Securitization People and Markets

With Bear Stearns putting up $3.2 billion to stave off collapse at its High-Grade Structured Credit Fund and Merrill Lynch, JPMorgan, Lehman Brothers and Deutsche Bank auctioning off the hedge fund’s assets, the subprime meltdown looks like it may claim many of this year’s bonuses. According to industry analysts however, that may not be the case – unless you’re in securitization or you work at Bear Stearns. “I don’t think I’d like to be a mortgage-backed trader right now, and I trust the collateralized debt obligation guys are wondering whether they should move into equity derivatives, but this is a relatively modest sector," says Brad Hintz, analyst at Sanford Bernstein in New York (and former Lehman CFO). "Outside mortgaged-backed businesses, Bear Stearns and Lehman, I don't see it's going to be material for other players at all.”

Citigroup in New York has hired Rahul Murlidharan from JPMorgan for a new role as a director responsible for U.S. credit derivatives structuring.

Fitch Ratings may cut its collateralized debt obligation manager rating on Bear Stearns Asset Management, part of Bear Stearns, due to troubles arising from bets on subprime mortgages, reports Reuters. Bear Stearns on Friday said it would provide up to $3.2 billion in financing for a struggling hedge fund it manages. But sources said a second fund is still working out a restructuring plan with creditors.

XL Capital Assurance has hired Josephine Musso from Bear Stearns as a managing director responsible for residential mortgage-backed securitizations in its consumer ABS business.

Bear Stearns will reduce leverage and improve liquidity in its High-Grade Structured Credit Fund by stepping up with a $3.2 billion loan, Sam Molinaro, cfo, said in conference call today.

FirstLight Financial, the new middle-market firm, closed on its first admin, agented and lead arranged deal last Monday.

Thomas H. Lee Partners is setting up a private investing partnership headed by AIG SunAmerica alumnus James Hunt. THL Credit Group will be a cash investor looking at a diversified credit strategy, investing in first liens, second liens, mezz debt, structured equity and public debt instruments.

Ares Management has launched a private debt middle-market financing platform in Europe led by Gordon Watters, who joined from Barclays Bank.

Cohen & Co. has hired three Jefferies Capital Management analysts for its Emporia Capital Management asset management and lending subsidiary.