Magazine article American Banker

Salomon, Travelers Combo Could Create Lending Player

Magazine article American Banker

Salomon, Travelers Combo Could Create Lending Player

Article excerpt

The $9 billion acquisition of Salomon Brothers Inc. by Travelers Group would create a securities titan, but the outlook for the lending strength of the merged institution is less clear, lenders say.

Both Salomon and Travelers' Smith Barney Holdings Inc. are relative newcomers to the syndicated loan market, and neither has established itself as a major player in the highly competitive field.

But several syndicated lenders say the deal would create a significant player in the leveraged loan market. Smith Barney's three-member loan group is known for its origination strength, while Salomon's larger loan shop has considerable sales and distribution muscle.

"This could be a really good fit," said one loan market observer. "It seems like a pretty good combination if you can manage to keep them all on the same team."

"There's going to be a boatload of volume, so I think it bodes well for everyone," said another market participant.

Following the lead of investment banks such as Goldman Sachs & Co., Credit Suisse First Boston, Merrill Lynch & Co., and Lehman Brothers Inc., Salomon started its loan group in July 1996. Like many of the new investment bank entrants, Salomon focused its efforts on noninvestment grade credits used in conjunction with its high-yield bond business.

The firm hired Richard Ivers, who was the managing director of leveraged finance at CS First Boston, in July 1996 to head its new loan group. Subsequent high-profile lending hires that fall included Mavis Taintor, a highly regarded leveraged lending specialist, and Nazan Clohesy, a veteran syndication sales star, both from Chase Manhattan Corp. …

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