Nice, detailed story out from Bloomberg today on how the very bankers who arranged financing for last year's largest leveraged buyouts -- TXU Corp. and First Data Corp., among others – are now breaking free of their firms as the pace of takeovers grows sluggish, creating opportunities for less-established lenders to step in.

The departures include Morgan Stanley's Ashok Nayyar, co- head of leveraged finance, and Deutsche Bank AG's Michael Paasche, who ran global leveraged finance and plans to depart this year, said people with knowledge of their situations.

Banks such as London-based Barclays Plc, which largely avoided losses on leveraged loans and subprime mortgages that have led to $383 billion of writedowns and credit losses, and private-equity firms like Blackstone Group LP's GSO Capital Partners are financing deals as Wall Street reduces lending for buyouts to the lowest level this decade. Companies have announced $118 billion of LBOs so far in 2008, about a third of last year's record pace, data compiled by Bloomberg show.

"Firms are deciding they are going to get out of leveraged finance or not focus on it so much," said Jeanne Branthover, head of the financial services practice for Boyden Global Executive Search in New York. "Leveraged finance is one area especially where foreign banks and private-equity firms are taking advantage of the market."

Citigroup Inc., which joined Deutsche Bank in financing the $25.6 billion buyout of First Data by New York-based Kohlberg Kravis Roberts & Co. and funded the $32 billion LBO of Dallas- based TXU by KKR and TPG Inc. of Fort Worth, Texas, lost bankers, including Edward Crook, a managing director who worked on the First Data deal. Mickey Brennan, co-head of high-yield and loan sales, is retiring, said the people who declined to be identified.

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