Bank set to axe New York CDO trustee business
Bank set to axe New York CDO trustee business
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BoNY's CDO trustee business is by and large ex-JPM, and the majority of the staff are still in Houston. The Houston team started servicing CMOs and CBOs in the 80's (before they were called CDOs). They're the trustee on practically every CDO ever launched!
Well, how many business models remain today that still get paid even when the markets are dead? The old IB distribution model is blown and cost of securitization looks set to increase (which will no doubt impact structuring fees). Annuity-based fees never looked better!
That has never been a great business, has it? The Trustees were invited to the opulent CDO party where the banks and the rating agencies were feasting on champagne and caviar, while the Trustees nibbled on bread and olives. One day banks & rating agencies created a big mess, run out of the party and the Trustees were left standing there and cleaning up the mess
Not too long ago the trustees were locked in a battle fighting over talent. Query whether the NY office was meant to service new business or handling spillover from their Houston services. I agree with the comment that trustees are being called upon to play very important roles in deals right now (ABS CDOs as well as CLOs) and for them to downsize is disheartening.
Interesting that when trustees are most needed (when deal covenant and triggers start failing), they slash the number of people/analysts working reporting on these deal issues...
There seems to be a plethora of Structured credit proefessional refugees around these days especially in New York and this doesn't help much..
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Comment by: Anonymous. Posted 14 years ago [2009-07-28 13:26:12]