A key member of Massachusetts’ Treasury Department last week left his post to join the growing health care finance department at Lehman Brothers. Patrick Landers, who has served as the commonwealth’s assistant treasurer for debt management since 1999, will begin today as senior vice president in the investment banking health care finance department at Lehman.“It was a great opportunity,” Landers said. “Lehman is expanding their health care presence, particularly in New England, and health care is a very interesting segment. They’re able to look at both sides of their balance sheet and I find it very interesting.”During his eight years in the Treasury Department, first with Treasurer Shannon O’Brien and then current Treasurer Timothy Cahill, Landers said the state has stood out in the market not just for its sizable issues, but for accessing the market at the right time. He pointed out that Massachusetts was the first state issuer to offer general obligation notes based on a percentage of the London Interbank Offered Rate, a transaction that priced in May, and that the state has been able to price refundings at the right time.“I think very few issuers are as nimble as the Commonwealth of Massachusetts for a number of advance refundings that we were able to identify and get to and execute,” Landers said. “There were a few that were particular market opportunities that were just there for a brief time and I know from looking at empiricals that we were one of, if not the only, issuer in the country to get into those markets quickly. And days later the opportunity was gone.”The bond market has experienced some changes since Landers began structuring Massachusetts debt. Deals are bigger, swaps are now a part of the market, and the increase of arbitrage accounts has kept issuers on their toes on pricing day.“We have had numerous occasions when that relationship between the swap curve and the [Municipal Market Data] curve — it’s like someone flips a switch and you get dramatic increase in your orders, so that’s helped many deals,” Landers said. “The reverse side of that is sometimes you get arbitrage accounts selling back into the market at the same time you’re trying to do a primary issuance and then you’ve got this other data point out there that you have to contend with.”Another change in the market is the emergence of tender-option bond programs that compete with an issuer’s natural variable-rate debt but also create more demand for fixed-rate bonds in the market.“These arbitrage accounts that are buying your fixed rate and then derivatizing it and then selling it back as variable rate are often times competing with your natural variable rate,” Landers said.Landers will be missed at the state level and his experience will be hard to replace, according to officials.“Pat has been an asset to both my administration and the commonwealth,” said Cahill in a prepared statement. “We wish him well in his new position.”

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