 |
| Julie Bouhuys |
Wachovia Securities is gunning for top spots in the loan and high-yield business, pinpointing financial sponsors as the key to its growth. The Charlotte-based bank set off to that goal last week by taking a team of heavy hitters from cross-town rival Bank of America. In addition to the leveraged finance markets the firm also wants to be a more significant player in the overall loan market, including investment grade. "We are currently number four, but there is a wide gap between number four and the top three--Citibank, Bank of America, J.P. Morgan," noted Julie Bouhuys, head of Wachovia's fixed income division's credit products group. Financial sponsors represent about 35-40% of the overall leveraged loan market volume and Wachovia's percentage share of that is relatively small, despite holding the number six spot on the financial sponsors league tables, Bouhuys said. "That portion of our business needs to be much more significant in order for us to be a top player in this space," she noted.
The team Wachovia lured from B of A is led by Elton Vogel, who was head of leveraged acquisition finance and restructuring advisory. At Wachovia he will be a managing director and co-head of leveraged finance origination. Eric Lloyd, managing director and formerly head of Wachovia's loan syndications group, is now also serving as co-head of leveraged finance origination. "[Vogel] brings established relationships with some of the largest and most active financial sponsors," Bouhuys said. Vogel's former team members, Gary Wolfe, Jim Jeffries and K.C. Brechnitz, have joined Wachovia as well.
In addition to increasing origination deal flow, Wachovia is also looking to become more active in the secondary loan market. "You can't have a thriving origination business if you don't know where you're going to distribute paper," Bouhuys said. The firm will look to make additional hires across origination, distribution and trading.
Wachovia also plans to become more active in the major sectors that are of interest to the sponsors. "The leveraged market tends to be heavily concentrated in four sectors--consumer products and retail, energy and power, industrial growth, media and communications--account for around 70% of overall leveraged volume across high-yield and leveraged loans," Bouhuys said.
A B of A spokeswoman said the leveraged acquisition finance and restructuring advisory group will now report to Mike Meyer, head of leveraged finance, debt capital markets. She declined further comment.