Lorraine Lodge, Convertibles Expert at Merrill, ING, Dies at 52

Lorraine Lodge, who developed a specialty in convertible bonds during a career in New York City and London with Merrill Lynch, ING Barings and Nomura Holdings, has died. She was 52.

She died on Aug. 8 at Calvary Hospital Hospice in the Bronx, New York, according to her sister, Lydia Schinasi. The cause was ovarian cancer, which was diagnosed three and half year ago. With her husband, Steve, she lived in Manhattan and Telluride, Colorado.

In 22 years at global investment banks, Lodge became skilled in hybrid securities such as convertible bonds, which can be exchanged for the issuer’s common stock, and exchangeable bonds, which can be swapped for stock in companies other than the issuer.

In 2005, while at Nomura Holdings Inc., she began moving from research to origination. A colleague from that time, Daniel Oakes, said she was part of the team behind what the financial magazine Euromoney called the “equity deal of the year” -- the sale by KfW, Germany’s state-owned development bank, of 1.1 billion euros ($1.47 billion) of bonds exchangeable for shares of Deutsche Post AG.

Euromoney called the issue “a highly successful first-of-its-kind exchangeable targeted exclusively at Japanese private clients,” and “the first-ever privatization targeted at a specific investor base outside of an issuer’s home market.”

‘Natural Originator’

Oakes, now a managing director and head of international equity capital markets at Commerzbank AG in London, said yesterday in an interview that Lodge was “a natural originator, a very good technical expert, and people in Europe really valued her long history, her high level of expertise, her extremely high level of attention to detail and real commitment to the product.”

Lodge was quoted often in the media on the use of convertible bonds by companies and on their popularity among some types of investors.

“With the investor not having to enter the market and incur transaction costs, the convertible can become more sensitive to the equity and more sensitive to the bond, whichever is rising more,” she said in an interview in 1998, when she was an analyst at Merrill Lynch & Co. in London.

In 2002, when Alcatel SA, now Alcatel-Lucent SA, issued a mandatory convertible bond -- one that must be turned into equity -- Lodge was quoted by Dow Jones Newswires as saying that such transactions “are usually done by companies that really need funds, but don’t want to make it look to their equity investors as if they are selling shares.”

Index Creator

During her 13 years at Merrill Lynch, from 1987 to 2000 in New York and London, she helped create the Merrill Lynch Global Convertible Bond Index and contributed to the convertibles research team that won mention in Institutional Investor’s All-Europe Research Rankings in 2000. Merrill Lynch is now part of Bank of America Corp., based in Charlotte, North Carolina.

She was the co-author of a 2001 report by the Zurich-based Association of Convertible Bond Management that said sellers of such bonds needed to simplify and clarify the language in their prospectuses to avoid hurting investors. The report was prompted in part by a legal skirmish over the conversion of Bank Austria AG bonds triggered by its purchase by HypoVereinsbank AG.

Lodge “was always good in math and found it very interesting,” her sister said yesterday in an interview. She dual-majored in statistics and political science at Northwestern University in Evanston, Illinois.

Derivatives Expertise

During the last 18 months of her life she was an instructor in New York with Alpha Development Ltd., a London-based financial-training firm. On its website, the firm said of Lodge:

“She matches our faculty’s already strong expertise in derivatives, but brings particular focus in the areas of credit analysis and transaction analysis. Participants particularly respond to her ability to bring her front-, middle- and back-office experience to life in the classroom.”

Lorraine Eve Gringer was born on Aug. 23, 1960, and raised in West Nyack and Bedford, New York, the second of three daughters of Don Gringer and Tosia Gringer. Her father is chairman of Bronx-based Allway Tools Inc., which was founded by his father.

She graduated from Northwestern in 1983, her sister said, then entered the workforce before resuming her studies, receiving a master’s in business administration from the University of Pennsylvania’s Wharton School.

Risk Manager

At Merrill Lynch, Lodge handled foreign-exchange risk, then ran technology, budgets and management for the London-based equities business before joining equity research as a convertible-bonds analyst for Europe and Asia.

In 2000 she joined the London office of Amsterdam-based ING Groep NV, the biggest Dutch financial services company, as head of international convertibles research. In 2003 she and about 15 others from her team moved to Nomura International Plc, a unit of Tokyo-based Nomura, Japan’s largest brokerage. She became, with Oakes, Nomura’s co-head of convertible-bond origination for European equity capital markets.

She married Steve Lodge in 1999. Outside work, her interests included skiing, cooking, theater, politics, and enjoying time with her extended family and friends, her sister said.

In addition to her husband and sister, survivors include her parents and another sister, Susan Efron.

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