Sidley Austin has tapped six partners and a number of counsel and associates from Heller Ehrman. The new partners Sara Brody, Marie Fiala, Michael Rugen and Carol Lynn Thompson will be located in the firm's San Francisco office. Stan Berman joins the firm as a partner in the Washington, D.C. office, and Yang Ing Loong joins as a partner in Hong Kong, residing in Singapore. Brody, Rugen and Thompson focus their practice on securities litigation, including class actions and derivative litigation. They also represent companies and individuals in matters involving the Securities and Exchange Commission and various securities self-regulatory organizations, as well as in internal investigations. Brody was the chair of Heller Ehrman's securities litigation practice group. Rugen has also served as co-chair of Heller's securities litigation practice group, while Thompson co-chaired Heller's San Francisco litigation department.
Grant Thornton U.K. appointed Alistair Drage as associate director within its leasing and asset finance team, headed by Tarun Mistry. Drage has 17 years of structured finance experience, having worked on an array of big-ticket leasing arrangements, and has advised on and arranged finance for contracts in excess of $5 billion for a diverse range of assets including offshore energy, shipping, renewable energy, aerospace and rolling stock. He was previously a partner with a boutique advisory firm. Recent additions to the team include Bernie McAlister and Jeevan Sandhu, who have extensive experience in both small- and medium-ticket markets, specializing in the vehicle finance sector.
U.K. Shariah-compliant Gatehouse Bank has appointed Mufti Muhammad Nurullah Shikder as head of Shariah advisory and Shariah compliance. Muhammad and his Shariah advisory and compliance team will be offering comprehensive Shariah advisory services from an investment banking platform. The team will be providing Shariah services in the following core areas: Shariah advisory, Shariah audit and compliance, and Shariah training and research. Before joining Gatehouse, Muhammad spent three and a half years with Dubai Islamic Bank in the Shariah coordination department and worked closely with Dr. Hussain Hamid Hassan, chairman of the DIB Shariah Board. The new hire has been involved in deals including Sukuks, Islamic funds, Islamic syndications and other corporate and retail products. He was also a trainer in Islamic banking and finance for Dubai Islamic Bank and other financial institutions in Dubai.
The board of directors of the Securities Industry and Financial Markets Association (SIFMA) elected Blythe Masters as the trade association's chairman for 2009. Masters is head of global commodities for JPMorgan Chase. Meanwhile, G. Douglas Edwards of Morgan Keegan & Co. was appointed chair-elect, and Bernard Beal, CEO of M.R. Beal & Co. will serve as vice-chair.
Centerline Capital Group, a subsidiary of Centerline Holding Co. - an alternative asset manager focused on commercial real estate funds and financing - announced that it closed the last of nine multifamily housing loan transactions last week. All loans were made in 2008 with Fannie Mae, under its Delegated Underwriting and Servicing or DUS program (which originates multi-family loans), on behalf of a single borrower for a total of $131 million. Centerline provided the refinancing for a portfolio of eight South County apartment properties in California, allowing the borrower to pay off first and second mortgages on those properties and free up equity to acquire and complete the rehabilitation of a ninth apartment complex - a 161-unit complex in Redondo Beach. The $32 million loan for this property closed on Oct. 10, 2008. The loans on all nine properties are seven-year fixed rate, with the remaining year adjustable and pre-payable, without a pre-payment penalty any time during the adjustable rate period.
The Federal Housing Finance Agency (FHFA) integrated three agencies under its umbrella. The Office of Federal Housing Enterprise Oversight (OFHEO), the Federal Housing Finance Board (FHFB), and the Department of Housing and Urban Development's government-sponsored enterprise mission team are now operating within the FHFA. The government agency also appointed three OFHEO and FHFB veterans to the deputy director positions: Edward DeMarco will serve as senior deputy director, chief operating officer and deputy director for housing mission and goals; Stephen Cross will take the position of deputy director in the division of Federal Home Loan Bank regulation; and Chris Dickerson will serve as the deputy director of the division of enterprise regulation. David Lee, the Federal Housing Finance Board's director of the office of management, will become FHFA's chief administrative officer. FHFA has also established a new Web site for the agency, www.FHFA.gov. The new site provides links to the existing OFHEO and FHFB sites. In the next few months, FHFA will completely transfer the content from those sites to the new FHFA site.
