S&T Tiers: Credit / Spread Products

Based on the most helpful WSO content, here's a quick breakdown of some insights into credit/spread product trading franchises across banks in the US:

1. Investment Grade (IG) & High Yield (HY):

   • Top Players: Banks like JPMorgan, Bank of America (BofA), and Citi are often highlighted for their strong IG and HY credit trading desks. BofA, in particular, is noted for its big balance sheet and dominance in mortgages, which ties into their structured credit expertise.
   • Deutsche Bank (DB): Known for a solid IG and HY credit shop, with a strong rates desk complementing their credit trading capabilities.

2. Distressed Credit:

   • Distressed credit trading is more niche and often overlaps with hedge funds or special situations platforms. While banks like Goldman Sachs and Morgan Stanley have historically been strong in this area, the space is increasingly dominated by specialized funds rather than traditional bank trading desks.

3. Municipals (Munis):

   • Munis are a more specialized product area. BofA and Citi are often mentioned as leaders in this space due to their extensive underwriting and trading capabilities.

4. Mortgages:

   • BofA: Reputed as the best mortgage business on the street, with a legacy from Merrill Lynch's structured credit dominance.
   • Wells Fargo: Historically strong in mortgages, though their broader S&T reputation has seen fluctuations.

5. Securitized Products:

   • Structured credit (including ABS, CMBS, RMBS) is a standout area for banks like JPMorgan, BofA, and Citi. Deutsche Bank also has a strong reputation in structured credit, particularly in Europe but with notable US operations.

6. General Observations:

   • Goldman Sachs and Morgan Stanley: Known for their trading prowess across multiple asset classes, including credit, though they may not dominate every niche.
   • Barclays and Credit Suisse: Have had strong credit trading desks historically, though recent restructuring and market dynamics may have impacted their standings.

If you're looking for a more granular breakdown or specific rankings, it might depend on the exact product focus and the current market environment. For deeper insights, you can explore threads like "Best Banks for Sales and Trading?" on WSO.

Sources: What are the different types of Credit?, Best Banks for Sales and Trading?, Credit - Pod Shop/MM vs. Distressed/Special Sits HF, Credit Hedge Fund opportunities, Private Credit / Direct Lending Comp