Fred Joseph, the former chief executive of Drexel Burnham Lambert and pioneer of using high-yield debt to finance leveraged buy-outs, is staging a comeback for junk bonds in the US mid-market.

He has emerged as co-head of investment banking at Morgan Joseph, a small US finance house that changed its name from Morgan Lewins on his behalf. Joseph has put together a team of former members of Drexel's high-yield origination group to target issuers wishing to raise as little as $75m (€65m). This is around half the lowest level considered by other Wall Street banks.