The changes that have occurred in the municipal bond industry “are leaving issuers with fewer choices for bond underwriters with significant balance sheets,” said Kenneth Gambone, TD Securities’ head of public finance. TD recently hired Andrew Nakahata, former head of UBS’ western public finance region, to lead its expansion efforts on the West Coast. TD had $2.4 billion in municipal bond underwriting in 2023, according to LSEG.
Growing TD’s underwriting business should be easier than it was for UBS, because the exit of the two large banks will likely mean underwriting pool slots will open up more quickly, Nakahata has previously said.
TD is comfortable expanding in public finance, while others have been contracting, because the firm “has a very strong risk management culture and understands the inherent risks associated with the municipal and not-for-profit sectors,” Gambone said. “The current market needs another large highly rated financial partner in municipal finance to help taxable and tax-exempt debt issuers diversify and to support effective bond underwriting and TD embraces this opportunity to expand.”
At Piper Sandler, the firm recently hired Ryan Hallam, who spent nearly three decades at Citi, as a managing director and co-head of high-yield trading on Piper Sandler’s fixed-income team. “We look forward to the positive impact Ryan will bring to the fixed income group,” said Kyle Javes, head of underwriting and specialty finance at Piper Sandler, in a statement. “His expertise and deep product knowledge will strengthen our municipal team as we continue to build and expand our coverage across municipals.”
Piper Sandler joins other firms in bringing on former employees from Citi: Jefferies hired around 10 health care bankers before Citi’s exit. Following the closure of Citi’s muni division, former employees have been hired by BofA Securities, RBC Capital Markets, Morgan Stanley, J.P. Morgan, Raymond James, Barclays, 16Rock Asset Management, Truist Financial Corp., Ramirez & Co., Loop Capital Markets and Huntington National Bank, which hired Citi’s entire Midwest public finance banking group, with Samantha Costanzo being named head of public finance.
Costanzo and her team offer Huntington a chance to expand more deeply into public finance and to do what it already does with a greater degree of sophistication, said Matt Milcetich, executive managing director of Huntington Capital Markets.
Read on for more on how UBS and Citi’s munis exodus is impacting the industry.
