Though UBS Warburg continues to boast of its successful effort to poach star lender Chris Ryan and others from Lehman Brothers, Lehman has quietly been rebuilding its loan shop. Now it is ready to do some bragging of its own.

Mark Lies, Mr. Ryan's successor as head of global loan syndications at Lehman, said deal flow has already begun to rebound. And he said the firm's new loan operation is regaining its late-'90s momentum, looking for more new-issue business, focusing on a broader array of industries, and expanding tie-ins to the firm's high-yield and mergers and advisory businesses.

"Lehman built this on a trading mentality, and a trading mentality can only go so far toward building a business," Mr. Lies said. That, he said, is "why the firm was insistent on going out, finding people like myself, Jon Kitei, Steve Sterling, Carol Buch, who have been in this business, who have done the new-issue business ….

"Trading is a profit opportunity and allows you to support an issuer's deal, but trading is not as advantageous in isolation."

In the late '90s, Lehman was among a hard-charging cohort of investment banks eager to cross-sell corporate loans with other debt products. Holding its own in new issuance despite its trading approach, Lehman led $14.6 billion of leveraged loan deals in 1998, claiming a 4.4% market share and the No. 7 spot in the rankings. It was the highest-ranking investment bank in the field. In the first half of 2000, however, it led just $1.5 billion of deals, for a 0.9% market share and 17th place.

Mr. Lies is a 13-year veteran of Bank of America Corp.'s giant loan shop; he came to Lehman in April after spending a year helping Bear, Stearns & Co. build a loan origination shop. Since April Lehman has created seven new senior level posts, Mr. Lies said. It brought on Mr. Sterling, who joined from Bank of America as a managing director in capital markets; Ms. Buch, who joined from TD Securities as a senior vice president in sales; and Mr. Kitei, who became a senior vice president in sales at Lehman after working at Bank of America and SunTrust Equitable Securities.

Lehman also hired Lisa Konrad, a vice president for vendor financing who worked at Donaldson, Lufkin & Jenrette and at Rothschild; Peter Siedem, a senior vice president in distressed debt from Lazard Freres & Co.; Mark Quinn, a distressed loan trader from Contrarian Capital Advisors; Andrew Keith, a senior vice president in portfolio management from Deutsche Bank; and Thomas Durney, a senior vice president in leveraged finance from Canadian Bank of Imperial Commerce.

"I would argue that the experience differential of what we brought versus what was in before is relatively significant," Mr. Lies said.

For its lending operation in Europe, the firm created the new position of head of capital markets, which it filled with Richard Howell, formerly of UBS.

"Many U.S. firms were willing or felt it necessary to air-drop people from the U.S.," Mr. Lies said. "What we did was to build from a core group of locals."

Mr. Lies said third-quarter numbers will show a significant improvement in market share.

The firm has led several deals recently, including a $350 million loan for Penn National Gaming Inc.; a $215 million facility for ANC Rental Corp., owner of the Alamo and National car rental operations; and a $340 million loan for restaurant franchise Buffets Inc. In the Buffets and Penn National deals, Lehman was the M&A adviser too.

"The truth will ultimately be borne out probably sometime in September," he said predicting a "significant pop-up" for Lehman in the league tables.

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