Securitization People and Markets

Metropolitan West Asset Management has hired Hahn Kang as specialist portfolio manager in charge of ABS, according to Tad Rivelle, MWAM chief investment officer. Hahn joins MWAM in Los Angeles from Lehman Brothers in New York, where he worked for seven years as an ABS trader, with a focus on secondary prime mortgage ABS. He will report to Rivelle. Kang says that his position was newly created, in order to give the asset management firm a new exposure in the ABS business.

Stephen Ledoux and Neil Augustine, the co-lead portfolio distressed debt portfolio managers at Morgens, Waterfall, Vintiadis & Co., where they oversaw $500 million in mostly distressed loans and some distressed bonds, have left the firm to join Rothschild Inc. The two will advise creditors and debtors during bankruptcy processes. As a result, MWV has shut down its distressed debt product and has returned assets to clients, which included foundations and endowments, pension plans, and high-net-worth individuals, according to Susan Waterfall, marketing director at MWV. She says some of the firm's clients have opted to reinvest in the firm's long-short equity fund, adding that some $50-100 million already has been switched over.

A massive incomprehensible juggernaut rushing down on them too fast with too many hidden parts is how even the most sophisticated banking institutions were reading the Basel Committee second capital accord when the deadline Basel set for commenting on it expired last Wednesday. Despite the May 31 deadline, an official of the American Bankers Association said last week that ABA would not be ready with comments on the incomplete draft Basel had put out until mid or late June and suggested October as a target for more definitive comments on what ABA's members think of the completed draft.

As happens every year, Street bond players blamed last week's thin trading on the fact many buysiders were hunkering down to prepare for the annual Chartered Financial Analyst exam to be held Saturday. Joining in the fun was a spokesman for the Association for Investment Management & Research, a.k.a. the Association for Ignoring Marriage Responsibilities, who had his best material ready to roll. Have you heard the one about the test-taker who chose to use the six hour test to discuss his summer vacation plans? He hadn't put in the requisite 250 hours of studying and had to do something to fill the time, since he'd told his boss, who was in the seat behind him, that he been pulling all-nighters in order to prepare.

J.P. Morgan Securities has promoted two high-yield analysts,Doug Conn and David Walker, to be co-heads of high yield research. Conn says the two fill a post vacated by Steven Ruggiero, who left for UBS Warburg a few weeks ago.

Harley Bassman, a 16-year veteran of Merrill Lynch's fixed-income options trading area, most recently as a managing director on the firm's OTC debt options desk, is the firm's new head of the real estate structured finance department. Bassman says this breaks down into running the firm's North American CMBS, MBS and ABS trading and sales efforts. He would not comment on why the change was made. While this is a new title within the mortgage trading operations he has effectively replaced Greg Odland, a 15-year Merrill veteran, whose new brief has yet to be determined, according to Odland. Odland, who came to MBS trading from the government trading desk several years ago, would not comment on why the shift occurred, but did note that he is planning on staying at Merrill. Bassman says that he is planning on growing certain areas within the MBS operation, but would not disclose which desks, nor provide a timeframe. Bassman will report to Tom Likovich, head of debt markets trading and sales in North America.

J.P. Morgan Securities has lost another veteran CDO pro as Mario Verna left to join Deutsche Bank, according to a Deutsche Bank CDO executive. Deutsche Bank, which plans on beefing up its CDO group, according to this executive, has made Verna a director in its global credit products group. Verna's position was created because of the department's expansion, according to a Deutsche Bank source, and he is reporting to Marc Pfeffer, chief operating officer of the global credit products division, and will be based in New York, structuring CDOs. He has been in the structured products business seven years, including a stint at Fitch as a structured products analyst. At newly merged J.P. Morgan Chase, where he was v.p. with the CDO group, Verna reported to Romita Shetty, the head of the CDO group. Verna would not comment on his motivation for leaving, nor would he disclose his new compensation package. As of press time, Shetty was traveling in Europe and did not return a phone call seeking comment. Former CDO group executives at J.P. Morgan Securities point to a string of recent defections to rivals, including Verna, John Clements (BW, 4/9) and several unspecified others, as proof of the difficulty in merging the two high-profile CDO operations.

European high-yield investors are saying the popularity of Europe's largest-ever junk bond says far more about the paucity of European non-telecom junk paper, than about the quality of the E550 million ($440 million) issue by Messer Griesheim (B2/B+). The first quarter saw European junk issuance round out at around $2 billion, against the $30 billion chalked up in the U.S. The investors express concern over the structural debt subordination, which, they say, puts them in a very precarious position in the event of default. There are also questions about information on the explanation of cost-cutting plans, the ability to raise funds via asset sales, and the quality of communication between top executives. Nonetheless, the bond was reportedly oversubscribed by E1.45 billion ($1.28 billion) and trading at E104.5 last week. A high yield syndicate official at Goldman Sachs, which underwrote the deal, declined comment.

Goldman Sachs priced a deal last Thursday for Target Stores (A2/A) on its Dutch auction Web-based Open Book system that almost got pulled because of a technical snafu, according to a deal participant. It was the second such snafu in the past several weeks (BW, 5/1). The deal, a $550 million five-year note, was eventually priced at 101 basis points off the five-year Treasury curve and placed via traditional syndicate method, although not before the bond market rallied nearly 13 basis points, shutting investors out of a potentially profitable trading opportunity. A Goldman spokesperson confirmed the problem, but would not comment on the nature of the glitch. A phone call to the treasurer's office at Target was not returned by press-time.