MBIA to Purchase Securities Advisor
MBIA Inc., the nation’s largest insurer of municipal bonds, was expected to announce today that it will purchase Temecula-based MuniFinancial, which helps cities, counties and local agencies comply with the nation’s increasingly complex securities laws.
Terms of the deal were not disclosed.
Founded in 1988, MuniFinancial advises about 230 municipal clients, including Los Angeles, Irvine and San Francisco, on how best to disclose financial information to bondholders, calculate interest on debt and administer special districts.
The acquisition would strengthen Armonk, N.Y.-based MBIA’s position as a one-stop shop of municipal finance and would bolster its presence in California.
Publicly traded MBIA insured nearly half of all insured bonds sold by local governments and agencies nationwide in the first half of this year. A large percentage of those bonds were from agencies in California, where the Orange County bankruptcy has prompted many cities and counties to secure their municipal bonds with insurance, MBIA said.
“MuniFinancial has a well-established position and we want to extend what they have successfully launched in California to the rest of the country,” said David H. Elliott, chairman and CEO of MBIA. “Disclosure is the buzzword now.”
MuniFinancial has 50 employees in its offices in San Francisco, Chicago, Seattle, Washington, D.C., Temecula and Boca Raton, Fla. As part of the acquisition, its top executives will remain with the firm, including Chief Executive and founder Harry Clark, Managing Director Richard Ashburn and Fritz Goss, director of municipal disclosure.
“The amount of ongoing disclosure about local governments’ finances is only going to increase,” Clark said, as more local governments are subject to the same reporting requirements as public companies, he said.
New Hires
Longtime Los Angeles investment banker Roland Seidler is in discussions to hire a team of brokers and analysts from Dabney Resnick Imperial in the wake of major ownership shifts at the Beverly Hills junk bond firm.
The new team, which includes former Dabney Resnick Managing Director John Merriman, will mean significant expansion at Seidler’s downtown Los Angeles firm, the Seidler Cos.
“We are encouraged by discussions we’ve had and [are] trying to put together something that will make sense,” reported Seidler, who said the firm, with 90 employees, wants to expand its equity research, capital markets and public finance efforts.
Several months ago Dabney Resnick’s co-founder, Judy Resnick, said she sold her 30% stake in the firm to Imperial Credit Industries in Torrance. Resnick, a former Drexel Burnham junk bond trader, is no longer responsible for daily operations at Dabney Resnick, though she will retain the title of chairman. Neil Dabney, the other co-founder, left the firm a year ago.
“I’m working on women’s money management, educating women and speaking to women,” said Resnick, who is focusing her energies on her Resnick Group, which will target women. Her new book, “On Our Own: How I Found Financial Freedom,” will be published in January by Golden Books.
Wayne H. Snavely, chairman of Imperial, is expected to adopt a higher profile at Dabney Resnick and wants the firm to focus on investment banking and high-yield debt rather than money management.
“This gives me the opportunity to be in on the deal flow at Dabney Resnick,” said Snavely. “We want to expand the entire firm, especially corporate finance transactions that will create high-yield debt. We need to get Dabney focused on a few products that they are very good at.”
As an example, Snavely said Dabney recently sold $7 million in high-yield bonds for Recycling Industries, a publicly traded Denver firm. Dabney is expected to underwrite an additional $40 million to $100 million in junk bonds.
Earlier this year, Snavely laid off about 35 employees, including Merriman.
Debora Vrana can be reached via e-mail at debora.vrana@latimes.com or by fax at (213) 237-7837.
