Chase Manhattan Corp. has dismissed 10 salespeople and traders in its high-yield bond business in preparation for its merger with Chemical Banking Corp., market sources said.
Those leaving include John Kolmer, Chase's managing director of high- yield finance, and Bob Dennis, managing director of high-yield trading. Mr. Kolmer is regarded as one of the "leading citizens of the high-yield market," one source said.
Between them Chase and Chemical employ about 75 high-yield traders, salespeople, and analysts.
"We maintain a strong commitment to this business, and will have one of the largest high-yield shops on the Street," a bank spokesperson said.
"Part of the issue for Chemical is that they have a very capable team that's been built up over the last few years," said a banker. "The tribe can have only one chief, and in this case, Chemical won."
Wilfred Finnegan, a managing director of Chemical, will head the high- yield business, reporting to Chemical's head of Global Investment Banking, James B. Lee Jr.
Bankers said the new Chase was unlikely to lose business because of the dismissals, because high-yield bond traders are not the ones on the front lines of a relationship with a corporate client.
The dismissed executives enter a favorable job market. The high-yield business usually experiences some turnover in the beginning of the year, after annual bonuses have been awarded, executive headhunters said.
They added that new entrants into the high-yield business are hiring. These include Swiss, German and Canadian banks as well as commercial banks with new investment banking units.
The high-yield business, in which capital is raised for companies with debt ratings below investment grade, is growing because high-rated companies do not provide sufficient yields to banks in today's marketplace.
"Banks that have have tried to break into this business with anything other than exprienced high-yield people have found that it's a difficult market to get into," said one high-yield practitioner.
Chemical and Chase had approached the market differently. Chase won high-yield business through its corporate coverage groups while Chemical developed its business through its activity in leveraged acquisitions.
