In a dramatic development in the European ABS market, Credit Suisse First Boston recently moved in to snap up BNP Paribas' securitization team. Among the movers were Paribas' global head of securitization, Maartin Stegwee, and Adrian Carr, who had been in charge of its syndicate desk.

Although Paribas said that it intends to "maintain our leadership in European securitization", the defection of so many of its ABS team must have come as bitter blow and raises doubts - in the short term at least - whether it can still be such a dominant player. Last year, only Deutsche Bank arranged more European deals in terms of volume.

It seems certain that Paribas will move quickly to replace its securitization team, possibly in the same way that CSFB operated. An official at the bank hinted at such, although he was quick to stress that it was not panic stations just yet. "I think you can work out what we're doing to recruit new people," he said. "Nonetheless, our origination team is still in place and we still have a strong sales team. This should not affect the deals we're working on."

Other players in the market, however, believe that the French bank faces a very uncertain future. "If you lose some of your best originators and your whole syndicate desk, that's pretty much you're whole European structured finance team," said a leading ABS research specialist in London. "Paribas are going to have to act swiftly and pay handsomely to rebuild the team and recreate momentum."

Doubts were also raised as to whether some of the high profile deals that Paribas has been mandated for would remain unaffected. "It is a pretty dire situation, I would have thought," the analyst said. "How can something like the Telecom Italia deal or the Greek social security deal not be affected when the people working on the transaction have left the company? This is bound to have an effect on a bank's ability to do business."

One ironic feature of CSFB's move for such an established team of structured finance professionals, is that as recently as March, it lost over 20 ABS employees in its U.S. team to Deutsche.

While this latest development may not fully erase that disappointment, it should go a long way towards improving its position in Europe, where it is not yet considered to be one of the major players.

CSFB's head of structuring for the European fixed income division Scott Ulm is confident that the expertise of its new employees will put it in a strong position in the European ABS market. "We've brought in an exceptionally talented group of people with experience in a variety of places and of asset types," he said. "We want to be a significant player over a variety of asset classes and this should help us achieve our targets quicker."

The defection of Paribas' staff to CSFB was not the only recent move among securitization staff. Merrill Lynch prized away seven members of Deutsche's European structured finance team, including Michael Donahue. Merrill is currently undertaking an aggressive recruitment campaign to improve its own market standing.

Whispers in the market would suggest that there could be more transfer activity to follow. Aside from speculation about how Paribas will respond to its recent setback, Greenwich NatWest, the investment banking arm of NatWest Bank, and Royal Bank of Scotland are in the process of evaluating their securitization teams as a result of their recent merger.

Aggressive recruitment plans at Lehman Brothers' London office may also make for more musical chairs, after an announcement last year that the bank is looking to recruit up to 10 pros in an attempt to build a team that will go some way to replicating its dominance in the U.S. securitization market

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