Nomura to Exit Underwriting of High-Yield Bonds

Nomura Securities, Japan's largest brokerage, said Monday it will cease the origination, sales, and dealing of high yield securities, saying it "did not fit the long-term business strategy."

Twenty employees in the high yield group were fired in conjunction with the action.

A spokesman said the company still has a "strong commitment" to the business, but market sources said that Nomura's lack of depth in high-yield clients made it difficult to profit in underwriting.

Some observers ascribed the move to Nomura's absence from the syndicated loan market, which can provide high-yield clientele.

Ted Virtue, managing director at Bankers Trust, said Nomura's action accents the difficulty of breaking into that market. "I suspect this isn't the last one," he said, referring to downsizing moves.

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