Banking has traditionally been a male domain and while it has been quick to embrace technological changes, some areas still have few female traders. Not so the MTN market. At least half of the top 10 banks now have women traders on the MTN desk, with many working in origination too. And on the investor and issuer side some of the most successful names are female, such as SEK's Johanna Clason and Kommunalbanken's Kristine Falkgaard. MTNWeek takes a look at four of the top female dealers in the market, including two heads of desks, and asks what makes a successful trader and how the market has changed since they first became a part of it. Frair Appleby-Walker Morgan Stanley Frair Appleby-Walker joined Morgan Stanley's MTN trading desk in May last year, having worked at Barclays Capital (Barclays) since September 1997. She joined Barclays straight out of university, where she studied banking and international finance at City University Business School. In January 1998, after the trainee period, Appleby-Walker moved to Barclays's MTN trading desk and has since clocked up almost three and a half years in the market. But entering the banking world was not an easy decision for Appleby-Walker, who was a keen junior tennis player until the age of 18. She then faced the choice of either going to America to train professionally or furthering her education. She chose the latter. And it seems that there are no regrets, as Appleby-Walker finds her job varied and stimulating. She says: "It's a great role because it's so diverse and never the same each day. You have to be an originator, trader and salesperson to be successful." The other traders at Morgan Stanley are Klaus Svendsen, head of the desk, and Richard Tynan. On the subject of being the only woman on Morgan Stanley's desk, Appleby-Walker says: "I don't think there are any advantages to being a woman, but there are no disadvantages either. Opportunities are there for men and women alike." And Appleby-Walker has seen the market mutate from the days when structured business in Europe showed healthy flows, to today's market where most structures are done out of Japan. But this is not set in stone and Appleby-Walker thinks that the structured business is showing signs of coming back to Europe. Until it does, the market will continue to see a high volume of vanilla deals, and since investors are not getting their yield through structure, they are looking to the lower-rated borrowers. Appleby-Walker has also learned a lot about how to bring the investor and issuer to an agreement. She thinks it is important to spend time on educating each side in the deal and ensuring the issuer is comfortable with the structured product. Liaising with the origination team and with the sales force is an effective way to understand what the borrowers and investors need. Evie Christodoulidou HSBC Evie Christodoulidou joined HSBC seven years ago on a graduate trainee programme and worked on the euro and sterling bond trading operation for two and a half years. Her strong economic and mathematical background (she studied economics and econometrics at Manchester University) stood Christodoulidou in good stead for a banking career, but she also wanted to use her communication skills at the same time as working in an international environment. Her vivacious personality is a great asset on an MTN desk, where the relationship with the investors and issuers is half the job. Christodoulidou says: "What I like most is speaking to people - the ability to communicate clearly is vital and we're on the phone a lot of the time. You learn a lot about different cultures and countries." The variety of the MTN market was one of the most difficult aspects to get to grips with according to Christodoulidou. "The greatest challenge was learning so much in a short time - a deal can take any form, currency or issuer type and so it is a really steep learning curve," she says. Christodoulidou joined HSBC's MTN desk two years ago. Fergus Kiely and Annemarie Ganatra are the other traders on the desk. Although the MTN operation has been headed by Kiely since 1998, all three traders share responsibility for geographical region and type of issuer. But Christodoulidou has seen the market change in the two years that she has been a part of it. She says: "When I first started we spent an overwhelming amount of time on structured products, but now it has become more vanilla and this is a reflection of people moving down the credit curve. There's been growth in triple-B credits and that is the way the market is heading, so we're always looking for new issuers." And she predicts that investor interest in lower credits will grow and that more issuers will sign MTN programmes to meet the demand. She says: "There are good euro-flows and they're going to be a big part of the market. There will be a lot more credit-intensive trading and a growth in issuers setting up MTN programmes." Christodoulidou is very aware that communication is key, not only to create good professional relationships with your desk colleagues, but, more to the point, with the investors and issuers you are trying to bring together in a trade. She says: "If a trade isn't working, you may need to do some educating on both sides of the equation, but it's always about price and yield. You have to make sure you're always in line with the market and that you are informed. That involves speaking to secondary market traders and credit research teams." Women are widely-perceived as being better communicators than men, but Christodoulidou doesn't think that being a woman distinguishes her in any way: "I don't think that women have an advantage in the MTN market - it is not a part of banking where women are a minority. Likewise there are no clear disadvantages." Rachel King ABN Amro Rachel King has been in MTNs for five years, working for most of that time on a structured products desk. She now heads the trading desk