In a coup for the smallest of the three major rating agencies, Fitch IBCA Inc. has lured industry veteran Mary Jane Ziga to its ranks of municipal structured finance analysts.
On Wednesday, Ziga abruptly resigned her post at Standard & Poor's, according to officials at that firm, where she developed a reputation as one of the industry's key rating experts on secondary market derivatives and other structured products.
At Fitch, she joins former Standard & Poor's analyst Ronald McGovern, as well as a former Moody's Investors Service official, Trudy Zibit, both of whom have joined Fitch in the past three years and form the core of the firm's structured finance team.
Industry insiders say that the addition of Ziga at Fitch should help the agency compete in the tax-exempt rating game, which on the structured-product side has long been dominated by Standard & Poor's and Moody's. In the last year, Fitch has begun rating secondary market derivative programs and recently added Lehman Brothers -- a major player in the tender-option bond market -- as one of its clients.
Officials at Fitch say that Ziga will be responsible for rating secondary market derivatives as well as lease pools and other municipal structured finance products.
Ziga will report to Kathy McManus, managing director of the public finance group, and will also work with McGovern, Zibit, and Lisa Bowman, another analyst.
Sources note that the move, while surprising, does not mean that Fitch will automatically be hoisted to the top of the market. Unlike investment bankers, rating analysts are not known for taking clients with them when they defect.
Instead, the market tends to focus more on the value that the rating agency can add and not the individual analysts involved, according to Gail Sussman, a managing director at Moody's.
"The allegiance is to the rating agency," Sussman said. "The investment community focuses on the rating."
However, the addition of Ziga does give a boost to Fitch's attempt to make inroads in the structured-products market. It has lagged as that market has taken off this decade, largely because it did not have an inventory of bank ratings, which are crucial to products that carry bank liquidity facilities or credit enhancement.
That changed with the merger of Fitch Investors Service and London-based IBCA Ltd. in 1997, which was well-established in the European bank ratings industry and, to a lesser extent, the U.S. industry.
Fitch has since built up a presence in the rating of debt that carries credit enhancement, but it has been only in the last year that it has started to rate the more complicated derivative products.
Others in the market see the move by Fitch as typical of the way that it has built its presence in the public finance market.
Errol Brick, president of Killarney Advisors Inc., which offers derivatives advice to a wide array of health care and higher education clients, says that Fitch is following an example set by investment banks in the past: Let the larger rating agencies develop talented people to the senior level, then make those people offers they can't refuse.
"Fitch's structure is designed to attract key, fairly senior people," Brick said. " They've built up their practice. They're looking for high quality people, and Mary Jane is a superb structured finance analyst."
Zibit noted that the move accompanies a ramping up at the firm that has seen market share growing. "We have been seeing a tremendous increase in business," she said. "It's coming from all players -- issuers as well as banks and intermediaries."
