The CDO research effort at Merrill Lynch was recently transferred into the structured product group following the resignation of Brian McManus, who had been with the bank for four years. Dan Castro, head of structured product research, will now focus primarily on the CDO sector. There were no reported plans for McManus, who did not leave to take a position elsewhere, it was added.
CDO research had previously been grouped with the high-yield strategy team, due to the underlying speculative-grade corporate unsecured collateral that used to dominate the sector. With the shift away from junk bonds and the growth of structured-product collateral in CDOs, the structured finance research team had been taking an increasing role in CDO strategy.