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Derivatives

S&P Reorganizes Structured Products Group

Standard & Poor's has reorganized its structured products division in New York to create three new groups. The division, which until about two weeks ago had several different teams covering the cash flow product market, market value CDO products and synthetic collateralized debt obligations and derivatives, has been reorganized into three distinct groups. These are fixed income, equity and an operating vehicle group, according to Richard Gugliada, head of the global CDO group in New York. The three new groups report to Gugliada.

"We kind of had a mishmash of things before the reorganization," said Gugliada. He added that the plan was prompted by the rating agency's recognition that there needs to be a more concentrated focus on the rapidly growing hedge fund and private equity fund markets, as well as special purpose vehicles. "This will give our customers more continuous coverage from the same person," Gugliada said. He added that under the former set up, customers were often bounced from analyst to analyst to discuss different products.

As part of the plan, David Tesher, who was heading the cash flow coverage, is now heading up the fixed income group, which covers any cash flow products that use fixed income as the underlying security. Chris Howley, who was working with Tesher in the cash flow CDO group, is heading up the new equity group, which covers securitization products for hedge funds, distressed funds, private equity funds and mutual funds. The operating vehicle group is being co-headed byNik Khakee in New York and Perry Inglis in London, both of whom where covering synthetic CDO products prior to the reorganization. The operating vehicle group will cover all derivative products and the burgeoning special purpose vehicle market. Their coverage will encompass any investment vehicle that uses structured finance techniques to obtain a counterparty rating," Gugliada said.

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