Securitization People and Markets

Though recent spread volatility in the high-grade bond market has chased away a number of potential issuers, sell-siders remain convinced that 2002 investment-grade issuance will come in close to the $447 billion seen in 2000. Such a total would be well short of last year's $684 billion, but far better than last month's numbers would seem to indicate. Projected over a full year, February issuance through last Wednesday morning would translate to a total of only $340 billion, says Vince Boberski, strategist at Dain Rauscher in Chicago.

John Horner has leftLehman Brothers and joinedJ.P. Morgan Securities as its new 15-year and agency adjustable rate mortgage-backed securities trader. Horner will be a v.p. and report to residential mortgage group chief Kevin Finnerty. He will replace veteran MBS trader Tom DeNunzio, who Finnerty says is looking at other opportunities within the organization, stressing that DeNunzio's decision was voluntary. Horner will also fill the role of agency backed ARMS trader, a slot J.P. Morgan has been looking to fill for sometime, says Finnerty.

Lehman Brothers has reassigned Tom Bernard from his role as head of investment-grade and high-yield sales and trading, in a bid to beef up its high-yield origination business, according to Bill Ahearn, a firm spokesman. Bernard will assume additional high-yield duties, working as co-head of high-yield capital markets alongside Rob Redmond, who had been the sole head. He will no longer work with the investment-grade team.

Incapital, the Chicago-based underwriter of InterNotes--corporate bonds sold at par to retail investors--is set to announce the addition of several new issuers to its client roster in the next two months. Tom Ricketts, ceo, says he will likely announce two to three new issuers this month, and two to three more in April. He would not disclose names or even sectors of the companies, though he says each is a household name, and each will register a shelf of at least $1 billion.

Swiss Re will issue a catastrophe bond deal later this month led by Lehman Brothers, according to a buy-side investor. Called Redwood Capital 2, after the first series issued in December (BW, 12/24/01), the deal size should be approximately $200 million. Goldman Sachs, the other major CAT underwriter, will not be part of this deal, according to this investor. Michael Millette, a v.p. and CAT banker with Goldman, declined comment. The investor adds that the transaction is likely to get an investment-grade rating. At present, only 10% of the $2 billion in outstanding CAT bonds are investment-grade. Five percent of outstanding CAT bonds are rated single-B while the remainder are double-B.

UBS Warburg is looking to hire two asset-backed analysts to cover the European market and one public sector analyst. One ABS hire will be a replacement and the other a newly created position, says Helen Clement, global head of credit research in London, where the two would be based. At present, the firm only has one ABS analyst after its London-based analyst, Ralf Gasser, was let go amid allegations he and other UBS analysts had accessed Morgan Stanley's research Web site without authorization, according to a Bloomberg article. The public sector analyst will replace Beate Muenstermann, who left at the same time as Gasser. Clement declined to comment on the analysts' departures.

UBS Warburg has added veteran mortgage-backed securities trader Michael Hirschberg to its collateralized mortgage obligation trading effort in New York. Hirschberg joins from Bear Stearns, where he worked for 12 years, beginning as a summer intern on the fixed-income trading floor. Hirschberg will trade trust IO/PO bonds and head up all MBS derivatives trading, according to his new boss, Dave Martin. Martin says the position is newly created, and a response to customer demand for more mortgage derivatives. He will be a managing director.

Recent downgrades of Road Chef and Welcome Break, two landmark whole business securitization deals of roadside service complexes in the U.K., could put a damper on the market's appetite for these kinds of deals and bring closer scrutiny from ratings agencies, London-based bankers say. Last week, Fitch Ratings downgraded Road Chef's two single-A tranches to triple-B+, and its triple-B tranche to double-B. Welcome Break had four single-A tranches downgraded to triple-B+ and one triple-B tranche downgraded to double-B. Fitch noted that both companies are coming close to the danger zone in terms of being able to service their debt.

Tom Currie has left his post as director of new assets with Standard & Poor's to join XL Financial Assurance, the Bermuda-based financial guarantor, as chief underwriting officer. The position had been open since last year, when Jim McNichols was promoted to chief financial officer. XL Financial Assurance is a re-insurer and an affiliated company of XL Capital Assurance, a triple-A rated monoline financial guarantor. Both companies are subsidiaries of XL Capital Ltd. based in Bermuda. Currie did not return calls. Roger Scotton, director of communications with XL Financial Assurance, says Currie reports directly to McNichols and that his new function consists of overseeing the underwriting process of financial guaranteed asset-backed securities. Currie joined earlier this month.