Morgan Stanley has created a new management structure for its corporate bond research group, organizing analysts into teams across sectors and across the credit curve from high-yield to high-grade. The goal is to help investors make relative value comparisons across industries, and across the increasingly narrow divide between junk and high-grade credits, according to Bill Reiland, the firm's head of U.S. credit research. Morgan Stanley started to address the gap between high-yield and high-grade last year (BW, 8/19).
Reiland has appointed six team leaders to lead small groups in similar sectors that have a high concentration of crossover credits. The team leaders are: Matt Clark, Doug Runte, David Allen, Monica Keany, Drew Hanson and Doug Colandrea. Reiland explains that he, in a sense, reports to Clark, who leads the consumer team, encompassing retailing, consumer products, healthcare and gaming and lodging. Runte, a transportation analyst, will also be responsible for homebuilding. Allen, a media analyst, will lead a group of four media and cable analysts. Keany will oversee general industrials credits. Hanson and Colandrea are both team leaders in telecom and technology team, because of the broad spectrum of high-yield and high-grade credits. The team structure is still being worked out and may change. However, Reiland says certain sectors, such as energy, are unlikely to be integrated as they have a credit barbell structure--with several companies solidly in investment-grade or junk territory, and very few in the middle. While other firms have research teams for media and telecom, few if any have created teams out of other sectors, such as healthcare, retail and gaming, say sell-side analysts.