Canadian Imperial Bank of Commerce has lured away four key staffers from Citicorp's structured securitization team to set up a noninvestment-grade shop of its own.
Ken Wormser, John Gevlin, David Duncan, and Ralph Inglese migrated to CIBC this week.
Mr. Wormser and Mr. Gevlin join CIBC as managing directors; Mr. Duncan and Mr. Inglese, as directors. They are based in the New York office of the Toronto-headquartered banking company.
The hirings were the latest step in a buildup of CIBC's U.S. operations. Citicorp, which continues to regard securitization as a growing business, maintains a sizable securitization unit, despite losing some high-profile executives.
The team will focus on delivering securitization solutions to noninvestment-grade issuers as well as structuring collateralized loan and collateralized bond obligations and financing those through the public, private, or conduit markets.
The team will report to Michael J. Neilson, managing director and head of CIBC Wood Gundy's structured finance group.
"This is a tremendous piece of the jigsaw puzzle in our overall business," Mr. Neilson said. "It's an area we have wanted to expand for quite some time, and this team established a market presence in bond, loan, and debt offerings from a public and private underwriting business."
Through Sept. 18, CIBC estimated, it was the third-largest sponsor of multiseller asset-backed commercial paper programs nationwide, with a 6% market share.
Citicorp was the securitization leader in the same period, with a 28% share, followed by First Chicago NBD Corp., with a 7% market share, according to CIBC estimates.
"It's a crowded market, but there are still some opportunities for business there," said a banker in another securitization group. "CIBC clearly has some hurdles to overcome, but they've got the right ingredients: a well-known name and a strong credit rating. But the spreads are thin, and they will have to provide some competitive pricing."
Mr. Wormser and his team have noninvestment-grade expertise that complements the high-yield underwriting capabilities CIBC gained in last year's acquisition of Argosy Group, a New York investment bank.
Argosy has done $2.8 billion worth of financing so far, according to bank estimates.
Departure of the four from Citicorp's securitization unit leaves it with about 16 securitization executives in addition to the 60-member back-office team.
"Securitization is a growing business, and we've had a record year," said a Citicorp spokeswoman, "well over $24 billion this year. And because of that, when others try to get established, they try to hire people who are already leaders."
But one former employee of the Citibank unit said the departures could hurt it. "Citicorp pioneered many of the asset securitization products, and they have been the leading firm in their application. Without these people they are incapable of using those capabilities."
