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Credit Suisse to Trade Physical Gas Out of Houston

December 21, 2009
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Credit Suisse last Thursday announced the creation of a physical natural gas trading team in Houston, noting that it is the latest addition to more than 30 marketers and traders the firm has hired over the last six months.

The company said Lon Tiemann joined its ranks as a managing director and head of physical gas trading; David Todd joined as vice president and senior physical gas trader; and Matthew Almy and Ossie Okeke joined as vice presidents charged with deal execution. They are coming to Credit Suisse from Merrill Lynch, the firm said.

"These appointments reflect our continuing ability to attract top talent to further our growth in market share across our commodities franchise," said Adam Knight, head of global commodities at Credit Suisse' investment banking division. "This is a strong first step towards building a leading physical gas business. The team previously contributed to building and managing one of the largest physical gas portfolios in North America. Their expertise in identifying physical gas opportunities and executing them will expand our product offering to clients and the capabilities of our commodities alliance with Glencore."

(In 2006 Credit Suisse and Glencore International AG, one of the world's largest physical traders of base metals, announced a derivatives and structured products trading alliance in base and precious metals.)

Lon Tiemann built and served as the head of North American structured transactions at Merrill Lynch Commodities and had previously worked at Koch Energy Trading and Entergy-Koch prior to its acquisition by Merrill Lynch. He will lead the effort of building a portfolio of physical gas assets and providing structured transactions to the North American gas markets.

Todd will primarily manage the firm's physical gas asset portfolio. Almy and Okeke will lead deal execution involving gas storage, transport, utility and liquefied natural gas assets.

A Credit Suisse spokesman said the bank aims to be a "top-tier" player in global commodities; however, he would not provide details on the number of gas traders the bank plans to hire or the amount of gas it expects to trade.

Earlier this year Gazprom Marketing and Trading Ltd., a unit of Russia's OAO Gazprom, opened a Houston office to trade natural gas (see NGI, Oct. 5).

Merrill Lynch ranked 21st in the third quarter on NGI's ranking of top North American gas marketers.

Bank of America rescued Merrill Lynch from an uncertain financial future in mid-September 2008 as competing global investment banker Lehman Brothers filed for Chapter 11 bankruptcy, sparking much of the ongoing market turmoil (see NGI, Sept. 22, 2008). The firms later sought to combine their energy trading businesses (see NGI, Oct. 27, 2008).

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