The great convertibles reversal

Last year, when the issuance, value and sale of convertible bonds was falling through the floor, banks hit the panic button and cut as much as 80% of their trading teams. Now, with 2009 decidedly rosier, they are looking to add to their ranks once again.

In the second half of 2008, global issuance of convertible bonds fell to $131.3bn, according to data from Dealogic - almost half that of 2007. Sales over the same period were also relatively diminutive, at $4.4bn in Europe, according to figures from Bloomberg. This has risen to $13.5bn in the first half of the year.

"The main point is that the market is open, it's active, and can be accessed by companies big and small, and with high and low credit ratings," said Luke Olsen, head of European and Asian convertible bond research at Barclays Capital.

With this improved sentiment comes an increasing willingness to hire. Financial News reports that Bank of America Merrill Lynch and Deutsche Bank have recently added to their teams. Both Citi and Credit Suisse (which cut back its trading team) are also said to be recruiting.

"A lot of the banks have found they don't have enough people to deal with the uptick in volumes," says Chris Whittington of headhunter Sainty Hird's equity derivatives desk. "Banks are back in the market for convertibles professionals, but it's more so on the sales than the trading side at the moment."

Similarly, Matthew Williams who looks after equity derivatives at executive search firm Sheffield Haworth, says hiring has "definitely come back this year" after a lot of firms over-cut staff.

It seems there's money to be had. The Times quoted one senior banker as saying someone has been "given a 3m one-year guarantee to run the convertible desk of one bank".

Sadly, this is not the norm. As hiring is currently relatively sporadic, and some banks are more desperate than others to take people on, headhunters tell us that packages as low as 150k, but as high as 400k, are being offered.