Securitization People and Markets

J.P. Morgan Chase is assembling a collateralized debt obligation, employing the Morgan Intermediate Collateralized Loan Obligation Securities (MINCS) structure, with American Express Asset Management as investment manager, according to J.P. Morgan Chase officials. Market players note that this marks the first time that AmEx will manage a structured product consisting entirely of loans. In March, AmEx hired Yvonne Stevens and Lynn Hopton from SunAmerica Corporate Finance, a move that industry observers at the time said would allow AmEx to expand its in-house structured product management capabilities to include loan structures. The Minneapolis-based firm has managed CDOs with high-yield collateral, as well as some with relatively low loan components, totaling some $3 billion. Calls to Stevens, Hopton and other AmEx officials were not returned by press time. Marketing on the transaction, which is expected to close in March, began late last week. The deal with AmEx would be the bank's sixth MINCS transaction. J.P. Morgan originally developed MINCS to compete with Chase Securities' Chase Secured Loan Trust (CSLT) by providing an investment-grade rating and leveraged exposure to bank loans (BW, 11/16/98). The MINCS structure came to be regarded by some investment managers as superior to CSLT for its greater transparency, and market players note that the relative popularity of MINCS could lead to the phasing-out of the CSLT structure. The first MINCS transaction, a $700 million deal that came to market in April 1999, was managed by TCW Asset Management. Others followed with managers including ING Capital and Pilgrim Investments.

The rumor whipping through market last week had Thomas Bunn, former head of leverage finance at Bank of America, heading to Morgan Stanley Dean Witter, but Bunn said nothing was brewing there. As first reported on LMW's Web site, Bunn said he has "not been in any negotiations with Morgan Stanley. I'm flattered you all think I'd be able to get a new job 10, 20 days after my departure," he quipped. Bunn left B of A in December, a move that surprised many in and out of the bank. William Kourakos, head of high yield capital markets at Morgan Stanley, was on vacation and could not return phone calls. Bram Smith, managing director of global high yield capital markets at Morgan Stanley, did not return calls. Officials at B of A declined to comment.

Italease, the leasing company affiliated to Italy's network of banche popolari (co-operative banks), launched its fifth securitisation this week with a Eu588.3m deal through UBS Warburg. Italease Finance SpA is the company's first securitisation under Italy's new securitisation law.

Credit Suisse First Boston introduced two structural advances to the Portuguese securitisation market last Friday when it launched a Eu200m deal for three consumer finance subsidiaries of Banco Português de Negócios. Chaves Funding No 1 Ltd is the first Portuguese deal to include a triple-B class, and the first to use an unrated bank as holder of the deposit that allows interest to be paid on the bonds without withholding tax.