Mitsubishi UFJ Growing Private Placement Presence
Now that the credit markets have tightened, professionals expect a pickup in private placement activity.
July 1, 2008
Mitsubishi UFJ Securities (USA) Inc. said Tuesday that it hired Conrad Owen to run its new Private Capital Markets group, a move that is designed to expand into an area of finance that is expected to see heightened activity amid tightening credit market conditions.
Owen, 47, will be based in the New York and he will report to Paul Morganti in London who runs the international debt capital markets business for Mitsubishi UFJ Securities. Owen was previously with Nomura Securities International Inc. where he was head of Debt Capital Markets, Americas, and ran its private placement group for the last four years.
While private placements of debt and equity have long been a mainstay of Wall Street, borrowers in recent years were able to take advantage of easy credit conditions and rely on other sources of capital. Now that the credit markets have tightened, professionals expect a pickup in private placement activity. At Mitsubishi UFJ much of the focus, initially, will be on private placements of debt for issuers including hybrid and subordinated structures.
"In the days of easy liquidity, most borrowers did not have to look far to fund themselves. The model of investor diversification, in many instances, became secondary to cost minimization," says Morganti. Now, though, “we have a situation with very tight liquidity and borrowers are searching for new and diverse sources of funding."
Morganti says Owen and the new private capital markets group will be based in New York, but the effort will very much be a global one. Mitsubishi UFJ Financial Group, one of the world's largest financial institutions with a nearly $2 trillion balance sheet, will be able to rely on its existing customer base for new transactions. "As a global banking organization we have a huge network for origination of transactions", according to Morganti.
Issuers in European or Asian markets likely will look to raise money through a private debt sale and these offerings likely will be sold to institutional investors in the US, predominantly insurance companies, endowments and pension funds.
Meanwhile, Morganti said his firm is looking for other professionals to build its presence in the capital markets. "We are seeking opportunities to identify and recruit talented professionals," he says.
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