BankBoston Corp. has launched the industry's second loan syndications tracking and analysis unit.
The bank's new Market Research and Analysis group is designed to focus broadly on the entire senior loan market as well as specific industry sectors. It will provide information for internal use and publish reports for other bank loan investors and issuers.
The unit, which is similar to one established by BancAmerica Securities Inc. last year, is the latest example of how the bank loan market is converging with the bond market. The type of in-depth analysis the loan research units provide is typically associated with the high-yield bond market.
BankBoston decided to establish its group after it used original reports on the syndications market for the cable industry to attract issuers and broaden the bank loan investor market.
"It helps give the issuers, certainly, comfort that you really know what's going on in the market when you structure their deals," said Mary Etta Schneider, managing director and group head of syndications at BankBoston. "And it certainly adds credibility on the investor side.
"I think that it's going to be an important part of how you add value to the syndication and capital markets businesses," she added.
Many money-center banks perform some syndication market analysis for internal use, and all research the issuers they underwrite. But BancAmerica was the first to establish a separate research arm for the loan market.
"The thing that really has separated us from the pack is that we've treated it as something more than a few analysts in the back of the shop, crunching numbers," said Keith C. Barnish, senior managing director for syndications at BancAmerica. "We have really used it as a marketing tool both from the issuer and investor side."
By providing detailed analysis of pricing and structuring trends in loans to a particular sector and expanding the investor market for loans, the new unit will allow BankBoston to be more aggressive in pricing, Ms. Schneider said.
"On a go-forward basis, it's sort of a requirement," Mr. Barnish agreed.
BankBoston's new group has been staffed with five professionals from the bank who have experience in syndications, in lending to a particular industry, or both.
Robert Goddard, managing director, will run the group, and Robert Piepenberg, a certified financial analyst, will be head of research. The group plans to issue its first report on syndications for high technology companies this summer.