Citigroup's lead in convertibles issuance narrows for the year in August

• Convertibles issuance at $68.41 billion year to date

• Convertibles issuance totals $6.73 billion in August

By Evan Weinberger

New York, Aug. 31 - Citigroup maintained its year-to-date lead in new convertibles, although the gap slimmed over second-place JPMorgan, but Lehman Brothers ran away with the lead in August on the strength of only one new deal. According to data compiled by Prospect News, convertibles issuance picked up significantly over the doldrums of July.

After a slow August raising $625 million as joint bookrunner in two deals, Citigroup has brought to market $10.404 billion in 31 new deals so far in 2007, representing 15.21% of new deals for the year. Citigroup's total for the year so far is nearly twice what the company raised to this point in 2006, when it was in second place after handling $5.988 billion in 21 new deals for a 14.82% share of the total.

Lehman Brothers took the title for August, raising $1.5 billion in one deal, Advanced Micro Devices Inc.'s 5.75% convertible senior notes due Aug. 15, 2012. That represents 22.29% of the month's total of $6.728 billion issued in 8 deals. Goldman Sachs, which raised $735 million, and Banc of America, which raised $640 million, came in third and fourth for money raised respectively, but participated in the most deals at three. JP Morgan issued $1.1 billion in new convertibles in one deal to place second.

The $6.728 billion issued in eight deals for August was a steep increase over both July and August 2006. A total of $3.560 billion was raised in 14 deals in July, and eight deals brought in $2.113 billion in August 2006. The average amount of money in each new deal was up big in August 2006, $841 million, versus an average size of $246 million in August 2006.

So far in 2007, $68.410 in new convertibles has been issued in 153 new deals. That represents along jump over this point in 2006, when $40.408 billion was issued in 84 new deals. That is a 69.8% increase over new issuance for the comparable period of 2006. The year-to-date total for 2007 is the highest since 2003, when $69.82 was raised through August.

The average size of new deals is lower in 2007 versus 2006, however. The average size in 2007 is $447 million this year compared to $481 million for 2006.

JPMorgan placed second for August and maintained its second place status for the year. The firm was the bookrunner for $1.1 billion issued in one deal, VeriSign Inc.'s 3.25% junior subordinated convertible debentures due Aug. 15, 2037. That $1.1 billion represented 16.35% of total new issuance in August. For the year, JPMorgan has issued $10.083 billion in 37 deals, representing 14.74% of the total dollar amount for 2007.

Deutsche Bank maintained third place in the standings for the year at $7.839 billion in 20 deals on the year, representing 11.46% of the total dollar amount issued. Deutsche Bank was the underwriter for $518 million issued in two deals, representing 7.7% of the total issuance for August. That put Deutsche Bank in sixth place for the month.

The gap separating the top two underwriters for the year slimmed in August. The difference between the dollar amounts underwritten by Citigroup and JPMorgan thinned to $321 million. It was at $1.453 million in July.

The Prospect News figures cover dollar-denominated deals offered in the United States as registered transactions or under Rule 144A.

Year to date

2006 Comparables

	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Citigroup	10.404	31	15.21%	2	5.988	21	14.82%
2	JPMorgan	10.083	37	14.74%	5	3.563	17	8.82%
3	Deutsche Bank	7.839	20	11.46%	9	1.308	5	3.24%
4	Morgan Stanley	7.644	14	11.17%	3	5.595	18	13.85%
5	Banc of America	5.897	29	8.62%	8	3.323	21	8.22%
6	Merrill Lynch	5.045	22	7.37%	1	6.833	25	16.91%
7	Lehman	4.923	17	7.20%	7	3.348	8	8.29%
8	Credit Suisse	4.353	15	6.36%	10	0.963	7	2.38%
9	Goldman Sachs	4.129	20	6.04%	4	3.689	12	9.13%
10	UBS	2.927	18	4.28%	6	3.534	15	8.75%
	Total	68.410	153	40.408	84
	Average size:	0.447	0.481
August
					2006 Comparables
	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Lehman	1.500	1	22.29%	7	0.144	1	6.80%
2	JPMorgan	1.100	1	16.35%	2	0.440	3	20.82%
3	Goldman Sachs	0.735	3	10.92%
4	Banc of America	0.640	3	9.51%	5	0.190	2	8.99%
5	Citigroup	0.625	2	9.29%	6	0.151	2	7.16%
6	Deutsche Bank	0.518	2	7.70%	3	0.230	1	10.88%
7	Morgan Stanley	0.500	1	7.43%
7	Friedman Billings	0.500	1	7.43%
7	Bear Stearns	0.500	1	7.43%
10	Wachovia	0.110	1	1.63%	4	0.230	1	10.88%
	Total	6.728	8	2.113	8
	Average size:	0.841	0.264
Prospect News Convertibles Underwriter Rankings

Criteria

• The tables include all underwritten dollar-denominated offerings sold in the United States as public or Rule 144A deals reported to Prospect News.

• Offerings are included in the time period in which they price.

• Amounts are based on the total sales price (face amount multiplied by the offering price). The full amount is credited to the bookrunner (or lead manager if no bookrunners). For multiple bookrunners (or lead managers), the total value is divided equally among all the firms.

• Each tranche is counted as a separate deal.

• Bonds are included that convert into the issuer's or another company's stock or the cash equivalent; bonds that convert into other bonds are excluded.

• Structured products issued by an investment bank and exchangeables for or linked to another company's stock are excluded.

• Units made up of a bond and stock are included; units made up of a bond and warrants are excluded.

• Preferred issues are included using the same criteria as for bonds.

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