Securitization People and Markets

Standard & Poor's in New York has added several new staff members to its North American ABS group, according to Patrice Jordan, global head of ABS/MBS. Jordan says S&P is building up because the ABS business is very strong as well as to replace staff that recently moved on.

A Salomon Smith Barney report saying oil-driller Pride International's (Ba3/BB) all-stock acquisition of Marine Drilling "may result in an investment-grade rating for the new Pride International once the acquisition closes," is being met with skepticism by the buy- and sell-sides. Though many pros believe the acquisition will result in an upgrade because Marine Drilling has very little debt and the acquisition was conservatively financed, they do not see Pride climbing the full two or three notches to make the cut. Keith Petersen, the energy analyst at SSB who issued the report, referred calls to a firm SSB spokeswoman, who declined comment.

Margaret Cannella, a retail analyst at J.P. Morgan Securities and an Institutional Investor first-team member in 2000, sees JC Penney (Ba2/BBB-) as a good buy in spite of a generally grim picture for retail. Portfolio managers are wary, however. Cannella notes that the company's 7.6% of '07 went up a point to $92.50 from May 25 to June 25, while bonds of similar maturities for WalMart Stores (Aa2/AA), Target Corporation (A2/A) and Federated Department Stores (Baa1/BBB+), fell by two, six, and 10 points, respectively. Cannella says the credit "could trade up a bit more" through the end of August, because it has managed its finances well and fully expects to meet earnings forecasts. She declines to set a target for fair value.

Moody's Investors Service has recruited 12 analysts for its structure finance department, all of whom are scheduled to start between this month and August. Brian Clarkson, managing director of the structured finance-Americas group, says the hires are needed to keep pace with the overall growth of the ABS/MBS sector.

Deutsche Bank Securities in New York has hired Alec Crawford from Morgan Stanley to be its MBS strategist, according to global securitized product research chief Karen Weaver. Crawford will be responsible for generating trade recommendations and market overviews for Deutsche's client base. The position is newly created. He will also work with Deutsche's chief fixed-income strategist, Ifty Islam, in devising the MBS and MBS derivative components of the weekly Deutsche fixed-income strategy review. He will jointly report to Weaver and Islam. At Morgan Stanley, Crawford was most recently chief interest-rate strategist, responsible for a team that analyzed and made calls on swaps, MBS, agencies and government bonds, and reported to area chief Tom Juterbock. Calls to Juterbock were not returned as of press time. Crawford could not be reached for comment.

Paul Greenberg, the head of high-yield research at Bear Stearns and a 10-year veteran of the firm, as well as a multi-year member through 1999 of the Institutional Investor fixed-income All America team in forest and paper products, has announced his retirement, according to a Bear Stearns executive. He says that Greenberg gave his departure date as "mid-July at the latest." While Greenberg did not indicate why he made this choice, he said little about his future plans to his colleague, other than to note "that he would take some time off, and then probably wind up on the buy-side."

Barclays Capital has hired Ralph Marinaccio to the new position of director, investment-grade trading. Marinaccio will focus on utilities trading, reporting to Rich Roche, director and head of investment-grade trading. Roche says he hired Marinaccio to increase the firm's commitment to investment-grade as a whole, and particularly the utilities sector, which has been hot of late. Barclays has slowly been beefing up its investment-grade sales and trading, consistent with its push to become a major U.S. fixed-income player (BW, 6/18). The firm hired Roche roughly two months ago and trader Rich Wolfe shortly afterward. John Stathis, head of global market sales and research, says no further sales or trading hires are imminent, however.

Dresdner Kleinwort Wasserstein is reorganizing its U.S. credit business, according to Neil Neilinger, head of credit products at the firm. Neilinger says the firm plans to hire several more investment-grade traders in the third quarter, and has already begun interviewing people. He says the firm is focusing in particular on the industrial and telecom sectors. Neilinger describes Dresdner as "developing its credit business in emerging markets, high yield, and high grade," but would not elaborate further, and did not return repeated calls.

Fiduciary Trust Company International, a New York City-based portfolio management firm with some $18 billion in taxable fixed-income, is considering an expansion into select high-yield and/or telecom credits, says Stuart Hochberger, executive v.p. and head of fixed-income. The possible move into telecom is in marked contrast to other investors who have been reducing exposure to the sector. Hochberger is pondering this foray because he says telecom has been beaten up badly in recent trading. He says some combination of better prospective profits, combined with additional Fed easing or better growth throughout the economy, might convince the firm to add 3% to high yield, possibly selling investment-grade financials such as the Citigroup (Aa2/AA-) 7.25% of '10. He says that specific credits he is considering for purchase include Global Crossing (Ba2/BB), France Telecom (A3/A-) and Deutsche Telekom (A3/A-), but would not speculate on a timetable for execution.