U.S. Bank Starts Private Placement Team, Looks to Expand

July 27, 2009

U.S. Bank has officially thrown its hat into the private placement ring. The bank started its first in-house private placement team this summer by hiring Terry Martin and Jerry Kokal, two former members of JPMorgan Securities’ private placement team, and will likely hire one more member at the V.P. level by the end of the year, said Martin, senior V.P. and Head of Private Placements with U.S. Bank.

Martin joined the bank in late June after 14 years with JPMorgan in New York, and Kokal joined in mid-July after five years with JPMorgan in Chicago. Together the two have a combined 38 years of experience in the private placement market, covering some 350 transactions while at JPMorgan and other institutions. Now with U.S. Bank, Martin will continue to be based in New York, and Kokal, a senior V.P., will continue to be based in Chicago, with the potential new group member to be based wherever needed.

Until now, U.S. Bank’s efforts in the private placement arena have been limited to joint ventures, and the bank has never had its own proprietary private placement team. However, Martin said the bank’s healthy balance sheet and its existing relationships with domestic mid-corporate sized companies on the bank side make it ideally positioned to expand into debt private placements. The ability to offer a new product, he said, will help strengthen the bank side of the business, and the existing bank relationships will help grow the private placement side.

In addition, he said the market downturn over the past two years has created opportunities in the private placement market.

“On a relative value basis, private placements have held up very well compared to other asset classes,” he said. That means that as the markets rebound over the coming years, private placements are likely to get more attention from the buyside. “There are some good things on the horizon; spreads are coming down, many of the big investors are coming back, and there will likely be a lot more refinancing activity as bank facilities burn off in the next year or so,” he said.--GC

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