RBC Capital Hires Macquarie’s Maggio for Loan Trading Group

RBC Capital Markets hired Matt Maggio to trade loans as the bank builds its credit business in the U.S.

Maggio, who is based in New York, joins from Macquarie Capital and reports to Jeff Resnick, head of high-yield loan and distressed trading for the investment-banking arm of Royal Bank of Canada, said Sanam Heidary, an RBC spokeswoman.

RBC has been building its credit business as the amount of loans made to speculative-grade U.S. borrowers grew last year by 8.3 percent to $640.6 billion, according to data compiled by Bloomberg. The bank is one of the four firms arranging the loans backing the $24.4 billion leveraged buyout of Dell Inc.

The firm hired Kevin Coleman and Chris Sym last year for high-yield sales, and Greg Steele for high-yield trading. RBC brought on Sean Peters in 2011 after combining its new-issue and secondary loan sales teams.

The bank was the 11th largest arranger of high-yield bonds in the U.S. last year with $11.7 billion, after ranking 13th in 2011 with $5.8 billion, Bloomberg data show. It was the 10th biggest underwriter of leveraged loans in 2012, compared with 12th in 2011.

There has been $32.8 billion of leveraged loans arranged in the U.S. this year and $50 billion of high-yield bonds, according to Bloomberg data. After reaching a one-year high of 97.8 cents on the dollar Jan. 25, loan prices dropped to 97.3 cents yesterday, according to the S&P/LSTA U.S. Leveraged Loan 100 Index.

Leveraged loans and high-yield bonds are those rated below BBB- by Standard & Poor’s and less than Baa3 at Moody’s Investors Service.

CLO Business

In October the bank hired Allen Fu from Citigroup Inc. to run collateralized debt obligation trading, a new business for RBC. It hired Ming Tang from StormHarbour Securities LP to trade CDOs and collateralized loan obligations.

There were $52.6 billion of CLOs backed by widely syndicated loans arranged in the U.S. last year, according to Bloomberg data. Bank of America Corp. expects as much as $75 billion of CLOs, which pool high-yield, high-risk loans and slice them into securities of varying risk and return, to be created this year.

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