Robert L. Riviere and Paul Jenison have launched New York-based Riviere-JenisonSecurities, a nationwide broker-dealer that will focus on deals in asset-backedsecurities, structured finance, and corporate debt.
Its clients will include municipal issuers, financial enterprises, and other U.S.-basedcorporations.
Riviere is a principal of the former Barton Creek Ltd., while Jenison is a formerexecutive managing director of asset-backed trading and finance at UBS FinancialServices. In an interview yesterday, Riviere said that when working on municipal deals,the firm will target "exotic" or nontraditional municipal issuers.
Currently, it is working on a $17 million asset-backed deal for an undisclosedmunicipality in California that will use the capital to primarily purchase broadbandhardware also services. The tax-exempt status of the deal has not yet been determined,Jenison said. The deal is a private placement and is backed by receivables frombroadband subscribers. Riviere said the municipality is a wealthy community that doesnot have access to large corporations to provide broadband services to its residents. Asa result, it is raising the capital to do so.
Riviere, who has specialized in asset-backed and municipal securities for 15 years, saidRiviere-Jenison would target exotic deals because they are more profitable thantraditional municipal deals. Fees on traditional deals would be 3/8ths or half a pointper thousand, but fees on exotic deals can run up to two percentage points per thousand.
At Riviere-Jenison, Jenison will be on the investment banking side, while Riviere willfocus on placing the deals.
The men have worked together in the past. At Barton Creek, Riviere worked with largerWall Street investment banks to place debt that was considered too small for the banks.
While Jenison was at UBS and Riviere at Barton Creek, both helped securitize lawyersfees on the national tobacco settlement. Those deals were backed by fees owed to lawyersfor their work on behalf of California and Mississippi in the settlement - a $52 milliondeal and a $50.5 million one, respectively - under the Litigation Settlement MonetizedFee Trust. The larger firms acted as the underwriters, but Barton Creek acted as theplacement agent, Riviere said.
Both realized the value that could come from working together and so decided to startthe new firm, Riviere said. Jenison left UBS on June 30, 2003. At that firm he alsoworked on asset-backed deals for municipal issuers, including the New York MunicipalWater Finance Authority.
Both expect to work on similar deals through Riviere-Jenison. In securitizing suchdeals, Riviere-Jenison will examine the credit of the tobacco companies, which usuallyhas its ratings passed on to the underlying bonds. Riviere said the firm usually sellsthe bonds and then collects the fees. The proceeds are used by the law firms for capitalpurposes.
Riviere-Jenison is opening offices in Austin, Boston, and Santa Monica, Calif. It istargeting middle-market issuers because many do not have access to such services fromlarger broker-dealers.
The firm hired Keith Marks as managing director of the West Coast office in SantaMonica, Russ Salisbury as managing director of the firm's Boston operations - who in1989 established State Street Bank's structured finance activities - and Stuart Silpe, adirector in the New York office responsible for transaction management.
Barton Creek Ltd. was a product of the now-dissolved Barton Creek Capital Corp., which abuyout group that included Riviere purchased in 1998. Barton Creek Capital's name wasthen changed to Barton Creek Ltd., which was phased into Riviere-Jenison Securities onOct. 1, 2003.
