Securitization People and Markets

Banc One Capital Markets has hired Bill Wulkan to the new position of European capital markets chief based in London. Banc One is beefing up its research group in an effort to build up its business in the U.S. and Europe. Dana Johnson, managing director and head of capital markets research, says the company has an established European bond origination business, but lacks someone to helm the effort. Wulkan will report to David Schabes, global origination director based in Chicago. Schabes could not be reached and Wulkan did not return calls. Wulken's last position was at Standard Chartered Bank in Singapore, though the nature of his duties there could not be determined.

Kelley Millet, senior managing director and head of investment-grade capital markets and syndicate at Bear Stearns, has added trading and research to his investment-grade managerial responsibilities, according to senior firm officials. Millet declined comment. Harry Rosenberg, the former research and trading head who left the firm last week, also oversaw high-yield trading and research. It could not be determined who, if anyone, has replaced him in that capacity.

Fidelity Investments has unveiled a corporate bond fund that will invest in sterling-denominated issuance, which it will market to small- and medium-sized pension funds, says a firm spokeswoman. With FRS17 set to go into effect next year, there will be more demand for longer-dated corporate paper. The fund, launched last week in London, will be managed by Alex Veys, who also manages another sterling bond fund. In addition to sterling-denominated corporate bonds, the fund will invest in supranational and agencies, and will focus on paper with maturities of 10 years or more and rated triple-B and above. Fidelity manages about £1 billion in U.K. corporate bonds.

The adoption of FRS 17, a new accounting treatment of pension fund liabilities, is making U.K. bond managers move quickly to seize opportunities from a potential spike in longer-dated corporate bond issuance. The new rule forces companies to more accurately balance their pension assets and liabilities. London-based senior reporter Rachel Wolcott presents several examples of what some larger players are saying and doing about this shift.

The New York-based branch of Norddeutsche Landesbank (NORD/LB) is seeking an assistant v.p. to work on origination for transactions related to Hannover Funding, the NORD/LB sponsored asset-backed commercial paper conduit.Omar Bolli, senior v.p. and head of asset-backed finance, says the hire would round out the group, which now consists of three securitization professionals. The new hire will report to Bolli. The group includes Bolli, the senior v.p. who heads the group, v.p. Edward Weber and analyst John McDermott. Bolli says that after that, the group has no further hiring plans for this year.

Sharad Chaudhary has been appointed Banc of America Securities' new head of asset-backed securities research. The move comes one year after the position was vacated by the resignation of Meredith Hill (BW, 3/5/01). In addition to his ABS duties, Chaudhary has also been overseeing B of A's residential and commercial mortgage-backed research, says Pat Augustine, the group head of MBS and ABS sales, trading and research and to whom Chaudhary reports. During the past year, ABS research had been handled by Tim Patrick, a managing director and head of high-grade research and credit strategy.

The new pension accounting rule FRS 17, set to become mandatory next year, could curtail some U.K. companies' ability to fund themselves in the debt capital markets, say analysts. The new rule, which requires companies to account for their pension fund liabilities on balance sheet, could make companies appear over leveraged--especially those with pension liabilities larger than the market value of the company. Companies with large pension liabilities need to show investors that they have a feasible plan to fund them, otherwise it could impact their cost of capital, warned one analyst. Many of these deficits look awful until the company explains how they will be funded, says Crispin Southgate, fixed-income strategist at Merrill Lynch in London. "Investor relations strategies are key," he says. But some companies may be in for trouble, if they do not have a game plan. "It will impact their cost of capital, especially if the deficits are big and horrible, and justifiably so," he says.

Crédit Agricole Indosuez (CAI) is looking to add two bankers to its London securitization team that covers Northern Europe. Peter Kappel, head of Northern European ABS, says the firm will hire one origination banker and one structurer. CAI only recently established a London-based ABS effort (BW, 2/4) and is now putting together its first deals, says Kappel. He plans to use CAI's balance sheet fairly aggressively to provide acquisition finance loans, which eventually will be replaced with securitization financing. In the future, CAI's London group will concentrate on heavily structured types of transactions, such as whole business deals, fixed capital and commercial mortgage-backed deals.

High-yield energy analysts say recent widening in the bonds of Vintage Petroleum, largely due to the perception of heightened risk associated with its Argentine assets, has made it one of the more attractive plays in the energy sector. One sell-side analyst says he is considering upgrading his recommendation on the bonds to buy from hold, as he has watched them widen some 300 basis points over the last two months. The Vintage 7.875% notes of '11 (B1/BB-) were trading at close to a 10% yield at 480 basis points off the curve last Tuesday. He says that because the company has a strong management team with a good track record, he believes Moody's Investors Service will give it some breathing room before lowering ratings further. Moody's downgraded the company late last month with a negative outlook. He sees 75 basis points worth of short-term tightening in the name, and says it will trade at close to an 8% yield longer term once it resolves difficulties surrounding the integration of its recent purchase of Genesis Exploration.