Bank of America Corp., the biggest U.S. lender, appointed Shaun Dreyer as head of investment-grade loan syndication for Europe, the Middle East and Africa as the bank seeks to parlay its acquisition of Merrill Lynch & Co. into a bigger share of debt underwriting outside of the U.S.
Dreyer, a 14-year veteran of the firm, joins as Bank of America jumps to fifth most-active underwriter of high-grade loans in Europe this year, with 5 percent of the $103 billion market, from 21st in 2009, according to data compiled by Bloomberg. It replaces U.S. rival JPMorgan Chase & Co., which has fallen to 14th.
“We feel it is time to focus on developing our business in areas where we have the opportunity to capture more market share,” Peter Hall, global head of investment-grade syndicated capital markets with Bank of America Merrill Lynch, said in an interview.
Bank of America, based in Charlotte, North Carolina, relied on North America for 82 percent of revenue last year. The bank overhauled its board amid criticism from investors over its 2008 purchase of Merrill Lynch, which had three times as many corporate customers in Asia, Europe and the Middle East.
“Loan demand in the U.S. is still quite weak, so if they can find creditworthy borrowers overseas, it does make sense to expand lending outside of the U.S.,” said Gary Townsend, president of Hill-Townsend Capital, a Chevy Chase, Maryland- based investment firm with $60 million of holdings in financial companies.
At stake are more than $300 million in annual fees underwriting European loans, and relationships with borrowers that may lead to more lucrative work such as stock sales and mergers advice. Outstanding corporate loans held by U.S. banks have declined to $1.27 trillion from $1.65 trillion in October 2008, according to data from the Federal Reserve.
Competition among banks is intensifying as their earnings rebound and they emerge from the worst economic slump since the Great Depression.
Bank of America leapfrogged 26 spots to third place among underwriters of German loans after helping to arrange 4.2 billion euros ($5.2 billion) of funds for German drugmaker Merck KGaA to acquire Millipore Corp., Bloomberg data show.
The bank also underwrote $13 billion of debt for Anheuser- Busch InBev NV, the biggest beer maker, a $10.2 billion deal for commodities trader Glencore International AG, and a 10 billion- euro revolving credit for Enel SpA, Italy’s biggest utility, Bloomberg data show.