Bloomberg News

Merrill Lynch & Co., Lehman Brothers Holdings Inc., and Bear Stearns & Co. are on a hiring spree, seeking to grab a bigger slice of the growing $1 trillion market for loans while stock and bond sales slump and demand from institutional investors rises.

The banks hired four senior loan executives last week alone. Donaldson, Lufkin & Jenrette Inc., meanwhile, tried unsuccessfully to get Bank of America Corp.'s top leveraged-finance official, Tom Bunn. The moves underscore investment banks' effort to compete with Chase Manhattan Corp. and Bank of America, who control about half the market. The fight for talent also means fatter paychecks for financiers they're trying to hire.

"Investment banks are trying to fill a hole that's being magnified in this market," said Peter Bethlenfalvy, president and chief operating officer of TD Securities, the investment-banking arm of Toronto-Dominion Bank.

Winning more loan business provides investment banks with an alternative source of fee income as bond and stock sales slow. It also gives them an opportunity to win other business from the companies they lend to.

Merrill got the loan banker it wanted when it hired Amy Miller from TD Securities last week. Lehman, the No. 20-ranked arranger of high-yield loans in the first quarter, picked up Mark Lies from Bear Stearns.

Bear Stearns hired Paul Travers from Merrill Lynch Asset Management to ssucceed Mr. Lies and added Vic Bulzacchelli from Bank of Tokyo-Mitsubishi as a portfolio manager and Ed Cook from Salomon Smith Barney for loan sales.

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