Musical chairs continues at Credit Suisse

Derek Armstrong is leaving Goldman Sachs to return to Credit Suisse where he will run the debt finance team.
Credit Suisse is set to hire Derek Armstrong back from Goldman Sachs to help steer a new debt financing group that will comprise debt capital markets, leveraged finance and structured lending. Conan Tam, also at Goldman and also ex-Credit Suisse, will join Armstrong in making the move back to his old shop.

Armstrong joined Goldman Sachs to head its leveraged finance team in 2004, after an 11-year spell at Credit Suisse, and Tam joined in 2005. According to sources, the plan to bring Armstrong back as head of a revamped group has been three months in the making, which throws new light on the departure last week of three members of Credit SuisseÆs Asia debt capital markets team: Ping Tan, the groupÆs co-head, Patrick Liu and Anny Kim.

That team went back to their old firm, Merrill Lynch, to be re-united with their old boss, Jon Pratt, who left Credit Suisse in September.

Credit SuisseÆs new combined debt financing group, according to the source, reflects how clientsÆ needs are changing. ôThereÆs been a blurring of the line between bonds and loans,ö he says. ôSometimes a bond turns into a loan because the loan pricing just works out cheaper. It doesnÆt make sense to ask your client to go and work with a whole new team, so some banks are looking at adding a common management team to their debt finance operations.ö

This fluidity between bonds and loans is characteristic of the more lucrative end of the debt finance spectrum. High-profile bonds that win league table brownie points and sweeten up key clients, tend to earn thinner fee margins.

The financial sponsors on leveraged buy-outs, in particular, benefit from this unified approach. ôFinancial sponsors often want a mix of bank and bond finance,ö says the source. ôIn the traditional banking model that means the client has to deal with two separate teams just because they want two types of debt in the capital structure.ö

Credit SuisseÆs new team will total almost 25 bankers and the bank is thought to be in the market to fill another two or three people.

Armstrong, who is joining in April, also gets a promotion in the move û he leaves Goldman as a director and joins Credit Suisse as a managing director. He will report to Vik Malhotra, Asia head of the global markets solutions group. Tam starts at Credit Suisse next week.
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