Looking to beef up its distribution capabilities for the securities it underwrites, First Union Corp. has formed a global capital markets unit and hired a Lehman Brothers veteran to run it.

Robert Teller is joining First Union as a managing director after 12 years at Lehman, where he was executive director and head of Lehman's European dealer businesses in London. He will report to Jerry Schmitt, a First Union executive vice president and co-head of capital markets.

"This new unit will enable us to better price and distribute the capital markets products First Union originates," Mr. Schmitt said.

Charlotte, N.C.-based First Union has been charging into the investment banking business in recent months, agreeing to buy two securities firms and one bank with section 20 powers.

Mr. Teller said Europeans are particularly interested in investing in American high-yield debt right now. He said he expects to pick up some new originations in high-yield debt in Latin America but does not plan to focus on Asia at first. "But we want to keep the door open," Mr. Teller said, "particularly as Asia settles down."

A managing director from First Union's international division, Andy Oleksiw, will join Mr. Teller at global capital markets. Mr. Teller said he does not plan to hire anyone else soon.

"We don't expect to set up a separate international group," Mr. Teller said. "Instead we will work with the heads of fixed-income and international corporate finance."

First Union Capital Markets and Wheat First Union are the investment banking divisions of Wheat First Securities Inc., First Union's section 20 subsidiary.

This subsidiary was formed after First Union bought Wheat First Butcher Singer, a Richmond, Va.-based securities firm, in February. First Union also has a pending acquisition of a Charlotte, N.C.-based mergers and acquisitions shop, Bowles Hollowell Conner.

First Union's purchase of CoreStates Financial of Philadelphia is expected to close by the end of this month. CoreStates has its own section 20 subsidiary.

Internationally, both First Union and CoreStates have focused on trade finance and correspondent banking for financial institutions overseas. But Mr. Schmitt said he anticipates that global capital markets, with Mr. Teller's experience in capital markets and Mr. Oleksiw's relationships with financial institutions abroad, will quickly expand that.

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