Securitization People and Markets

Deutsche Telekom will benefit from the scarcity of new telecom paper in the market when it prices its new E8 billion issue next month, say London-based analysts. Even though spreads on existing DT bonds widened five to 10 basis points when the roadshow was announced last week, the new issue is said to be in demand from investors and the company will not have to pay too much of a new issue premium. "DT will be one of the only big telecom issuers this year. I don't think they will have to offer a big premium to secondary spreads," says Jean-Yves Guibert, telecom analyst at BNP Paribas in London. "Deutsche Tel's ratings are around where they should have been 12 to18 months ago and I can't see supply coming from elsewhere. The premium will be small," says Tim Jagger, telecom analyst at the Royal Bank of Scotland.

Dresdner Kleinwort Wasserstein is looking to hire three asset-backed securities bankers for its New York office. Saad Zein, a director of credit derivatives structuring with Dresdner Kleinwort Wasserstein, says he is a couple of weeks away from making offers for the three ABS bankers. "I am not getting much sleep lately," concedes Zein, who in addition to his credit derivative duties also fills the role of North American securitization chief, left vacant after the recent departure of Jon Bottorff to HSBC (BW, 4/22).

Seneca Capital Management has made six new senior hires to its fixed-income team and will make further additions over the next few weeks, according to Gail Seneca, the firm's ceo and cio. The hires come as four more senior members of the team resigned, bringing to seven the total number of resignations the group has seen in recent weeks.

J.P. Morgan Securities, on the back of the recently announced firm-wide reorganiztion, has reduced the headcount in its London-based debt capital markets and structured finance businesses. The precise number of layoffs could not be learned, but an industry official who has spoken to a member of the firm's human resources team says the firm has been forced to let go of high achievers with strong track records from analyst through to the managing director level. One London-based executive recruiter says he has seen 11 resumes from the structured finance group and a handful from DCM. Calls to John Mayne, co-head DCM Europe and Tamara Adler, head of securitization, were not returned by press time. Eileen Darko, a firm spokeswoman, did not return calls.

RBS Financial Markets, the capital markets division of the Royal Bank of Scotland, has hired Stewart Booth to fill the newly created position of head of credit trading. Booth joins from J.P. Morgan Securities and will be responsible for the investment-grade, high-yield and credit derivatives trading businesses, a RBS spokeswoman said. He will report to Symon Drake-Brockman, global head of capital markets, who previously had been covering credit trading as part of his overall duties. It could not be determined what his previous duties had been at J.P. Morgan. Calls to a J.P. Morgan spokeswoman seeking the name of Booth's replacement were not returned.

Chris Rekow, an investment-grade telecom trader, has left Banc of America Securities in Charlotte to join UBS Warburg in Stamford, Conn. as a v.p. He will back up Mike Morris, the lead telecom trader on the desk, and report to Mike Meyer, head of investment-grade trading at UBSW, says a firm official. The official says the hire is part of an effort to beef up the trading desk. Over the last three months, the firm hired Eric Jayaweera andPaul Savini, a retail trader who came up through UBSW's training program. Meyer and Rekow could not be reached.

Deutsche Bank has given the role of heading up investment-grade sales to Helen Doyle, a saleswoman on the desk, replacing former chief Tony Britton, according to a member of the firm's sales team. Doyle confirms that she now heads the group, but declined comment on why she replaced Britton. Brian Reid, newly promoted head of all credit sales, did not return calls. Britton was on vacation and could not be reached.

Last week saw a firm tone through Thursday as the high-yield market absorbed two to three new issues per day without a hiccup. Bids were weaker in crossover retail names like JC Penney and Gap Inc. Here was selected other action:

Analysts and investors are divided as to whether there is still value in the auto sector. With rate hikes coming and varying credit problems at each of the big three, some analysts question the wisdom of being overweight the sector. "It is historically a good move once the Fed actually begins raising rates," says Vince Boberski, corporate bond strategist at RBC Dain Rauscher. That said, he believes it is still too early. He says bonds of Ford Motor Co., look like a good long-term value versus those of General Motors and Daimler-Chrysler, but that GM is the best short-term buy from a fundamental standpoint because of equity momentum, earnings and product lineup.