RBC Hires Trio for New HY Effort

Although some may consider this to be one of the worst possible times to enter the high-yield corporate bond market, as last quarter's issuance level was among the lowest in recent memory and spreads remain wide, the Royal Bank Financial Group has decided to open a high-yield shop staffed full of Street veterans.

RBC Dominion Securities, the U.S. broker dealer of the Canadian company, hired three Street pros to spearhead what reportedly will be a full-service group in the high-yield market.

Sources close to RBC said that the bank's hiring binge has not ended, and that further hires and additional expansion plans should be announced soon.

The bank plans to create its own origination, sales, trading and research groups, under the helm of Andrew Scace, head of RBC Dominion's global markets division, and ultimately supervised by Gordon Nixon, head of corporate and investment banking for RBFG.

The new shop will be run by Peter Parent and Max Holmes, two of the top junk officials at Gleacher & Co., and Gary Katcher, a former top trader at Merrill Lynch.

Parent and Holmes did not return phone calls last week.

Parent was head of high yield sales at Gleacher, and also has served in junk sales at Merrill and Lazard Freres, and traded high yield bonds at market kingpin Donaldson, Lufkin & Jenrette.

Holmes, who was head of high-yield capital markets at Gleacher, also had a four-year tenure at Salomon Brothers, where he was a high-yield strategist and ran its bankruptcy research. He began his career at junk legend Drexel Burnham Lambert, where he served as senior vice president.

As for Katcher, he was among the top junk officials who left Merrill in the wake of the company's well-publicized troubles in the final months of 1998. Katcher was a managing director and the head junk trader at Merrill. He spent most of this year at Bear Stearns, where he was senior managing director and the senior high yield trader.

The new high-yield group initially will be based in New York, but plans are in motion to swiftly move operations to Greenwich, Conn., where the group will be neighbors with other up-and-comers in the fixed-income market, such as SBC Warburg.

RBC officials reportedly regard the new high-yield group as part of a broader expansion of RBFG's corporate and investment banking presence into the U.S. Because the bank already has expertise in such markets as telecommunications, oil and gas, the creation of a subordinate bond shop is seen as a good fit, sources said.

The Royal Bank Financial Group includes the Royal Bank of Canada, RBC Insurance and RBC Dominion Securities.