BMO Nesbitt Burns is planning to become a credit-derivatives market maker for clients. Credit spreads have been widening in the cash markets, spurring more interest from clients in credit derivatives as a means of gaining synthetic exposure and a means to hedge credit exposure, said David Hyma, executive managing director and head of capital markets in Toronto. Clients interested in the product include internal BMO clients, such as loan portfolio managers, asset swap portfolio managers, and collateralized debt obligation stucturers, and external clients, including corporates, financial institutions, and regional commercial banks.
As part of this move, the bank plans to hire within the next 18 months up to 10 marketers, structures, and traders in London, Toronto, and the U.S., said Hyma.
The bank recently hired Ernie Porchetta, marketer/ structurer at CIBC World Markets in New York, to market and structure credit derivatives in Chicago. Porchetta reports to Kevin Holme, executive managing director, heading up derivatives marketing for North America in Chicago.
