CHICAGO — The two-banker public finance team that covered the Michigan market for Mesirow Financial Inc. has joined Chicago-based Hutchinson Shockey Erley & Co. after Mesirow’s closure of its Michigan office a few months ago.
Mike Gormely and Bill Roche will stay in Michigan, working as senior vice presidents for Hutchinson out of new offices in St. Clair Shores, outside Detroit.
Joining them is James Wencel, a retired school superintendent who is starting at the firm as a part-time banker, and Catherine Huskin, their administrative assistant at Mesirow.
Roche and Gormely came to Mesirow in November 2009 from Raymond James & Associates Inc. They joined Hutchinson earlier this month after Mesirow told them the firm was closing the Michigan office, Gormely said.
Leadership has changed at Chicago’s Mesirow since the death earlier this year of longtime chief executive officer James Tyree. Public finance banking manager Lawrence Morris, who hired Roche and Gormely, retired several months ago. Richard Price is the new CEO. Tyree and Price both wanted to expand the firm’s municipal reach and target larger, state-based deals, according to sources. Mesirow declined to comment for this story.
Gormely and Roche have worked together in the Michigan muni market since 1988. Gormely said the two will continue to focus on middle-market government and school transactions, serving mostly as senior bankers and occasionally as financial advisors. Gormely’s speciality is general obligation financings for local governments, while Roche covers K-12 school borrowers and other markets.
Like the state itself, Michigan’s local governments continue to suffer from revenue declines and budget constraints.They have scaled back their borrowing except for refinancings or smaller deals to finance revenue projects like water and sewer improvements, Gormely said.
With muni interest rates at historic lows, he said refinancing bonds that are now approaching their call dates is popular.
“Bonds that all have call dates coming up in 2010, ’11, ’12, and ’13 that can be refinanced — that’s what the Michigan investment banking industry is focusing on,” he said. If issuers can beat the negative arbitrage linked to advance refundings, refundings are a “no-brainer,” he said.
Most governments are holding back on new money and borrowing only for necessary projects, according to Gormely.
“Now more than ever it’s showing through that the professionals that are running these municipalities are really making tough decisions, and if they need to issue debt they are asking, 'What’s the revenue stream?’ ” he said.