UBS is stepping back into the covered bond business and has hired two top professionals from Deutsche Bank to spearhead its renewed effort. Dirk Burmeister and Haiko Heuer will start work at UBS in Frankfurt early next year and report to Stephen Bell, global head of trading, who was traveling last week and did not respond to an e-mail. Burmeister, who worked as a senior trader, and Heuer, who was a structured products specialist, will work in similar roles at UBS. Samantha Smith, a UBS spokeswoman, did not comment by press time.
UBS was active in the covered bond market until it closed its desk roughly two years ago, according to one market participant. UBS has hired two other professionals for the new desk; their names could not be determined. As part of its plans to get back into the covered bond business, UBS expects to trade and originate covered bonds. Burmeister and Heuer, who are currently on so-called gardening leave, could not be reached for comment.
UBS and others investment banks, such as ABN AMRO and J.P. Morgan Chase (BW, 11/17), are getting into the covered bond game to generate profits as the asset class' profile continues to rise in Europe. In addition, Lehman Brothers is also looking at entering the covered bond business.
Aside from the debut of the U.K.'s first covered bond this year, other European countries such as Italy, Sweden, Norway, Portugal and the Netherlands are reportedly seeking to make their first forays into the covered bond market. Sweden recently passed covered bond legislation earlier this month and Norway passed a law earlier this year. Meanwhile, Italy, Portugal and the Netherlands are all said to be looking at covered bond legislation.