Banc of America Securities has placed the firm's high grade bond and credit derivatives business lines under one head and is planning a principal finance unit as part of an overhaul of its fixed income division. Principal finance is the hottest area of the structured credit arena, with several firms, such as Merrill Lynch (DW, 8/3), setting up desks. Market officials speculated that BofA's motivation for setting up the desk is to take advantage of the ripe secondary CDO market. Jeff Hershberger, spokesman in New York, confirmed the reorganization.
BofA has made Charles McLendon, former head of global structured products, head of the investment grade corporate bond, short-term and credit derivatives business to boost its plain-vanilla and structured credit businesses. The combined position includes both the high-grade bond and credit derivatives desks. McLendon was out of the office and could not be reached.
The bank has also set up a global structured finance group, of which George Ellison and Chris Hentemann have been named co-heads. The group comprises asset-backed securities, collateralized debt obligations and real estate, including commercial mortgage backed securities. They are also responsible for certain elements of the firm's global structured products business, including structuring and securities arbitrage. Ellison was traveling and could not be reached while Hentemann did not return calls.
McLendon, Ellison and Hentemann have also formed an operating committee to develop and manage the principal finance group.
Beau Cummins, head of global foreign exchange, has also broadened his brief. He is now head of investment grade-liquid product debt capital markets. This group combines high-grade capital markets, syndicated capital markets, private placements and middle markets syndicated capital markets, as well as rates, corporate sales and foreign exchange corporate sales. Cummins did not respond to messages.
