Bear Stearns Merges CDO Groups

  • 24 Mar 2002
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Bear Stearns is combining its synthetic CDO group with the bank's cash flow underwriting CDO group, according to LMW sister publication, BondWeek. A senior CDO banker at the firm said the merger of the synthetic and cash flow groups is designed to avoid double pitching of CDO deals by two separate teams of bankers to the same collateral managers. Senior managing director Lesley Goldwasser will oversee both synthetic and cash flow CDO originations, the banker said.

Another aspect behind the move is that synthetic CDOs are becoming more and more actively managed and the same collateral managers, or clients of the bank, routinely manage deals that can be alternatively cash flow-based or synthetic in structure. Similarly, the same CDO deal may be hybrid and combine both technologies, requiring synthetic and cash flow bankers to work together.

A senior CDO banker at Bear Stearns said six synthetic CDO bankers, specializing in origination, have been reassigned to the cash flow CDO group headed by Goldwasser. The bankers had reported toPeter Croncota and Anthony Liberatore, senior managing directors and the heads of the credit derivatives group's sales effort. There have not been, nor will there be any layoffs due to the moves at Bear Stearns. Croncota referred calls to Goldwasser, who declined comment. Liberatore referred calls to Russell Sherman, a spokesman with the bank. Wendy De Monchaux, senior managing director and head of credit derivatives, did not return calls.

The recent change at Bear Stearns reflects a growing trend on Wall Street in which CDO structuring, trading and sales are being handled under one umbrella, said a banker with Banc of America Securities. He adds that his firm has operated this way since the inception of its credit structured products group and said that, to his knowledge, only two banks have kept their cash flow and synthetic CDO operations separate, citing Deutsche Bank and Credit Suisse First Boston. Michael Herzig, head of CDO distribution at DB and Chris Ricciardi, head of structured credit products at CSFB, did not return calls.

 

  • 24 Mar 2002

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Rank Lead Manager/Arranger Total Volume $m No. of Deals Share % by Volume
1 Bank of America Merrill Lynch (BAML) 4,755 19 11.75
2 Citi 4,288 14 10.60
3 Rabobank 2,633 4 6.51
4 Goldman Sachs 2,615 4 6.46
5 Barclays 2,603 8 6.43

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1 Citi 84,503.31 246 12.96%
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3 Wells Fargo Securities 65,360.43 206 10.03%
4 JPMorgan 46,548.88 148 7.14%
5 Credit Suisse 37,323.31 115 5.73%