With the closing of the JPMorgan Chase/Bank One Corp. merger expected this week, the market is bidding a fond farewell to the final remaining Midwest investment bank's presence. Lead mandates have trickled down - Banc One Capital Markets and JPMorgan Securities jointly led last week's Prestige Auto Corp. series 2004-1 deal, perhaps the final ABS with the BOCM stamp. The bank has liquidated its trading inventory and research dried up several weeks ago. It's understood that many BOCM ABS professionals were unwilling to move to JPMorgan's New York-based offices and are now fielding new job offers.
Over the years, BOCM had evolved into a lower top-10 ABS underwriter, and, fueled by Bank One's massive credit card operations, a leading issuer. BOCM sold its first and only auto loan ABS, Bank One Auto Securitization Trust last October.
While never a top-five presence in ABS underwriting, BOCM had visibility as an underwriter, ascending to the No. 2 manager of CCABS last year. Additionally, it was the sixth-leading auto-loan ABS underwriter and the third-leading dealer floorplan ABS underwriter.
In recent weeks JPMorgan has taken the lead role in the new entity. For example, JPMorgan Securities ran the books on the most recent credit card ABS from Bank One's BOIT shelf. BOCM did, however, hold sole bookrunning responsibilities for the Premium Financing Specialists' PFS Financing 2004-A deal that priced June 9.
As had been expected in the wake of the transaction's announcement, most of BOCM's ABS pros are not joining the post-merger entity, citing a disinterest in relocating to New York, and turned down offers to join the new firm and have been saying so since the January announcement.
Since the Jan 14 merger announcement, most foresaw a JPMorgan-dominated securitization group. Given the overlap seen in the firm's respective securitization groups, most expected the JPMorgan team to dominate the eventual entity.
In the wake of those mid-March internal announcements, the BOCM banking team knew their eventual fate and began looking for places to land on their feet. The fact that some in the BOCM banking team had left JPMorgan just months prior to 1999 with then Chase Manhattan, likely did not help the cause.
Aside from Banc One's Christine Cole, who will co-head the securitization group along with JPMorgan's Scott Davidson, the banking team will consist almost entirely of JPMorgan Chase legacy employees. Even the recent vacancy created by the departure of JPMorgan auto banker Brad Dansker was filled by JPMorgan legacy John Cho, who will remain as the lead auto banker post merger.
JPMorgan's Andrew Dym will head the U.S. ABS effort, with Banc One's Kirk Farney and JPMorgan's Brad Schwartz jointly heading ABCP operations. Schwartz has informed colleagues of his intention to step down at year-end.
Former BOCM origination chief David Duzyk has resurfaced at RBS Greenwich Capital, where he is working to build the non-mortgage origination group. While he is personally restricted from recruiting former Banc One bankers to his new firm, many, including managing directors Dan McGarvey and Jeff Orr, are expected to join RBS Greenwich before the summer is over. Home equity banker John Heegar will move to JPMorgan's investment banking group, where he'll work with JPM's lender clients.
Though ABS researchers Alex Roever and Glenn Schultz did find homes at JPMorgan, the bulk of the research team has already dispersed. While Roever will now focus on short-term relative value, Schultz will continue managing the loan level database he developed at Banc One.
Unlike the JPMorgan/Chase merger, departures have thus far been few. The orderly state of affairs as the deal closing approached has been attributed to the compensation package offered to employees that were not being retained by JPMorgan.
For employees with the firm at least eight years, the package includes four weeks of severance pay per year of service with the bank plus a pro-rated bonus based on 2003's number, sources said.
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