10 years after its founding, bond business is thriving at U.S. Bank

November 18, 2019

Built on ethics and service, the Credit Fixed Income team has grown into an industry leader.

In the Charlotte office of U.S. Bank Vice Chairman and Corporate & Commercial Banking Co-Head Jim Kelligrew, an eye-catching chart details the meteoric rise of a business he helped launch a decade ago – and serves as a reminder of the mindset that has made the team a standout in the industry. 

“Before there was Credit Fixed Income at U.S. Bank,” Kelligrew says, indicating the years not shown on the chart, “there was an idea that we could provide corporate and commercial clients with more ways to access capital so they could realize their goals. At the time, we were growing our lending relationships with clients, and they wanted financing products beyond just loans. When we entered the corporate bond business to meet that need, clients reacted very quickly and positively.”

Doug Fink is the managing director and co-head of Credit Fixed Income (CFI) & Municipal Finance at U.S. Bank. “With our help,” he says, “clients have been able to invest in sustainable initiatives, fund strategic acquisitions, expand their stores, build homes, and raise bond financing for infrastructure projects that help communities grow. It all comes down to communication. We work with companies to understand their financing requirements and show them how to take advantage of different options, minimize interest-rate risk, and achieve financial stability.”

Kelligrew nods. “Ten years ago, we didn’t know yet how important this would be for our clients. Just a few months after we launched the bond business, we led our first deal, which was a $300 million transaction for another financial-services company. Earning that partnership in such a short time was a huge accomplishment, and we’ve never looked back. I’m so proud of the value the CFI team brought – and continues to bring – to our corporate and commercial clients.”

Pushing forward as others pull back

In 2009, companies were struggling with an economy still in crisis. But instead of pulling back, as others in the banking industry were doing, U.S. Bank was moving forward. Company leadership saw the potential of the business and gave Kelligrew the resources to create something from the ground up. He hired experienced industry leaders who were drawn to the strength and stability of U.S. Bank and the challenge of building something new. The result was a team with decades of know-how and a unique drive to succeed.

Kelligrew says early choices were important. “From the beginning, we made client service and ‘doing the right thing’ central to who we are and how we work – just like the rest of U.S. Bank. We felt that putting the customer first and managing risk prudently were critical to a sustainable business model coming out of the crisis. That was the right decision. Businesses trust us to help them succeed, and we work to be worthy of that confidence every day. We’re constantly focused on delivering value-added ideas – not just pushing the ‘product du jour.’”

How they grew

Collaboration helped the team grow quickly. They partnered with their colleagues from across U.S. Bank to identify clients who might be a good fit for bonds and could benefit from the unique market intelligence coming from CFI’s bond sales and trading desk.  

Jimmy Whang co-heads the CFI business with Fink. “One of the most important things we do is build relationships. We often work with other teams at the bank to connect clients with products and services they need but may not know are available to them. We can maximize their capital and minimize risk, delivering stability that gives them a foundation for long-term success.”

The team today – and tomorrow

The corporate bond team serves hundreds of clients and has been the fastest-growing business of its kind since the end of the recession. Its impact helped U.S. Bank invest further in derivatives, foreign exchange, loan capital markets, and other services. Today, the combined group – Fixed Income & Capital Markets (FICM) – is an example for the rest of the industry. In just the first half of this year, Derivatives and Credit Fixed Income achieved record revenue. The Capital Markets business ranks in the top five by number of high-grade loans. And as part of the Corporate & Commercial Banking division, FICM has relationships with 87% of Fortune 1000 companies. 79% of those clients have three or more services and products with the group.  

Stephen Philipson, head of FICM, says there are reasons for the group’s success beyond financial opportunities. “There are over 250 people in our division, including many who transitioned from other leading institutions. They believe in our business model. When clients reach out to us, they know their key contact is going to be a senior banker; someone they can depend on to provide the best product-agnostic advice, regardless of their industry or the environment, in collaboration with their banking and other FICM product partners.

“That approach has a multiplier effect. Your experts make the products and services better, which in turn attracts even more clients and employees. And those new employees have the opportunity to learn from the best and carry forward that legacy of excellence.”

“What’s really important to know,” Fink adds, “is that CFI is positioned so favorably versus our banking competitors because everything we do begins with the client. Everything.”

Philipson sums it up this way: “The guiding principles Jim established have enabled us to build a business unmatched in the industry. We continue to move forward, always looking for ways we can add value to the bank and to the clients we serve.”

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