Royal Bank of Scotland, the biggest bank in the European leveraged finance market, is expanding its business in the U.S. and is sending its global leveraged finance head Euan Hamilton to oversee the growth.
The move marks a big shift for RBS, which was voted the top European leveraged finance bank of the past 10 years in a poll conducted by Financial News in June. The bank has yet to replicate its leveraged finance success in the U.S.
RBS has been involved in some of Europe's most eye-catching deals this year, including the private equity buyout of Danish telecoms company TDC. But it has missed out on U.S. transactions, such as the $16bn leveraged buyout of healthcare company HCA. The bank has held a top three position in leveraged loans, mezzanine finance and leveraged finance revenues in Europe since 2004, according to data provider Dealogic.
That contrasts with the U.S. market where the Scottish bank lies in 11th place for leveraged loans this year, 18th for leveraged finance revenues, 17th in high yield bonds and ninth in mezzanine finance.
Sources close to the bank said RBS wants to replicate its European strategy in the U.S. A former RBS leveraged loans banker said: "Unlike some of the bulge bracket players, the bank has grown in step with its clients, partnering quality players, regardless of their size. In the U.S. they'll be debt financing led and try and grow slowly and steadily rather than throwing money at the business."
RBS has expanded its U.S. business in recent years but was hit this year by the departure of John Walsh and Ben Cohen, who had built up the U.S. operations. Walsh, who was head of North American corporate capital markets, and Cohen, his deputy, left to start a hedge fund.