RBC Capital Markets hired Ming Tang to trade collateralized debt obligations as issuance of CDOs backed by loans has more than tripled this year.
Tang joins from StormHarbour Securities LP where he traded CDOs and collateralized loan obligations, said Sanam Heidary, an RBC spokeswoman. He is based in New York reporting to Allen Fu, who joined the investment-banking arm of Royal Bank of Canada (RY) in October, she said.
RBC is setting up a CLO trading business as volume of the funds has grown to more than $45 billion, the most since 2007, according to data compiled by Bloomberg and Morgan Stanley. The bank has been making hires the last two years across its credit business as it has climbed to the 10th most active underwriter of leveraged loans in the U.S. this year, from 15th in 2010, Bloomberg data show.
“We are continuing to bolster our overall sales and trading effort in U.S. credit as we strategically grow our global underwriting business,” Mike Meyer, global head of credit at RBC Capital Markets, said in an e-mailed statement. “We have made significant strides in this business, having recently cracked the top 10 in the leveraged-loan league tables in the U.S.”
The bank is the 11th largest arranger of high-yield bonds in the U.S. this year with $10.2 billion, after ranking 13th in 2011 with $5.8 billion, according to Bloomberg data.
RBC has been building its credit business, hiring Kevin Coleman and Chris Sym in the last five months for high-yield sales. Coleman, a managing director, worked at Macquarie Capital and Sym worked at Royal Bank of Scotland Group Plc, Heidary said.
In May, Greg Steele was hired for the firm’s high-yield trading group. He also previously worked at Macquarie Capital, Heidary said. RBC hired Ryan Atkinson earlier this year as head of distressed, according to Bloomberg data.
In 2011 the bank brought on Sean Peters from Citigroup Inc. as it combined its new-issue and secondary loan sales teams.
There have been $45.3 billion of CLOs backed by widely syndicated loans arranged this year, an increase from $11.7 billion in 2011, according to Bloomberg data. JPMorgan Chase & Co. (JPM) is forecasting $60 billion to $70 billion of CLO sales in 2013 and as much as $80 billion of issuance in 2014, according to a Nov. 21 report.
CLOs pool high-yield, high-risk loans and slice them into securities of varying risk and return.
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