S&P Removes Barbara Duka As CMBS Ratings Chief, Report Says

Standard & Poor's has removed Barbara Duka as chief if its commercial mortgage-backed securities ratings group that was at the center of controversy in mid-2011 when its internal review resulted in the derailing of a Goldman Sachs Group and Citigroup bond issue, according to a trade publication.

S&P hasn't named a replacement, according to Commercial Mortgage Alert's Feb. 3 issue. It wasn't known if Duka will stay with S&P, it said.

The rating firm in December pushed out David Jacob as head of structured finance ratings and reassigned chief credit officer Mark Adelson. S&P President Doug Peterson has been working to restore the firm's reputation and market share that has been struggling since its ratings failed to prepare investors for mortgage defaults that would help trigger the financial crisis. Peterson succeeded Deven Sharma in September.

Calls to a S&P spokeswoman and Duka weren't returned.

Duka's boss, Grace Osborne, continues to oversee the commercial and residential ratings units, Commercial Mortgage Alert said.

S&P's CMBS unit has been a lightning rod for investor and Wall Street criticism since the financial crisis. It came under fire in July when a last-minute internal review of a possible discrepancy in guidelines left the firm unable to deliver a rating on a $1.5 billion CMBS that Goldman Sachs Group and Citigroup had thought complete. The two dealers had priced the bond and were ready to distribute it to investors when S&P said it wouldn't rate the issue.

Damage to Goldman Sachs and Citigroup likely became costly as the CMBS markets turned volatile. The dealers had to turn to Moody's Investors Service and Fitch Ratings for a new grade and ended up selling a CMBS in September under a more conservative structure.

Margins on the CMBS also likely shrank because the underlying loans were originated with expectations of a more robust new-issue market, analysts said.

-By Al Yoon, Dow Jones Newswires; 212-416-3216; albert.yoon@dowjones.com

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