Securitization People and Markets

J.P. Morgan has created a debt capital markets banking position to concentrate solely on the U.K. market and has hired Nick Denman, previously a debt banker at Goldman Sachs, to fill the slot. John Mayne, J.P. Morgan's London-based co-head of DCM Europe and to whom Denman will report, says the position was created to increase the firm's coverage and to respond to the enormous opportunities for sterling-, dollar- and euro-denominated bond issuance in the U.K. market. Mayne says he is not planning any additional hires at the moment, but will continue to monitor the markets closely and respond to growth areas. Calls to a Goldman spokeswoman seeking the name of Denman's replacement were not returned.

Royal London Asset Management, which manages £7 billion in fixed-income assets, will launch a high-yield fund in the second half, specializing exclusively in European credits. Andrew Carter, cio, says the launch is a response to market demand as investors are expressing an interest in venturing down the credit rating spectrum. Jonathan Platt, head of fixed-interest investment management, will run the new fund. Currently, the firm manages only an undisclosed "small amount" of high-yield assets and the size of the new fund should be about £25 million. The fund will invest in sub-investment grade credits, illiquid debentures, crossover credits and some investment-grade debt. Separately, the firm is looking to hire a fixed-income portfolio manager to replace Paul Doran, who has moved over to head the quantitative team concentrating on equities.

ABN Amro is not trading European high yield since the members of its approximately 10-strong London-based high-yield team have either left the firm or joined other departments, says one its former analysts. The group was integrated into the firm's leveraged finance unit last month (BW, 1/28). Vincent Keith, head of high-yield trading, and Ray Stotlemeyer, head of high-yield research, have both resigned, the analyst says. Members of the team were given the option of a severance package or reassignment. "[ABN is] not trading high yield," he says, adding that eventually high-yield sales and trading will be migrated to other fixed-income desks. Alex Evans, an ABN spokesman, denied the firm had suspended trading high yield--even temporarily, however other market players say the firm's absence is hardly noticeable.

Jason Kravitt, partner with Chicago-based law firm Mayer Brown & Platt, and one of the three founding members of the recently formed American Securitization Forum, says his association is likely to appoint an executive committee next week, during its last organizational-stage meeting. The number of future members and its classification by trades between issuers, underwriters or other groups, such as rating agencies, is still subject to change, according to Vernon Wright, acting chairman for the forum and senior vice-chairman with MBNA America. He says the committee currently comprises 27 professionals, with 11 issuers, eight investors, five investment bankers and three rating agency analysts. George Miller, senior v.p and deputy general counsel with the Bond Market Association, the group that initiated the creation of the new securitization forum, did not return calls. Founding member Greg Medcraft, managing director and head of securitization for Société Générale, was travelling and unavailable for comment.

Tracy Collins (neé van Eck), senior managing director and head of collateralized debt obligation research for Bear Stearns, is switching to Bear Stearns Asset-Backed Securities Fund, an ABS hedge fund that she says is independent from Bear Stearns although Bear Stearns is a majority partner. Van Eck says she made the move to get a real two-days a week position and be a mother, as her hope to work part-time in her former CDO research slot turned out to be a five-days a week job. CDO research will be covered for now by Gyan Sinha, senior managing director, who is currently in charge of asset-backed securities research.

Doug Ostrover, head of high-yield sales, trading and distressed credits at Credit Suisse First Boston, has added junk reserach chief to his growing list of management responsibilities. "Doug has been the de-facto head for some time, so we decided to make it official," says Bennett Goodman, CSFB's global head of leveraged finance. As a result of the change, Sam DeRosa-Farag and Tom Klamka, co-heads of high-yield research will report to Ostrover instead of Goodman. Ostrover joined the high-yield sales desk at Donaldson, Lufkin & Jenrette some 10 years ago, and was promoted to head of sales in 1997.

Deutsche Bank is scrambling to provide leadership and restore flagging morale in its corporate bond research group. Charlie von Arentschildt, Deutsche Bank's head of global markets for the Americas, says the impetus for this effort were remarks byDavid Folkerts-Landau, the firm's London-based global head of markets research, critical of recently dismissed investment-grade research co-heads Paul Tice and Mark Girolamo (BW, 2/4). Folkerts-Landau declined comment through an assistant.

The Allstate Corporation will move its roughly $1 billion in high-yield assets back in-house and away from Trust Company of the West, a Los Angeles based money manager. "Primarily what we're trying to do is recruit and retain [asset management] talent as well as position ourselves to attract new institutional business," says Mike Trevino, spokesman for Allstate. He says the ability to offer high-yield products has been "one of the missing ingredients," in the drive to attract such business. The Allstate Corporation manages $750 million in third-party money through the Allstate Investment Management Company, a subsidiary. Trevino also notes that in a volatile credit environment that has seen a number of "fallen angels"--bonds that drop from investment-grade to high-yield--it helps to have high-yield expertise. The firm has announced a $25 million write-off resulting from losses related to Enron.

Amid widespread volatility in the investment-grade telecommunications sector over the last three weeks, analysts Doug Colandrea at Morgan Stanley and Ed Oppedisano ofDeutsche Bank have found common ground by recommendingSprint and AT&T bonds. Oppedisano is recommending the AT&T 7.3% notes of '11 (A3/BBB+), as they include a step-up coupon compensating investors in the event of ratings downgrades. He also says the company has done a good job reducing debt on its balance sheet, and will return to 180-185 basis points over Treasuries if the overall economy improves. The bonds were trading at 235 basis points over 10-year Treasuries last Tuesday. Colandrea says earlier issues by AT&T are also attractive, as language in the proxy statement gives bondholders a veto over the company's pending cable sale to Comcast. He says bondholders are likely to receive a cash payment from the company in exchange for giving the deal the okay.