HSBC has hired Rod Sykes as its new co-head of Asian debt finance replacing Andy Cairns who is re-locating to a bigger job at the bank's debt finance group in New York. Sykes comes to HSBC from Merrill Lynch, where he has been head of Asian DCM for about a year.

However, the majority of his career has been spent at Morgan Stanley and he will now join two of his ex-colleagues to round out what must rank as the most experienced high yield team in Asia. HSBC's ambitions to develop a credible high yield franchise were first made evident in March when it lured Chris Zilla from Morgan Stanley to become head of Asian high yield debt trading.

Then two months ago, Jason Au also joined HSBC from Morgan Stanley. Au had previously been considered the right hand man of the US investment bank's high profile general industries head Sheldon Trainor, who has also since left to become co-head of Asian investment banking at Merrill Lynch. Together the two originated a string of high yield bond transactions for Chinese mid caps in 2004, propelling the bank up the fee league tables.

Sykes himself has been based in Asia since 1991 and in that time has probably originated more high yield bond mandates than any other banker. Over the past year, he and his team have also re-built Merrill's DCM franchise into a highly profitable business that encompasses high margin trades as well as franchise enhancing flow business.

HSBC, by contrast has never had a meaningful high yield business. It has always taken a more conservative stance than many of its peers - only leading deals for companies it has some form of lending relationship with.

It is now hoping to plug this very lucrative hole, although the overall policy will not change. Indeed, the bank believes its policy may help it win deals, with investors likely to take added comfort in a company's underlying creditworthiness if they know HSBC has already done its own due diligence.

Sykes will work alongside Aaron Tan, who has been co-head with Cairns since April. The two are considered to have complementary skill-sets since Tan is a loans specialist, while Sykes' expertise lies in bonds.

Tan will nominally run Greater China, while Sykes will oversee the rest of the region. Cairns, meanwhile, will leave for New York later this autumn.

He will become a managing director in the bank's New York debt finance group leveraging his considerable FIG expertise. Under his leadership, HSBC has developed a highly credible profile in both Korea and China, most recently leading a $1 billion offering for Chexim.

Both Sykes and Tan will report to Stephen Williams, co-head of Asia Pacific investment banking finance. The heads of Asian bond and loan syndicate, securitization and transaction management - Sean Henderson, Phil Lipton, Sarwar Ahmed and Andrew Ferguson - will continue reporting to Williams directly, as will the bank's DCM heads in Australia and Japan.

The Asia Pacific investment banking finance group now numbers 110 and incorporates ECM and DCM. Williams co-head is another former Morgan Stanley banker, Danny Palmer, while his direct boss is Mark Bucknall, a previous incumbent of Sykes job and currently global co-head of investment banking.

Recently, the bank has also been filling out the ranks in Asia with two hires from the UK. It transferred Alexi Chan to Singapore as a director in the South East Asian debt group and Alex Hayes-Griffin to Hong Kong as an associate director in FIG DCM.