John Hallacy, the former head of Bank of America Merrill Lynch's municipal research who in July left amid a department shakeup, will join Assured Guaranty as a managing director of public finance.
Hallacy will contribute to Assured's weekly municipal publication and develop the company's marketing and business origination efforts, Bill Hogan, senior managing director of public finance at Assured, said in a press release Wednesday. Hallacy, whose new position became effective Monday, will report to Chris Chafizadeh, head of new business origination at Assured.
"His extensive professional history, which encompasses both investment banking and bond insurance, fits right in with Assured Guaranty's leadership position in the municipal bond insurance business," Hogan said.
Hallacy, 57, served as head of the firm's municipal bond credit research department for three years until a June reorganization that saw four of seven of the team's members exit. In all, Hallacy had a 34-year career at Bank of America that included roles as a tax-backed and general municipals research analyst as well as a managing director in a public finance division within global markets and investment banking.
"This is an exciting time to join Assured Guaranty," Hallacy said in the announcement. "The benefits of bond insurance are clearer than ever, and its new muni-only bond insurer, Municipal Assurance Corp., is positioned to expand the market. It's great to be part of the industry leader."
Bond insurers, with a market penetration of just 3% as of midyear, may see a rebound in the near future. Rising interest rates and stress in the U.S. municipal market has made the insurance product more marketable, Standard & Poor's Ratings Services said in a report Tuesday. On Aug. 9, Citigroup Global Markets said bond insurers are poised for a rebound.
The financial guaranty industry isn't a new area for Hallacy, who, between stints at BofA Merrill Lynch, spent almost a year at MBIA Inc. as a managing director in the tax-backed underwriting group. Before joining BofA in 1990, Hallacy worked in the bond insurance industry for more than six years, with stints at Financial Guaranty Insurance Corp. and Bond Investor's Guaranty, until that firm's acquisition by MBIA. At both companies, Hallacy led groups covering risk analysis and underwriting in the general obligation, lease and special tax area.
"We are very pleased to have John on board," Dominic Frederico, president and chief executive officer of Assured, said in the statement. "With over 35 years of active participation in the municipal market, John brings a wealth of knowledge and experience to Assured Guaranty."
In June, Hallacy, along with Susannah Page and Howard Sitzer, departed from BofA Merrill's municipal research team. A source at the time said the firm was going in a different direction, changing the group's focus from credit to strategy.
Hallacy said after the announcement that he planned to assist his wife, medical doctor Mary Ann LoFrumento, with the Hands up for Haiti relief effort after an earthquake devastated the island.
Bank of America hired Phil Fischer to reprise the role as head of the municipal research team after Hallacy's exit. Fischer was head of the group from 2004 until 2009, when he retired. After he left BofA, Fischer started a consulting firm with municipal bond attorney John Sprung, where Fischer had worked as a managing partner.
Upon Fischer's return, the group was renamed "municipals and indices research," from "municipals research."
Hallacy is a past chairman of the Securities Industry and Financial Markets Association municipal credit research committee, as well as former chairman of the Municipal Analysts Group of New York.
A frequent guest at industry events and meetings, Hallacy is set to speak on Oct. 10 and Nov. 6 at the Bond Dealers of America's national fixed income conference and Bloomberg's state and municipal finance conference, respectively.
