Securitization People and Markets

Anthony Faillace and Steven Luttrell, two veterans of BlackRock Financial Management, will launch Drake Management, a new fixed-income hedge fund based in New York. It will launch with $150 million in assets under management, according to Luttrell. Faillace, who was a non-dollar portfolio manager at BlackRock for three years, will be cio, while Luttrell, who was a senior executive in the alternative investment group, will be coo. Prior to their stint at BlackRock, they both worked at PIMCO. Luttrell says the firm will use a multi-sector, low volatility, relative-value approach to investing, and has no target on the amount of capital they want under management.

Bear Stearns International is planning to grow its London-based interest-rate product group by nearly 50% in the coming months, according to BW sister publication Derivatives Week. This is part of the firm's ambition to become a larger player in the European market, says George Polychronopoulos, senior managing director. Polychronopoulos, who will lead the effort, joined last month from Deutsche Bank, where he was most recently head of marketing to Scandinavia and Greece: previously he had been head of Scandinavian and Greek interest-rate products. At Bear Stearns, his position is parallel to that of Jérôme Camblain, who runs the sales side.

Brian Hessel, managing director and high-yield portfolio co-manager at J. & W. Seligman in New York, has resigned, according to a senior executive at the firm. Hessel could not be reached for comment. Paul Guidone, Seligman's ceo, was in Germany, and messages left for him were referred to Hank Green, a public relations executive at Adler & Associates, which represents the firm, who declined comment. Hessel's exit marks the second high-profile departure from the junk team at Seligman, which has some $2.5 billion in high-yield assets.Dan Charleston, who had been the top high-yield portfolio manager, was let go over the summer after the firm suffered heavy losses in its portfolio, according to the senior Seligman executive. As of last week, the high-yield fund was down some 17% year-to-date, according to Morningstar.com. Charleston could not be reached for comment.

The Deutsche Boerse will add sub-indices for sterling-denominated, non-gilt government bonds, state-guaranteed bonds, collateralized bonds and corporate bonds to its sterling-denominated iBoxx index family by year-end, says Andreas Brunner, a member of the Deutsche Boerse's index team in Frankfurt. Sterling-denominated government indices debuted earlier in the year.

Analysts in London are calling Railtrack's modest downgrade by Moody's Investors Service too relaxed, too cautious and naïve. "It's almost a laughable downgrade [Moody's] has given. It does not indicate a default or potential losses," said Jans Jantzen, analyst at Bear Stearns in London. "Railtrack is no longer investment grade," he emphasized.

Analysts are far from a consensus on whether the debt of embattled telecommunications equipment manufacturer Marconi is a buy or a sell. The only point analysts do agree on is that the company's dim picture should be a bit clearer when it releases an earnings statement today. At 30 cents on the dollar, Ziki Salav, a credit analyst at Dresdner Kleinwort Wasserstein in New York, called Marconi (BBB-) a buy, because the company's creditors are in such a bad position that it should be relatively easy to renegotiate its credit agreements. "The banks are in a bad position. The company pays LIBOR plus 40 basis points and there are no covenants in the agreement. It should be easy for the company to extend the maturity of its credit facility to '05 by giving the banks seniority," he added.

Pacific Investment Management Company has added two senior portfolio managers to its European team in an effort to gain more mandates for its European products and to compete for more third-party business. Joe McDevitt, executive v.p. and head of PIMCO's London office, said, "We're trying to become more of a core manager in the European fixed-income market. Clients tended to see us as a global, U.S., investment-grade and high-yield manager." PIMCO has roughly $7.5 billion in U.S. core bond and specialty mandates under management for European clients, said McDevitt.

Ackerley Group's 9% of '09 (formerly B3/CCC+) zoomed from an 82 bid to 103, following an acquisition announcement by Clear Channel (Baa3/BBB-). Ackerley is a billboard advertiser and owner of television and radio stations. "The purchase shows that even in a tough environment, there appears to be some market for TV assets," says Andy Van Houten, media analyst and co-head of high-yield research at Deutsche Banc Alex. Brown. Nonetheless, Deutsche Banc maintains its underweight recommendation for high-yield television bonds.

Bear Stearns is seeking to pick up key bankers with transaction and customer relationship experience for its London-based origination desk, according to Noel Dunn, senior managing director for debt corporate finance. Dunn says there are roughly 10 bankers on the desk, while noting that, "We have more hiring to do and the current market makes for a terrific opportunity to hire good people."