Securitization People and Markets

Bear Stearns has won the first portion of a legal conflict withDeutsche Bank over the employment status of a group of three analysts led byMarion Boucher-Soper (BW, 5/27), but the litigation is far from over as Bear Stearns is seeking damages from Boucher-Soper and her two colleagues.

Lombard Odier, which manages £2 billion in fixed-income assets from its London office, has added two analysts in response to growth. Gary Brecknell, who joins from Bear Stearns, will cover financials and Darren Stevens, who joins from Standard Chartered Bank, will cover industrials. Both report to Martin Squires, head of credit research, says Paul Osborne, head of U.K. institutional clients. "As the business grows, we need more credit analysts with specialities," says Osborne of the hires. Lombard Odier, with the addition of Brecknell and Stevens, now has eight analysts covering credit globally. There are no immediate plans for additional hires.

Catherine Smith, a high-yield bond portfolio manager at Wellington Management Co., has resigned after 17 years for personal reasons, according to BW sister publication Money Management Letter. Lisa Finkel, spokeswoman for Wellington, declined to comment, and Smith could not be reached. Christopher Jones, a high-yield bond manager at the firm for just under a decade, has taken over Smith's duties. At last count, Wellington managed about $8 billion in junk bonds. Dan Bryant, cio for the Teachers' Retirement System of Louisiana and one of Wellington's clients, said the firm notified him in advance of Smith's resignation, and that the fund has no plans to replace her. Wellington handles a $128 million junk bond mandate for the plan, as well as a $151 million mid-cap growth mandate.

Last week's move by the Illinois state legislature to raise taxes on riverboat casino operators such as Argosy Gaming, Hollywood Casinos, Boyd Gaming and Mandalay Bay could inspire politicians in other states to push for similar legislation. That would cut into profits of these and other casino operators, says Jacques Cornet, gaming analyst at CIBC World Markets. Many riverboat casino operators have properties in several states.

Telecom Italia's announced debt reduction plans and revised outlook from Standard & Poor's, have analysts touting it as one of the best telecom credits in Europe. Last week, Telecom Italia announced plans to sell its 25% stake in Mobilkom Austria, which should bring in E700 million, and S&P revised the outlook on its credit ratings from stable to positive. "TI is probably one of the best names in the sector along with [British Telecommunications]," says Rick Deutsch, head of European high-grade credit research at BNP Paribas in London. He recommends the company's 61Ž4% of '12, because the steep curve makes the longer-dated paper a better value.

Fitch Rating's commercial mortgage-backed securities group has been downsized, says Mary Metz, managing director and co-head of the CMBS group. She says the move was prompted by the firm's loss of market share due to notching by rival agencies Moody's Investors Service and Standard & Poor's (see story, page 1).

Issuers of high-yield bonds are increasingly seeking information from fixed-income portfolio managers through investor surveys or "perception studies" conducted by Thomson Financial's Corporate Group business unit. Thomson has conducted such studies with equity investors for some 10 years, but only began polling fixed-income investors last July, says Justin Brimfield, senior associate in the fixed-income strategic intelligence group at Thomson Financial. Brimfield says fixed-income investors have been increasingly on the minds of corporate investor-relations executives because companies are issuing more debt. Other fixed-income executives say companies are fielding more calls from buy-siders as they lose faith in sell-side analysts and ratings agencies in the wake of recent blow-ups such as Enron and WorldCom.

In the words on one trader, last week's tone was very "stinky." Bonds of Conseco Inc., Echostar Communications, Regal Cinemasand Lyondell Chemical Companywere all off a point to a point and a half.

HSBC Securities has lost two managing directors and corporate bond salesmen from its Boston office, as senior executives continue to depart the U.S. corporate bond group of the London-based bank. Jack McNeill and Kevin Kelly have left HSBC to open a Boston corporate bond sales office for FTN Financial, the investment-banking arm of First Tennessee Bank. Kelly says they made the move "for the opportunity," declining to elaborate. They will be senior v.p.s reporting to Brian Shapiro, New York branch manager at FTN Financial.