Merrill Confirms Mortgage-Related Hires

Confirming an earlier series of reports suggesting that Merrill Lynch & Co. (MER) had poached two key mortgage executives from rival firms, the Wall Street giant said Tuesday morning in a formal press announcement that Michael Nierenberg from JP Morgan Chase & Co. (JPM) will be joining the firm to head global mortgages and securitized products businesses, and that James De Mare from Citigroup, Inc. (C) will also be joining to run the company’s mortgage trading operations. Nierenberg will report directly to Thomas K. Montag, head of global sales and trading, while De Mare will report to Nierenberg. HW had covered Merrill’s alleged hiring of both in an earlier story; at the time, Merrill officials had no comment on the hires. Sources tell HW that Merrill is eying the RMBS and related securities markets on three distinct fronts: disposing of the distressed assets already on its balance sheet, trading in the expanding agency securities space, and possibly looking to trade in distressed RMBS/CDO/etc. paper once that high-yield market begins to move. Our sources suggest that Street expectations for trading in that “junk bond” space is likely to pick up in the middle of next year. Nierenberg was most recently JP Morgan’s head of global securitized products, a position he held after moving to that firm following its purchase of Bear Stearns earlier this year; JP Morgan has had a “bear” of a time holding onto the mortgage expertise of its quarry (pun intended). Nierenberg joined Bear Stearns in 1994, moving quickly through the ranks to hold positions such as head of interest rate and foreign exchange trading operations, co-head of structured products and co-head of mortgage-backed securities trading. De Mare was with Citigroup for 11 years, having most recently served as the global head of mortgage trading, which included the trading of all securitized products in Citigroup’s fixed income currencies and commodities group. Prior to joining Citigroup, he ran the adjustable rate trading business at Salomon Brothers. For more information, visit http://www.ml.com. Disclosure: The author held no positions in MER, JPM or C when this story was published; indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.