at ABN Amro, London. But before joining, King was at Chase Manhattan, Sidney, in her native Australia, and before that she worked at Merrill Lynch in London. She has been in banking since 1990, when she was accepted onto a graduate traineeship, having studied an economics degree. She has not found the world of banking tough and does not see it as a man's world, especially not the MTN market. She says: "I don't think that the business is so male dominated these days. There are not that many all-male desks around. And really it comes down to your own skills." The market has grown since King joined and many companies that traditionally obtained their funding from bank loans are now coming to the capital markets to raise money. But King predicts further changes in the coming year. She says it is quite likely that more single-A and triple-B issuers will come to the market, and she suspects the investors will find it difficult to keep up with the number of new issuers joining the market. At the moment lower-rated issuers are unlikely to sell structured notes, but King thinks this is an area that could see change as well. She says: "Investors are wary of taking credit risk and interest-rate risk together, but that may change as the market develops." And King foresees other changes as well: "In terms of e-commerce type changes, I imagine there will be an increase of service providers offering access via various internet sites to non-proprietary information such as offering circulars, research and ratings information - i.e. information that is required by all dealers. Also I think we can expect to see CP and MTN desks operating more closely in future, leveraging off each other where possible." An important aspect of the job of a trader is negotiation and King feels that much of the success of a trading desk depends on making sure that the investor and issuer both understand each other's reasons for the levels they are offering and asking for. King says: "Arriving at a level that both parties feel is fair and represents value is, in my view, the difficult part and is achieved by good communication on the part of the MTN dealer." One of the more frustrating aspects of the market for King is placing an issuer's paper at levels tighter than those it is posting for its public deals in the secondary markets. King says: "This is less of a problem for structured deals, however it is definitely still an issue as this market becomes much more transparent. But of course it is more of a problem for vanilla deals where there is pretty much full transparency. I think this has become more apparent in the past 12 months as there has been strong investor demand for vanilla deals. Investors find it very hard to justify buying an MTN private placement for five years at Euribor+20 if the issuer has a liquid outstanding 2006 bond trading at Euribor+30." But although there is a growing number of issuers in the market, King feels that there is still work to be done and is certainly not about to start feeling complacent. She says: "One of the challenges will be to keep identifying investors to buy the paper of the growing number of issuers coming to the MTN market." Gayle Turner Commerzbank Gayle Turner came to Commerzbank as head of the trading desk in February this year, after working on JP Morgan's MTN desk for three and a half years. She now works with Julia Abbott, who has responsibilities not only in trading, but also on the origination side. Before that Turner traded derivatives linked to MTNs at JP Morgan - training that she thinks is an excellent background to working on an MTN trading desk. She started at JP Morgan on a graduate trainee scheme, having graduated in economics at Exeter University. Turner says: "I always wanted to be involved in client-related business in a bank. I love the atmosphere of the trading floor - the personalities and the pace. It's quite a stressful busy job but the people make it." And unlike the other traders profiled here, Turner believes there are some advantages to being a woman, and that the higher number of women in MTNs than in other sectors of the banking profession makes it a more competitive market. She says: "There are some advantages to being a woman in this profession - it is always nice to be recognized on the phone or in person. But the ratio is probably much more balanced in the MTN market than in fixed income as a whole. Maybe that is why the market is so competitive." But she agrees that the market has matured since she became part of it, in that issuers are more open to structures and issuance has become easier. Turner says: "The market has changed in many ways in three and a half years - in some ways it has become more commoditized. Issuers have become much more sophisticated and even some corporates now feel comfortable with structures. It's getting easier to get issuers involved with a range of products." And Turner is very clear about the right way to go about doing a trade and says that persistence and the ability to find solutions to any problem are what make a successful trader. She says: "Investors aren't stupid - they know where value should be, but we also have relationship responsibilities towards the issuers. You are constantly being pulled apart so you have to find a balance. I always try to go into a trade knowing where I think they should post. It's all about trust. If you mis-price, you might not win the trade and if you do win it, they might not do business with you in future. You have to think of every possibility and not take no for an answer." Commerzbank is always looking for niche markets - and Turner is very aware of new opportunities opening up and the investor's appetite for new areas. She says: "Investors are always looking for new names, regions and credits - they've been very active. And new markets are always opening up - we've just done the first single-A Hungarian forint note for SNS Bank."
June 22, 2001
