Mix, who is based in London, previously ran the Asia credit business, according to Michael DuVally, a spokesman for the New York-based firm. Meltzer was previously head of bank loan sales in New York and Shaffer was head of high-yield and distressed distribution groups in New York, said DuVally.

The changes at the fifth-biggest U.S. bank by assets come after the firm began restricting people working in the loan sales and trading business from receiving private information, such as corporate financial projections. Credit Suisse Group AG and Bank of America Corp. have taken similar steps to block private information reaching loan traders about companies that have both bank debt and sell publicly listed high-yield bonds. The move allows them to sell both types of credits.

“We have been discussing for some time the transition of the loan business from behind the wall to the public side with the rest of the leveraged finance business,” Justin Gmelich, global head of credit trading in New York, said in a telephone interview. “We thought we could serve our clients better with an integrated trading model.” Gmelich was named to this role last month.

Leveraged loans, those rated below BBB- by Standard & Poor’s and less than Baa3 at Moody’s Investors Service, are usually private and investors in this debt can have access to material non-public information that buyers of high-yield bonds can’t.

Private to Public

Goldman Sachs joins other banks that have moved their loan traders to the public side. Bank of America and RBC Capital Markets combined their loan sales forces in 2011 to make one point of contact for both new-issue and secondary sales. In limited situations, when a company just has loans, salesmen may see private information.

At RBC, under the new structure, every salesmen will market loans, high-yield and distressed debt for primary and secondary markets. Credit Suisse’s U.S. loan sales and trading group also will no longer receive private information on borrowers that have both bank debt and public securities.

Banks are moving their loan sales and trading operations to the public side as collateralized loan obligations, which usually only buy this debt, are losing their market share to other investors.

Shifting Buyer Base

Hedge funds and high-yield bond investors, who in 2007 represented only 27 percent of loan buyers, made up 40 percent of the base in the third quarter of last year, according to the Loan Syndications and Trading Association. The market share of CLOs shrank to 38 percent from 57 percent in the same time period, the New York-based trade group said.

“The decision to convert our bank loan business from private to public was largely predicated on the fact that the majority of our clients prefer access to a fully integrated leverage finance business,” Thomas Cornacchia, Goldman Sachs head of sales for fixed income, currencies and commodities in the Americas, said in a telephone interview.

There will still be a leveraged loan sales team, a high- yield sales group and a distressed credit desk, all of which make up the leveraged finance business. Some team members will cover clients that buy both loans and bonds.

In their new role Meltzer and Shaffer will oversee sales for investment-grade credits, leveraged finance, structured products, the credit products group and municipal bonds. They will both report to Cornacchia. Mix will report to Gmelich and Simon Morris, who heads credit trading inEurope and Asia.

2011 Departures

The changes at Goldman Sachs come after Courtney Mather, head of U.S. loan trading, Blake W. Mather, who ran bank loan sales, and Buckley T. Ratchford, head of global bank loan trading and distressed investing, left the firm last year.

The credit sales team will also see additional departures as Cynthia A. “Cindy” Brower and Wendy E. Sacks have also announced they are leaving. They both sold loans and distressed debt for the lender.

Goldman Sachs held $19.75 billion of loans and bridge debt as of Dec. 31, up from $18.04 billion a year earlier, according to an annual filing. The company said those credits were held “in connection with our origination, investing and market- making activities” and didn’t break out how much was held for each purpose.

To contact the reporter on this story: Kristen Haunss in New York at khaunss@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net

http://www.bloomberg.com/news/2012-04-04/goldman-sachs-names-three-to-lead-credit-sales-and-trading-units.html

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