RBC Capital Markets plans to announce Wednesday that Francisco Gonzalez has joined its municipal finance group to focus on large issues.
Gonzalez comes aboard after 19 years at Goldman, Sachs & Co., where he was a managing director in the public sector and infrastructure group. He led the firm’s coverage in that area for borrowers in Pennsylvania, Connecticut, and Puerto Rico.
At RBC, Gonzalez will be a managing director in New York responsible for covering large municipal issuers and infrastructure clients along the East Coast, in the mid-Atlantic states, and in Puerto Rico. He reports to Jim Tricolli, head of the group’s eastern region.
“Francisco, having 20 years in the industry, is a known quantity to a variety of issuers up and down the eastern seaboard,” said Chris Hamel, who leads RBC’s municipal finance efforts. “We expect that Francisco will do a really good job of deploying the considerable number of resources that RBC has with respect to balance sheet and distribution capabilities on behalf of the large issuers.”
RBC — whose parent, the Royal Bank of Canada, is one of only six global banks with a Aaa rating from Moody’s Investors Service — is currently ranked the seventh largest senior underwriter in the U.S., managing 563 issues worth $14.7 billion so far this year. That gives it a 4.3% market share by volume, according to Thomson Reuters.
Its average deal size among negotiated offerings in the first three quarters was just $26 million, easily the smallest among the top 10 underwriters.
The bank’s municipal finance team includes 340 professionals in 26 cities. Hamel said the team has been growing and making efforts to tackle larger issues since the financial crisis.
RBC recruited Dan Heimowitz to lead the large-issuer group in March 2008. He had spent 11 years as investment banker with Lehman Brothers, and prior to that was an executive vice president at Moody’s.
Under Heimowitz’s leadership, RBC has led a series of big issues this year. They include a $908 million general obligation deal for Minnesota and $774 million of variable-rate revenue bonds for Georgia’s Main Street Natural Gas Inc. — by far the largest puttable deal in 2010, according to Bloomberg LP.
Alongside Citi and Siebert Brandford Shank & Co., RBC has also been named as a joint senior manager by California for its next general obligation bond sale.
Hamel said Gonzalez joining the team is consistent with the bank’s approach of increasing the number of bankers who are able to pursue large issuers throughout the country. But, he added, that doesn’t mean the bank is changing its strategy.
“It’s not that we’re walking away from our smaller clients,” Hamel said. “All of that is a very strong foundation. But we are a New York-based platform with all of the reach of any Wall Street firm to service any kind of municipal client in the United States, including the largest.”
Hamel said pursuing large deals comes natural to the leadership at RBC because of the bank’s roots in governmental finance in Canada.
“They are used to dealing with large, substantial provincial debt offerings which are more in the $500 million to $1 billion range,” Hamel said. He added that management looks at the $2.8 trillion municipal market in the U.S. as one of the best opportunities to continue growing.
“So it’s a very exciting time to be a municipal banker at RBC,” he said. “We’re not retrenching. We’re very much on the march to grow the platform.”
