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Norton Rose Fulbright and Katten have added to their legal teams
Asset manager wants to offer more products to institutional investors
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The speed with which investors have dived into a new type of retail offering has surprised institutional investors, but it's also got them eyeing the possibility it may soak up excess supply and tighten spreads. In the last four weeks, Bank of America Capital Management has sold $600 million of the new InterNotes, part of a $3 billion shelf, and Household International is also planning a $1 billion issue. "I'm really surprised they've been able to place this much paper so quickly," says Robert Hickey, head of fixed income for Van Kampen Investments in Oakbrook Terrace, Ill.
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SG Cowen is releasing two high-yield bond analysts as part of a move to end efforts to underwrite high-yield credits in the aerospace, consumer products and energy sectors. A senior official in New York says the action is being taken because the firm has not been able to develop high-yield bond issuance from its existing commercial lending relationships in these sectors. The two set to leave are Paul Shaum, the head of the six-person junk research team, who covers aerospace and consumer products companies, and Gloria Holzman, who covers energy. The senior official says that as part of this effort, the firm will unwind its loan portfolio in these sectors, which was valued at approximately $1 billion.
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Only markets, not regulators can determine what capital a bank should hold, the Shadow Financial Regulatory Committee said last week, and it accused bank regulators of going down a path toward creating increasingly complicated capital formulas that are counter-productive. The current specific target of the Shadow Committee's criticism was the Basle Committee's revised capital accord proposal, issued in January, which Shadow member Charles Calomiris termed "a disaster."
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Ettore "Reno" Bianchi has left Credit Suisse First Boston, where he was the senior transportation research analyst, and is joining Salomon Smith Barney. Salomon has been looking for an analyst to cover enhanced equipment trust certificates for some time, says an industry official, adding that the bank has been especially active in underwriting EETCs and wants to bulk up its coverage. Salomon was lead manager most recently of US Airways' $458 million EETC in January. Bianchi, who is one of a handful of analysts on the Street that covers the EETC market, confirms his departure from CSFB, declining further comment. Calls to CSFB and Salomon were not returned.
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The downshift in ONI Systems stock, on the back of a general decline in the technology and telecom sector in the past few weeks, has created an investment window for the company's busted convertible bonds, argues Venu Krishna, research analyst at Salomon Smith Barney in New York. But some portfolio managers are having a hard time swallowing this advice, fearful that the market has farther to fall before the bottom is reached. "The paper could go still lower, particularly in this distressed market where odd things can happen," says a buyside portfolio manager..
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Jeff Glasse, former head of trading at Toronto-Dominion Bank, has joined Barclays Capital as head of par loan trading. Glasse is in place to recharge Barclays' bank loan trading effort, which dropped off about two years ago. A senior official at Barcays could not be reached for comment on the bank's reentry to the trading arena.
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Tom Hudson has left Amroc Investments to take time off from the business, according to those familiar with him. Hudson, a distressed trader, was at Merrill Lynch and Goldman Sachs before landing at Amroc last year. Spokesmen at Amroc did not offer any official comment on Hudson's departure. He could not be reached for comment.
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The Federal Reserve's top lawyer has signaled that the central bank means to use the "complementary activities" authority it has under Gramm-Leach-Bliley in a way that will have major positive effects on the financial industry. Fed General Counsel Virgil Mattingly said in a Feb. 15 talk to bank lawyers that he wanted to stress that the Reserve Board would be so flexible in approving activities under this provision of law that it would enable securities and insurance firms to acquire banks and banks themselves to remain competitive in the race against non-bank institutions.
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Credit Suisse First Boston is eliminating assignment fees for clients, the latest bank to do so in an effort to improve liquidity. No retail buyer will be charged a fee on a deal for which CSFB was the agent, and banks that have also eliminated assignment fees will not be charged. Don Pollard, global co-head of the syndicated loan group, said the bank hopes this will be an incentive for other banks to do the same. "This is a change the market was calling for," he said. "As one of the top four underwriters, we're eliminating fees to promote liquidity."