When Credit Suisse First Boston announced it would buy Donaldson Lufkin Jenrette in August, the men who ran the leveraged finance businesses at each bank heaved a sigh of relief. For over a year, each of them had been trying to expand their teams. Because so many other banks are doing this in Europe, where the high-yield debt and bank loan markets are developing and competition to dominate is tough, it is not easy to find the right "talent".

Steven Rattner, now a month into his job as head of European leveraged finance at CSFB and previously head of leveraged finance at DLJ in Europe, explains: "I had been looking for three high-yield capital markets bankers for over a year but had not been able to find the right ones. CSFB had them."

His co-head of the new group, Jim Amine, previously head of leveraged finance at CSFB, tells a similar story: "It is hard to recruit in this area. We had been trying to find a number of sales people and a trader. We now have them, from DLJ."

The alleviation of staff shortages was not the only good news for the CSFB and DLJ teams, now operating as a combined group under the CSFB name. By combining their positions in the European leveraged finance market, they plan to dominate the leveraged market, parti-cularly on the bonds side.

DLJ is the undisputed leader in the US market. Mr Rattner and Mr Amine have the same ambitions for Europe. "We plan to be the number one in leveraged finance. We have an unmatched depth and breadth of talent, and this will give us our strength."

A league table by Thomson Financial Securities Data shows that, between January and October 21, DLJ was the biggest underwriter of US high-yield bonds, capturing a 14.5 per cent market share. Below it rank Goldman Sachs, Salomon Smith Barney and Morgan Stanley Dean Witter.

For euro-denominated high-yield bonds, DLJ ranks seventh in the same period and CSFB comes in at number three, with 7.60 and 5.70 per cent market share respectively. The leader is Salomon Smith Barney with a 16.90 market share, followed by Goldman Sachs and Morgan Stanley Dean Witter. The new CSFB wants to make one plus one equal more than two, and push to the top of that league table.

The provision of leveraged finance - which provides debt financing via bonds or loans for companies which require high levels of debt and are thus often rated below investment grade - is a well-established part of investment banking in the US.

In Europe, the market is still at an early stage, but has already developed fast enough to allow multi-billion dollar deals to be completed. Leveraged buy-outs, often done for private equity firms, require debt financing tools. As banks become more reluctant to lend directly to companies, they increasingly turn to the capital markets.

Mr Rattner said he expected demand for debt financing to continue to grow in Europe. "More companies are aware that in order to have the right capital structure, they need to include debt."

Apart from fees from the debt financing arranging, this business can also create many other business opportunities to make money, from future equity transactions or further debt financing. "Leveraged financing generates business for the whole firm. Once you do a good job for a client, which is often a young and growing company at this stage, you have a client for life. At DLJ, it was estimated that 50 per cent of the equity business came from clients that had originally needed leveraged financing," says Mr Rattner.

The co-heads both have extensive experience, with Mr Rattner a high-yield veteran for 16 years and Mr Amine in the market for 10 years. Their team numbers around 100 people in Europe. They report to Bennett Goodman, the global head of leveraged finance based in New York.

Despite the current turmoil in the high-yield market, the men believe that the new CSFB will start to build its dominance this year, by providing liquidity in the secondary market to investors at a time when many banks are pulling out. "Our market share can double in periods like this, because we remain committed to distribution and trading in times of volatility," said Mr Rattner.