Credit Suisse First Boston has moved to fill spots on its par and distressed loan trading desk after Joe Russell, head of high-yield trading, moved to CSFB’s Alternative Capital Division and Phil DeSantis, managing director and distressed co-head of loans replaced Russell. “The one change is opening up opportunities for us to move other people internally,” said Don Pollard, global head of CSFB’s syndicated loan group, regarding Russell’s move.
Senior par trader Bob Franz, considered one of the most skilled traders on the street, is moving to fill DeSantis’ distressed spot. “He is a natural to transition into the distressed flow trading seat because he has traded a lot of crossover [stressed/distressed] and he already knows many of the distressed investors,” said Pollard. Vik Natarajan, a par salesman, is replacing Franz and will work alongside par trader and managing director Barry Zamore. Pollard described Natarajan as having “great credit skills” and commented that the firm has had past success moving people internally.
Buyside traders said the effect would not harm CSFB, which in LMW’s survey of loan trading desks is ranked first in distressed and second in par (LMW, 5/17). One portfolio manager at a New-York based fund said “It’s a great desk. They are not going to miss a beat. Bobby [Franz] has been doing distressed for a while. It’s a natural progression [and] he knows everyone in the market.” He also doubted whether losing Franz to the distressed side would hurt the par operations. “Barry [Zamore] is a machine. He could do every trade in the market.”
Another buyside trader was less enthusiastic, but did not see any problems emerging. “Every time things change it creates stress, but this is neutral. Franz has done some crossover before, so it will not be too difficult for him to step up,” said one buyside loan trader. “Franz is a great guy. He gets into the weeds,” he added.
Pollard explained that DeSantis was brought to the bank loan position a year ago after spending four years as a high-yield bond trader. “He’s going back over to the bond side and will be the head of high-yield trading,” Pollard said of DeSantis. “He has the extensive leveraged finance experience that make him a natural for that chair.” DeSantis was co-head alongside Grant Pothast and was given major credit by investors for CSFB’s gains in distressed bank loan trading. In last year’s survey CSFB moved up from third to first with what investors described as a “Herculean” effort. Franz was brought over from Morgan Stanley in 2002. Back then he was described by one investor as the “best young trader on the street.” (6/2/02).