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Derivatives

Credit Analysts Get Hands On

Convertible and capital structure arbitrage trading desks at firms including Commerzbank Securities and CRT Capital Group in the U.S. are increasingly on the prowl for professionals with backgrounds as high-yield analysts as a greater focus is placed on fundamental credit analysis skills. Carlos Mejia, v.p. at executive search firm the Options Group in New York, said the market is shifting from a focus on volatility and historical performance data to one that values a more credit intensive approach. This has become more important in the aftermath of fallen angels such as WorldCom.

CRT Capital Group, a Stamford, Conn.-based broker, recently snared Chris Weldon a distressed convertible securities trader and former analyst from Lehman Brothers, and Weldon's analytical background was among the main reasons why the firm wanted to hire him, according to Michael Vaughn, managing member at CRT, and to whom Weldon reports.

Raj Dave, a former high yield analyst at Commerzbank in New York, meanwhile recently started trading capital structure arbitrage for the firm's proprietary desk. Omar Bayoumi, head of the Americas at Commerzbank, explained that many shops are recognizing the need for a close integration between research and trading. For intermediate trading positions particularly research backgrounds bring a strong base which are often easily adapted to the technical requirements of trading, he said. Dave declined comment.

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