Bond pipeline could overflow into staff shortages

A strong corporate bond pipeline could find banks short of mid-ranking execution staff, according to one search consultant.

"A couple of banks have moved mid-ranking people out of corporate DCM this year," says James Richardson, debt capital markets consultant at search firm Odgers Ray & Berndtson. "The feeling has been that they could get more out of them in other areas like high yield, or leveraged finance."

However Richardson says a rush of corporate bond issuance may yet lead banks to regret their move. According to an article in the International Financing Review, September may yet prove the busiest month of the year for European corporate bond issuance, with volumes exceeding the €17bn record set in May.

The publication says European corporates are being spurred into action by the threat of imminent rate hikes and the need to fund M&A transactions.

If the crunch point comes, Richardson says it will happen early next year. "Most banks are happy with the number of people they have in place to cope with the current pipeline. The problem will be if current issuance levels persist into, or increase in, 2007."