Peconic Securities, an inter-dealer broker, has opened a high-yield operation in New York. Also known as "brokers' brokers" or "Street brokers," firms such as Peconic act as middlemen to allow sell-side desks to buy and sell each other's bonds without disclosing pricing information to their competitors. Peconic already has a convertible bond desk in Garden City, N.Y. The high-yield desk has 12 traders so far and aims to have 15-20 when it is fully staffed, say its three co-heads: Rob DePiro, Tommy Keyes, and Joe Salerno. A few of the traders have sell-side experience, while others come from competing Street brokers, such as Garban Intercapital and EuroBrokers. The firm hopes to eventually broker high-grade bonds as well, says DePiro.
EuroBrokers and Cantor Fitzgerald both had high-yield inter-dealer brokerage operations based in the World Trade Center and have been shut down since Sept. 11, say traders. A Cantor spokeswoman says the firm has no plans to re-enter the high-yield market. Euro Brokers officials could not be reached. The head of a different sell-side desk agrees that the market is "marginally over-brokered as it is, even after Sept. 11," but says that Peconic is doing well out of the gate. "The fact that they are gaining some traction is a little surprising but speaks to them doing a good job so far," he says.