Deutsche Bank Securities, which aspires to build up a top-flight mortgage-backed securities shop, has come up with an unusual way of accomplishing that onerous task: It is bucking market tradition by aligning its fledgling MBS trading operation with its existing derivatives group.

The bank has just hired Nicholas "Trip" Mestanas, a longtime Goldman Sachs mortgage-backed pro, to build up an agency MBS trading platform. Bankers are intrigued that Mestanas and his staff, rather than reporting to Deutsche's structured finance heads, will instead report to Jon Kinol, a managing director in charge of various types of derivatives, including interest-rate and mortgage-related derivatives. One of the reasons Mestanas left Goldman was his interest in the MBS/derivatives combination, sources familiar with the situation said.

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