H. Russell Fraser

It is with deep sadness that we mourn the passing of Russ Fraser. Russ passed away on November 21, 2012 at his home in Littleton, CO. Click here to view his obituary.

Induction Speech for H. Russell Fraser

Inducted November, 1998

On November 12, 1998, FIASI inducted H. Russell Fraser and Wayne D. Lisky into its Hall of Fame. The award recognizes lifetime contributions to the understanding of fixed income instruments. President Larry Taylor presented H. Russell Fraser with the award. A synopsis of Mr. Taylor’s remarks follows.

Russ Fraser began his career in 1963 on the buy-side at Philadelphia Life Insurance Company. In 1967, he moved to Standard & Poor’s where he developed the process for rating corporate bonds. His duties included managing corporate debt ratings and supervising the agency’s research and analysis of corporate bonds. In 1975, he moved to Paine Webber where he did credit research for the sell-side. There, he was a member of the board of directors and headed the company’s corporate bond products trading and sales activities. In 1980, he went to AMBAC, America’s oldest municipal bond insurer.

Under his direction, AMBAC’s assets grew from $35 million in 1980 to more than $1 billion at the end of 1988. Between 1989 and 1997, Fraser served as chairman and CEO of Fitch Investor Services, Inc., a bond rating agency. During his tenure there, Fraser led Fitch into a twelve-fold increase in revenues and a return to profitability. In 1997, Fitch merged with IBCA, a London-based rating agency that specializes in bank and sovereign debt ratings. In October 1997, Fraser launched American Capital Access, a financial guaranty company specializing in insurance of bonds that are unrated or have credit quality levels of single-A, triple-B, or double-B.

Fraser was a founding member of FIASI and served as our president for two terms.

Besides his professional accomplishments, Russ owns a ranch in Cody, Wyoming. He and his wife, Patsy, own the 160-acre Double Diamond X Ranch on the south fork of the Shoshone River. The ranch is often the site of professional conferences and seminars, including sessions on health care, education, structured finance and revenue bonds. Business attire is not permitted.

Acceptance Speech for H. Russell Fraser

A synopsis of remarks by H. Russell Fraser, a Founding and Life Member Upon His Induction Into FIASI’s Hall of Fame on November 12, 1998

In accepting the Hall of Fame award, H. Russell Fraser, CEO of American Capital Access, said the financial guaranty industry is very exciting and that the party is just beginning. Wearing a ranger’s outfit more suitable for the canyons of Wyoming than Wall Street, Russ Fraser accepted his induction into FIASI’s Hall of Fame in an amiable manner. Looking back on his life in fixed income, Russ Fraser remembers the people, the money, the fun, and the challenge. He credits his wife, Patsy, with helping his success.

In his early days at Philadelphia Life, he wore colored shirts so he did not last very long there. At his next job with Standard and Poor’s, he met Dick Wilson, the “Saralee of Fixed Income” in that “nobody doesn’t like Dick Wilson.” He met other talented people, who soon left; this made an easy road to promotion for him. At S&P, he realized the importance of ratings: In 1970, Penn Central Holding Company had a bond issue that was rated BB. This dried up the liquidity for Penn Central and culminated in the bankruptcy of the firm.

His biggest surprise in working in the fixed income industry was in the structured market. The highest rating enhancement American Capital Access gives is an A rating. Prior to ACA, the only type of credit enhancement a firm could buy was a AAA rating. Firms that came to ACA were therefore considered the “cream of the crap.” The idea of offering less than impeccable ratings has caught on and now at least six new financial guarantee companies offer the lower ratings.

This is just one example of how the market is full of surprises. Mr. Fraser suggests people in the industry should make money, have fun, and appreciate the market’s surprises.