LOS ANGELES — Mitsubishi UFJ Securities has parted ways with its West Coast municipal finance team focused on long-term deals, according to a company spokeswoman.
Marc Hughes, executive director and head of municipal investment banking in the San Francisco office, Brant Smith, who ran municipal underwriting in San Francisco, and the rest of the team were laid off after they completed the $20 million refunding of Rowland Water District water revenue bonds in September, according to Hughes, who started work last week at Mesirow Financial.
The bonds for the district, which serves five eastern Los Angeles County cities including Rowland Heights and Puente, priced on Sept. 4 and closed on Sept. 18.
According to Hughes, the team was told that the company planned to focus on work involving shorter-term municipal debt like commercial paper, notes and remarketing on longer-term deals.
But a company spokeswoman for Mitsubishi UFJ Securities, who would not provide her name, said the company has no plans to move away from underwriting long-term municipal debt.
"The only reason we did that is we are looking to move the business from the West Coast to New York," she said.
She wouldn't offer any additional details as to why the company made the decision or why it laid off its West Coast team.
The moves come as another arm of Mitsubishi UFJ Financial Group, a Japanese bank and financial services company, is growing its municipal market presence in the U.S.
MUFG Union Bank, a commercial banking operating company under the MUFG umbrella, has ramped up its presence in public finance under Kevin Dunphy, the bank's head of public finance, U.S. corporate banking.
It hired Jay Goldstone in October 2013 as a managing director. Goldstone, San Diego's former chief financial officer and chief operations officer, served a one-year term as Municipal Securities Rulemaking Board chairman in 2013.
A different spokeswoman confirmed that efforts to grow public finance under MUFG Union Bank continue.
The MUFG Union Bank brand name grew out of MUFG's decision in July to integrate its operations in the Americas into a single commercial bank and holding company. The move combined Bank of Tokyo-Mitsubishi UFJ's United States branch with Union Bank NA.
Bank officials have said previously that MUFG Union Bank's focus as a commercial bank was not on underwriting, but on direct lending, revolving lines of credit, and variable rate debt.
Mitsubishi UFJ Securities had entered the U.S. municipal bond market in May 2011 by hiring six public finance professionals with the goal of concentrating on issuing and trading municipal debt in western states.
Hughes now moves to Mesirow as a managing director in the San Francisco office of its public finance department where he will concentrate on California municipalities.
Chicago-based Mesirow had a municipal trading desk in San Francisco, but no banker in that office before hiring Hughes.
"California is a very important market for us. We have a significant trading and sales office in San Francisco," David Johnson, senior managing director of Mesirow Financial's Public Finance group, said in a statement. "Marc will add an important banking component to better serve this market."
The public finance veteran of 25 years has specialized in revenue-backed financings as well as lease-backed, land secured and general obligation bond financings.
At Mitsubishi UFJ, Hughes worked as lead banker on 44 senior, sole, co-manager and syndicate-member negotiated transactions for a variety of issuers across the country. Prior to that, he was the debt manager for the San Francisco Public Utilities Commission where he oversaw the issuance of water and wastewater revenue bonds and commercial paper. He has held senior banking positions at Jefferies & Co., RBC, Prudential Securities and Siebert Brandford Shank & Co.
Part of the attraction of Mesirow, Hughes said, is the heavy hitters in public finance at the company. Hughes said he has known Andy Bynam, who heads the Houston office, for many years. Peter Bianchini, who also works in senior management for Mesirow, is well known in California public finance, Hughes said.
