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CORRECT: Meredith, Not Williams, Chmn Of Bond Dealers Group

Mar 10, 2008 Market Outlook

CORRECT: Meredith, Not Williams, Chmn Of Bond Dealers Group

Last Update: 3/10/2008 11:39:32 AM

DOW JONES NEWSWIRES

Fourteen regional bond dealers have formed a new lobbying association to make
sure they’ve got a seat at the table when federal regulators begin to wade into
bond-liquidity issues.

The idea had been “kicking around for years” according to Michael Decker, one of
the association’s newly minted lobbyists, but recent events - a crisis of
liquidity that has spread from the subprime sector to corporate and municipal
bonds and beyond - spurred action.

“The stress in the credit market is probably the contributed factor to taking
this from an idea stage to the execution stage,” said Mike Nicholas, Decker’s
partner at the new group, entitled the Regional Bond Dealers Association, which
was incorporated earlier this year.

Both Decker and Nicholas are long-time veterans of the fixed-income lobbying
world. The new group will have offices in Alexandria, Va., just a short hop from
the policy makers in Washington.

The duo declined to name the group’s budget, saying they expect to add more
members in the near future. But their resources will be substantial. “We will
have enough resources to have an effect on the policy process. I think that’s
fair,” Nicholas said.

The lobbyists said they will focus on issues important to their clients that
might otherwise have been overlooked. By way of example, the group will advocate
eliminating taxation under the Alternative Minimum Tax of public/private
partnership bonds called “private activity bonds.” They are issued, for instance,
when municipalities build airports that are then used by private airlines.
Standard municipal bonds don’t fall under the tax.

“The pool of AMT payers has been expanding pretty rapidly and those investors
aren’t interested in buying (these) bonds,” Decker said.

The group especially wants to have a voice if the Securities and Exchange
Commission decides to expand their corporate-bond transaction reporting system to
other securities - which have been increasingly difficult to price as liquidity
dries up, leading to multi-billion dollar write-downs.

Decker said mandatory price reporting - especially in assets that aren’t traded
regularly - limits the incentive of dealers to buy distressed bonds because
everyone knows what they paid.

The group also plans to serve as a “forum” for the industry - sponsoring
conferences and the like for member firms.

Of the chartering 14 firms, only one - San Francisco-based Wells Fargo & Co.
(WFC) - is publicly traded. Mark Meredith, president and chief executive of FTN
Financial, is chairman oKenneth Williams is the vice chairman. Kenneth Williams,
chief executive of San Francisco fixed-income security brokerage Stone &
Youngberg LLC, was named vice chairman of the group. Wells Fargo’s executive vice
president for brokerage services, Silas Matthies, will serve as
secretary-treasurer. Members will pay fees to the group, which is set up like a
non-profit cooperative, based on the size of their business.

-By Andrew Edwards, Dow Jones Newswires; 201-938-5973;
Andrew.Edwards@dowjones.com

DOW JONES NEWSWIRES

Fourteen regional bond dealers have formed a new lobbying association to make
sure they’ve got a seat at the table when federal regulators begin to wade into
bond-liquidity issues.

The idea had been “kicking around for years” according to Michael Decker, one of
the association’s newly minted lobbyists, but recent events - a crisis of
liquidity that has spread from the subprime sector to corporate and municipal
bonds and beyond - spurred action.

“The stress in the credit market is probably the contributed factor to taking
this from an idea stage to the execution stage,” said Mike Nicholas, Decker’s
partner at the new group, entitled the Regional Bond Dealers Association, which
was incorporated earlier this year.

Both Decker and Nicholas are long-time veterans of the fixed-income lobbying
world. The new group will have offices in Alexandria, Va., just a short hop from
the policy makers in Washington.

The duo declined to name the group’s budget, saying they expect to add more
members in the near future. But their resources will be substantial. “We will
have enough resources to have an effect on the policy process. I think that’s
fair,” Nicholas said.

The lobbyists said they will focus on issues important to their clients that
might otherwise have been overlooked. By way of example, the group will advocate
eliminating taxation under the Alternative Minimum Tax of public/private
partnership bonds called “private activity bonds.” They are issued, for instance,
when municipalities build airports that are then used by private airlines.
Standard municipal bonds don’t fall under the tax.

“The pool of AMT payers has been expanding pretty rapidly and those investors
aren’t interested in buying (these) bonds,” Decker said.

The group especially wants to have a voice if the Securities and Exchange
Commission decides to expand their corporate-bond transaction reporting system to
other securities - which have been increasingly difficult to price as liquidity
dries up, leading to multi-billion dollar write-downs.

Decker said mandatory price reporting - especially in assets that aren’t traded
regularly - limits the incentive of dealers to buy distressed bonds because
everyone knows what they paid.

The group also plans to serve as a “forum” for the industry - sponsoring
conferences and the like for member firms.

Of the chartering 14 firms, only one - San Francisco-based Wells Fargo & Co.
(WFC) - is publicly traded. Kenneth Williams, chief executive of San Francisco
fixed-income security brokerage Stone & Youngberg LLC, was named chair of the
group. Wells Fargo’s executive vice president for brokerage services, Silas
Matthies, will serve as secretary-treasurer. Members will pay fees to the group,
which is set up like a non-profit cooperative, based on the size of their
business.

-By Andrew Edwards, Dow Jones Newswires; 201-938-5973;
Andrew.Edwards@dowjones.com

Mark Meredith, president and chief executive of FTN Financial, is chairman of the
newly formed regional bond dealer’s association. Kenneth Williams is the vice
chairman.

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