Moody's Investors Service last week downgraded CIFG Assurance NA to 'B3' from 'Ba2', keeping its ratings review with direction uncertain. This comes less than a week after Assured Guaranty Corp. agreed to reinsure $13 billion of CIFG's U.S. public finance book. The rising expectations of mortgage-related losses and CIFG's efforts to commute certain exposures were the cause of the downgrade, the rating agency said. Aside from the reinsurance deal, CIFG has also reached an agreement to commute $12 billion in structured finance exposures in a deal that has yet to close. Moody's action also applies to CIFG Guaranty and CIFG Europe. Part of CIFG's future rating will depend on the effect of the insurer's reinsurance agreement and its efforts to limit other exposures, Moody's said. The rating firm said it is unlikely it will upgrade CIFG to investment-grade status considering the uncertainty about the company's medium and long-term strategy. CIFG's moves to reduce its exposures have helped its regulatory standing. Due to CIFG's efforts, the New York Insurance Department has said it has a temporary forebearance on placing the insurer into rehabilitation, even though it had statutory filings "indicating insolvency." Under terms of the most recent transaction, Assured will reinsure CIFG policies and then seek to novate them, essentially canceling the original policies and replacing them with ones from Assured.
The Census Bureau reported that the third-quarter national vacancy rate was 9.9% for rental housing and 2.8% for homeowner housing. Neither figure was statistically different from 3Q07 or 2Q08. The homeownership rate was 67.9% for the current quarter compared to 68.2% a year ago and 68.1% last quarter - also not statistically significant.
S&P/Case-Shiller reported that its 10-City and 20-City Composite Home Price Indices for August declined 1.1% and 1%, respectively, versus 1.1% and 0.9% in July. Year-over-year declines of 17.7% and 16.6% were new records. For the month of August, San Francisco experienced the sharpest decline at 3.5%, followed by Phoenix (2.9%) and Las Vegas -2.4%). Meanwhile, Cleveland had a gain of 1.1%, followed by 0.1% for Boston; Chicago and Denver were flat. Year-over-year, Las Vegas and Phoenix are down just over 30%, while Los Angeles, Miami, San Diego, and San Francisco have dropped between 25% and 30%. Dallas (2.7%), Charlotte (2.8%), Boston (4.7%) and Denver (5.1%) have experienced the smallest year-over-year declines. David Blitzer, chairman of the index committee at S&P said there were "very few bright spots in the data."
New home sales rose 2.7% to a 464,000 annual rate in September. This was better than the expected consensus call of 450,000. August was revised 8,000 lower to 452,000 - its lowest level since January 1991. The median sales price slipped 0.9% to $218,400, while the months' inventory declined one month to 10.4 months. Gains were reported in the West and South, while the Northeast and Midwest were lower.
MGIC Investment Corp. is in the process of being removed from the S&P 500, effective close of trading on Oct. 30. Standard & Poor's, which maintains the index, said MGIC is now the 500th largest company in the index, with a market capitalization of $266 million as of the close of trading on Oct. 28. On Oct. 29's late morning trading, MGIC's shares dropped an additional $0.14 to $1.99, reducing the company's market capital to roughly $249 million, according to Yahoo. MGIC is being replaced in the index by utilities firm Wisconsin Energy, which is moving up from the S&P Midcap 400.
Denmark has received >12 billion ($15.1 billion) from the European Central Bank (ECB). This in an effort to increase the amount of cash in short-term euro money markets, and to provide neighboring countries with help in the financial crisis, according to published reports. The ECB said the swap will remain in effect as long as needed. The move will make it easier for Denmark to get access to euros. The ECB provided similar monies for Hungary and Switzerland earlier this month. The swap will provide euros to the Danish bank in exchange for Danish kronor, and should lower the exchange rate for euros in Denmark.
Fitch Ratings said in a report last week that the continued stability of senior CLO ratings, and the fact that only a few CLOs were downgraded as a result of Fitch's recent corporate CDO criteria revisions, demonstrate the continued resilience of senior tranches of European CLO structures. Senior CLO ratings are expected to remain more stable than investment-grade synthetic CDOs, even as the operating and financing environments for some of the underlying obligors deteriorate.
Dresdner Kleinwort analysts said that the U.K. Financial Services Authority (FSA) plans to more closely examine the covered bond issuance plans of the banks under its jurisdiction. This is a result of covered bonds being increasingly used to raise short-term liquidity rather than for pure asset financing. The FSA fears that this - in combination with ever increasing over-collateralization needs on part of the issuers - could undermine the claims of unsecured creditors, as they are structurally disadvantaged by the segregation of covering assets. Dresdner analysts said that the FSA has been concerned about this problem ever since U.K. covered bonds were introduced. Last week, the FSA announced in a new letter that institutions must - de facto - obtain approval for any new issues or the pledging of assets for the benefit of secured investors.
The Reserve Bank of New Zealand pledged to buy NZ$8.7 billion ($4.85 billion) of RMBS from ANZ National and Westpac banks, the New Zealand Journal reports. The purchases are aimed at boosting liquidity at the two institutions. Tightening liquidity in New Zealand is not the result of problems with domestic RMBS, since U.S.-type subprime lending practices were not permitted in New Zealand.
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