By Katy Burne
BNP Paribas SA has cut a group of junk-bond salesmen in the
U.S., including team head Kevin Cook, according to people familiar
with the matter.
The cuts were made Thursday, the people said, the same day the
French bank shook up its investment-banking division and a created
a new global-markets team.
Eight individuals were let go, one of the people said, adding
that the bank will continue to sell and trade the securities.
High-yield or "junk" bonds are issued by borrowers rated below
investment grade. The departures were first reported by Bloomberg
LP.
The shifts at BNP underscore how some banks are de-emphasizing
some businesses in response to new capital and trading rules, in
many cases reallocating resources elsewhere.
The French bank wasn't among the biggest players in the in North
American junk-bond market.
"For a hot market it's surprising," said Kevin McPartland, head
of market-structure research at Greenwich Associates.
High-yield bond funds have attracted a wave of cash in recent
years, as investors searched for income-producing securities in
today's low-interest-rate environment. But some analysts have
pointed to recent gyrations in prices and the expectation of higher
interest rates ahead, saying sentiment could quickly change.
The average price of U.S. high-yield corporate bonds has fallen
to 101.03 cents as of Nov. 19 from 104.43 cents as of late August,
according to an index run by Bank of America Merrill Lynch.
In the week ended Nov. 19, investors withdrew $281 million from
U.S. high-yield bond funds, according to fund tracker Lipper, their
first outflow since mid-October. Loan funds in the latest week saw
$374 million of outflows.
BNP added Mr. Cook to its U.S. high-yield team in November 2012.
He came from the high-yield sales desk at Citadel Securities. The
bank also added Citadel's Jack Gill and Chris Savinelli as managing
director and director, respectively, reporting to Mr. Cook.
Write to Katy Burne at katy.burne@wsj.com
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