Securitization People and Markets

A survey conducted by New York based fixed-income recruiter Anastasia Carroll, based on responses from bond executives at 56 buy- and sell-side firms, concludes that the strongest job demand is likely to be for those versed in structured finance and debt origination this year. Perhaps most importantly to bond market players, the majority of respondents are looking to use the balance of the first quarter to build up their departments. She speculates that this will be easy, given the amount of dislocation still prevalent after the spate of mergers in 2000.

Investment grade issuance for January came in at $55.5 billion, which was at the high end of analysts' estimates. Supply has been primarily concentrated in higher quality names, with AAA and AA borrowers accounting for over 2/5 of year-to-date issuance. Lower-rated borrowers have disappeared from the calendar in the past two weeks as post-Enron accounting concerns have increased spread volatility significantly in the BBB ratings bucket. The roller-coaster ride in Tyco spreads and the sell-off in Williams, WorldCom and other affected credits deterred any but the highest rated issuers from accessing the markets. That said, prior to the last two weeks the high yield calendar was very robust, with almost $9 billion in junk-rated issuers tapping the market. The Investment Company Institute released its preliminary figures for 2001 flows, which came in roughly in line with expectations. For the first time since 1998, flows into taxable fixed income bond funds exceeded flows into stock funds. The total for bonds for the year was about $75 billion compared with $33 billion for equities.

Investment grade issuance for January came in at $55.5 billion, which was at the high end of analysts' estimates. Supply has been primarily concentrated in higher quality names, with AAA and AA borrowers accounting for over 2/5 of year-to-date issuance. Lower-rated borrowers have disappeared from the calendar in the past two weeks as post-Enron accounting concerns have increased spread volatility significantly in the BBB ratings bucket. The roller-coaster ride in Tyco spreads and the sell-off in Williams, WorldCom and other affected credits deterred any but the highest rated issuers from accessing the markets. That said, prior to the last two weeks the high yield calendar was very robust, with almost $9 billion in junk-rated issuers tapping the market. The Investment Company Institute released its preliminary figures for 2001 flows, which came in roughly in line with expectations. For the first time since 1998, flows into taxable fixed income bond funds exceeded flows into stock funds. The total for bonds for the year was about $75 billion compared with $33 billion for equities.

Crédit Agricole Indosuez (CAI) is making a major push into the European fixed-income market aimed at increasing its presence in the corporate, government and asset-backed credit markets as well as becoming a key credit derivatives player. "We don't want to be a bulge bracket firm, but a major player in terms of credit, complex credit derivatives and risk management," Thierry Sciard, global head of fixed-income in Paris, told BW.

Deutsche Bank released its two veteran co-heads of U.S. fixed-income credit research, Paul Tice and Mark Girolamo, late Wednesday. David Folkerts-Landau, Deutsche Bank's London-based global head of markets research, said "[Tice and Girolamo] are very nice guys, and they worked hard here, but we terminated them because we need truly strong leaders in all facets of research management, and they just didn't fit the bill."

Dresdner Kleinwort Wasserstein is looking to add structurers and marketers to its London-based European asset-backed securitization team. The firm is especially interested in hiring French, Spanish and Portuguese structurers to increase its presence in those markets, according to a DrKW ABS official. The firm plans to focus on

FTN Financial Capital Markets, formerly known as First Tennessee Capital Markets, has hired Charles Smart and Dhiren Toolsidas from Sandler O'Neill as senior v.p.s in its newly created quantitative research and structuring group. The two are part of what fixed-income trading chief Deke Iglehart calls "FTN's answer to our growing mortgage-backed trading and research needs." Smart and Toolsidas are based in the Memphis, Tenn.-based firm's New York office.

HSBC Securities has hired Shawn Burke, a utility and pipelines analyst at Greenwich Capital Markets, in the new position of senior v.p. and investment-grade utilities and pipelines analyst in New York. Robert Smalley, investment-grade research head at HSBC, says Burke was hired because the recent volatility in the pipeline sector has created investment opportunities. "He's one of the top analysts in the market, so hopefully he can help us develop that business," says Smalley. Burke says he joined HSBC because he wanted to return to the sell-side. Prior to joining Greenwich Capital Markets, he was head of investment-grade research at Barclays Capital.

Merrill Lynch has begun to send credit derivative structurers along with asset-backed bankers when pitching deals to potential issuers. The objective is to provide a one-stop-shop for securitization, since these deals frequently include derivatives, according to a Merrill banker in London. The derivatives team will handle smaller deals, while larger deals will be the purview of the securitization group.