Securitization People and Markets

Merrill Lynch has released Barbara Scholl from her position as managing director and head of distressed fixed-income research, according to officials at the firm. She did not respond to messages left at her office and her residence. The officials say Scholl's work was mainly on behalf of a proprietary trading effort at Merrill. One of the officials, and another member of the distressed community, expressed surprise that Scholl was let go, as her group was believed to be profitable. Graham Goldsmith, head of the firm's distressed business, referred calls to a firm spokesperson, who did not respond by press time last Thursday.

When viewed over a span of decades, it becomes clear that the direction of interest rates is highly correlated with inflation. Thus, any successful attempt to forecast interest rate movements must also be an attempt to forecast inflation.

Spear, Leeds & Kellogg has hired Ryan Bloom from J.P. Morgan Securities, where he was a high-yield analyst covering the food and paper and packaging industries. Bloom declined comment, as did Doug Conn, head of high-yield research at J.P. Morgan.

Paco Torrado, a par trader at CIBC World Markets, has been let go by the firm as part of a round of layoffs. CIBC has announced intentions to reduce staff levels by approximately 240, primarily in the U.S. The cuts come as a result of the continued low level of business activity, particularly in investment banking, according to a company release.

Fernando Guerrero, the new head of collateralized debt obligations at ABN AMRO, says he wants to add four to eight CDO staffers distributed between the New York and London offices during the first half of next year. Guerrero recently joined from TD Securities, an active CDO underwriter, where he was head of the structured products group for three years.

Ambac Assurance Corp. has added David Salz as a v.p. in its collateralized debt obligation structuring group, says Michael Schoezer, managing director and head of structured finance and credit derivatives. He joins from ABN AMRO, where he was a transactor in the structured capital markets division, reporting to Tom Aylward. He started three weeks ago. At Ambac, Salz will be a transactor for CDOs and related transactions, with a special focus on cash-flow structures, says Schoezer. He will report to Scott Gordon, managing director. Patrick Phalon, a spokesperson at ABN AMRO, says Salz's position will be filled eventually.

Banc of America Securities has reorganized its primary dealer operations. Kurt Harrison is now head of the global government and agency sales effort, as well as being co-head of the primary dealer with Brian Edmonds who is handling the U.S. Treasury trading effort. Previously, Harrison, who was recruited from Lehman Brothers to run trading, had run all of government/agency trading and sales. He says the move was made because the time involved in building the primary dealer's sales effort required him to be off the trading desk too often to effectively monitor firm positions and daily client contacts. Frank Keane runs U.S. agency trading. Harrison says he will seek to hire an additional five or six Treasury and agency sales specialists over the coming year to augment the eight that already report to him.

Agilis Partners, a new mortgage-backed securities hedge fund, will open in the first week of November. Austin Tilghman, general partner, says the new fund will focus on a relative value strategy within tranches of collateralized mortgage obligations. "We think that there is a number of opportunities to take advantage of mispricings, especially as they pertain to prepayment assumptions, within individual CMO tranches," says Tilghman. He says the fund is starting with $5-10 million in seed capital for track record development purposes. The capital goal of the fund is a maximum of $300 million he says, "because, with more than that, you lose your flexibility and mobility in these sectors." The launch of Agilis Partners comes not long after the recent high-profile blow up of Beacon Hill Asset Management, which also did MBS arbitrage (BW, 10/21). "I feel badly for those guys, but they prove our point for us: There are good opportunities out there for people who focus on mispriced assets and avoid duration bets," Tilghman says.

Merrill Lynch's move last week to cut three veterans from its loan group has many players questioning the investment bank's commitment to the loan market. "There is no more loan business there; it's as simple as that," one rival banker said of the investment bank's decision to let go of Harold Siegel, Amy Miller andNeil Brisson. "These people are good, and it makes no sense to cut them and not everybody." Other rivals, however, see the move as a vital cost-cutting measure and believe Merrill is in it for the long run, albeit with a slimmed-down crew during the currently lean M&A period. A Merrill spokesman confirmed that Wednesday was the last day for Siegel, Miller and Brisson (LMW Web site, 10/23). He would not comment on Merrill's commitment to the syndicated loan market.