Securitization People and Markets

Countrywide Securities is continuing to effect strategic hires in its MBS sales and trading operations (BW, 4/2), according to Countrywide Capital Markets President Ron Kripalani. Over the past three to four weeks, three staffers have been added to its Los Angeles headquarters: Cliff Corrall joined from J.P. Morgan Chase, James George arrived from Credit Suisse First Boston (where he came over from Donaldson, Lufkin & Jenrette), and Brian Sager joined from UBS Warburg (prior to that he was at PaineWebber). Kripalani says all three positions are new, but declined comment on the possibility of additional hires in the near term. On a daily basis, all three will report to L.A. sales manager Mac Humphries. A senior official with the firm reasons that additional hires are likely "given the amount talent available because of consolidation on Street [MBS] secondary desks" over the past year, as well as the record refinancing (and thus origination) volumes seen at parent Countrywide Credit Industries.

A number of buysiders were taken aback by last week's 10-15 basis point tightening in corporate spreads during another round of equity market turmoil, and some are forecasting there may be further tightening. "It's rather unusual to watch a corporate rally when stock prices go down," says Greg Habeeb, portfolio manager at Calvert Asset Management Group, who runs $2 billion assets for the Bethesda, Md.-based firm. Players put the tightening down partially to technicals, as some Street firms were caught short in the final week of the quarter, and positive fund flows in to the mart.

Countrywide Securities, the debt capital markets arm of mortgage lending giant Countrywide Credit Industries, has tapped several Street pros to fill newly-created slots in its MBS sales and structuring units at its Los Angeles headquarters. On the sales side is Jim Tennille, a former pass-through trader in Charlotte for several years with First Union Capital Markets, who started last Monday. He reports to national sales head Mack Humphries; at First Union, he reported to MBS trading chief Tim Coyne. Coyne says that he has assumed Tennille's duties, and wouldn't comment on his departure. Tennille says although a switch from trading to sales is a challenge, the combination of working at a shop with "an intense concentration in one product area that is expanding rapidly" was too good to pass up.

Issuance picked up on the week as corporate treasurers took advantage of low absolute yields to push debt into the market. Despite the selloff in equities, the tone in corporates remained firm as money continued to flow into the sector. Average deal size increased and the weighted average credit quality of issuance improved as well. Unlike high yield, where there has been a significant reversal of risk appetite in March, BBB corporates have kept pace with AA bonds. That said, bondholders are increasingly demanding that new issues include protection from deterioration in credit quality. American Home Products included a step-up coupon to compensate bondholders for downgrade risk, as did France Telecom in its jumbo deal last month.

Steve Wood, the longtime Banc Of America Securities financial markets economist and managing director, has left the firm to join online start-up Financial Oxygen, a newly launched electronic bond trading and portfolio management firm, as head of its economic advisory service, according to Chris Nichols, director of content. Wood, who will report to CEO Robert Oxenburgh, is to be responsible for developing economic commentary on data releases and Treasury market movements, as well as possible Federal Reserve movements. Wood joined approximately three weeks ago. His analysis will be offered as part of the analytics package at Financial Oxygen, which is aiming to be an online, one-stop transaction, pricing and analytics site for "middle-market" banks and thrifts that have investment portfolios between $50 million and $1 billion. A B of A spokesman confirmed his departure, declining further comment.

A Capital Hill hearing to be held Wednesday will provide a vent for remaining discontents about the regulators' merchant banking rules and one witness will use the occasion to suggest Congress modify the Gramm-Leach-Bliley Act to relax the ban on merchant banking cross-marketing. A committee aide confirmed that the capital markets subcommittee of the House Financial Services Committee will hold the hearing, taking testimony from both regulators and industry witnesses. Attorney Robert Kabel, who will testify on behalf of the Bank Private Equity Coalition, said last week he would propose amending GLBA.

Imperial Capital, a high-yield boutique based in Beverly Hills, is seizing upon securities industry consolidation and cutbacks to expand its sales and trading roster. Its most recent pickup is Scott Siemers, who joined the firm's New York sales team earlier this month as senior v.p. He was a senior junk trader at J.P. Morgan, until he was let go after Morgan merged with Chase Manhattan. Siemers reports to Steve Hornstein, a former head of the high-yield trading desk at Donaldson, Lufkin & Jenrette.

Perry Beaumont, a longtime sell-side bond research pro who once ran Smith Barney's global fixed-income research effort, is opening a money management shop that will focus on "low-alpha" assets like Treasuries and agencies. East Hampton, N.Y.-based Beaumont, who just completed a two-year stretch as head of fixed-income research for the French insurance and financial holding company giant AXA, is confident that he can grow the asset base to the target level of $3 billion. He argues portfolio managers are going to be motivated to outsource low risk sectors, and focus on more complex sectors where returns are greater, like high-yield and MBS.

Peter Siedem is heading to J.P. Morgan Chase's distressed desk from Lehman Brothers, according to market watchers. Siedem was the head distressed trader at Lazard Freres before switching to Lehman about a year ago. He could not be reached for comment. A Lehman spokesman declined to comment. Officials at Chase would not comment.