before annualized taxes. Meanwhile, President George W. Bush last Wednesday signed legislation aimed at injecting liquidity into the student loan market by allowing the U.S. Department of Education to purchase federally guaranteed student loans that lenders haven't been able to sell to investors.
Target Corp. announced a deal last Monday to sell a 47% stake in its credit card receivables to JPMorgan Chase for $3.6 billion. Moody's Investors Service said that the announcement would not affect the A2' long-term or Prime-1' short-term ratings, or on the stable outlook. According to the rating agency, its Nov. 27, 2007 rating downgrade action contemplated a debt-financed $10 billion share repurchase and the sale transaction provides a major piece of this debt financing. The firm's current A2'/Prime-1' ratings captures the increase in leverage as well as the stable rating outlook, Moody's said.
In announcing a fifth consecutive quar-terly loss last Wednesday, Irwin Financial Corp. said it would consider exiting its home equity business, as reported by ASR sister publication American Banker. Will Miller, Irwin's chairman and chief executive officer, on a conference call with analysts, called the company's $22 million loss "a modest improvement" over the fourth-quarter loss of $26 million. American Banker reported that Miller said that Irwin has stopped originating home equity loans and second mortgages for its portfolio and is making only government-insured and conventional first mortgages that can be sold into the secondary market. Irwin also hired Stifel, Nicolaus & Co. and Milestone Advisors to help explore ways to reduce its overall home equity exposure, including selling loans, spinning off assets, or recapitalizing. The goal is to refocus on small-business customers and return to profitability, possibly by 3Q08, Miller said.
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