JP Morgan CLO heads agree to join SMBC Nikko

Charlie Dinning
+Tanvi Gupta

16 October 2024•3 min read

The three JP Morgan CLO leaders that 9fin reported had departed the bank are set to join SMBC Nikko, according to 9fin sources. Christine Ferris, Anusha Joly and Mussie Tizazu resigned from JP Morgan this week and are joining SMBC Nikko in a move that somewhat resembles when Scotiabank lifted the Natixis CLO arranging team.

There is a slight difference in that Scotiabank was setting up a brand new CLO arranging desk and hired a proven CLO team from Natixis. SMBC Nikko does already have a CLO arranging desk, led by Harry Huang. But securing talent from JP Morgan suggests big plans are afoot to grow this operation.

SMBC Nikko is hiring Christine Ferris as head of securitized products, according to sources. This has parallels to the Scotiabank move into CLOs when the bank appointed David Williams and Brad Roberts as co-heads of US structured credit.

SMBC Nikko has done one US BSL CLO reset this year for American Money Management Company in April, when it was the sole arranger. It was also a co-placement agent on the refinancing of RR 12 (a Redding Ridge deal) when Atlas SP was lead arranger.

The switch from JP Morgan to SMBC Nikko will present new opportunities and challenges for the CLO team. The scale of the platform at JP Morgan brings with it brand recognition, which will have to be developed at SMBC Nikko. The US bank is also one of the largest US loan issuers and one CLO portfolio manager told 9fin that JP Morgan’s loan franchise in itself is enough for it to win CLO mandates.

As of the end of September, SMBC Nikko was credited with arranging just $347.1m of US CLOs , according to 9fin data. SMBC Nikko ranks 24th out of 27 banks that have been active in the US BSL CLO market this year and is the lowest-ranked arranger that has been lead on at least one US CLO this year. The only arrangers below are — Academy Securities, Kopentech and Loop Capital which have only been co-placement agents, or accredited via an AMR refinancing.

In the middle-market league tables SMBC Nikko sits on $1.06bn of middle-market CLO issuance, according to 9fin data. It has been sole arranger on one reset and one new issue this year for Apogem Capital and Blue Owl, respectively. SMBC Nikko was also the lead arranger on another reset for Antares Capital.

SMBC Nikko ranks 12th out of 24 in overall issuance in the middle-market CLO arranger league tables. In the combined US BSL CLO and middle-market league tables, SMBC is 22nd out of 32 arrangers.

In comparison, JP Morgan is on for a clean sweep in the US BSL CLO league tables in overall and new issuance. The bank arranged $41.2bn of US CLOs this year, $18.5bn of which is new issuance, as of the end of September. JP Morgan leads Bank of America in overall issuance by over $3bn and in new issuance by $4bn.

JP Morgan has also arranged two middle-market new issues this year for $828.2m of issuance in the league tables. Combined between the BSL and middle-market spaces, JP Morgan has arranged $42bn of CLOs, good enough for first place, and over $40bn more than SMBC Nikko.

SMBC Nikko declined to comment.

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