• Bank of America top underwriter of convertibles in January
• Convertibles issuance totals $12.96 billion in January
By Evan Weinberger
New York, Jan. 31 - Citigroup got off to a strong start in defending its 2007 title as top underwriter of convertible bonds, but Bank of America was a runaway winner in new convertibles issuance in January. Both banks drove up their totals by serving as the sole bookrunners on their own offerings of convertible preferred stock which were meant to shore up balance sheets hammered by subprime mortgage losses.
The year got off to a rollicking start, with more than four times the money raised in three fewer deals over the same period last year.
Bank of America raised $6.9 billion in one record deal - its offering of 7.25% perpetual convertible preferreds that priced on Jan. 24. The principal amount was $6 billion, and a $900 million greenshoe was exercised on Jan. 29. That $6.9 billion represented 53.25% of the total amount raised for the month.
In January 2007, Bank of America came in 10th, raising $133 million, or 4.08% of the month's total, in two deals.
Citigroup raised $3.169 billion, or 24.45% of the total new issuance for January, in one deal. That deal was the bank's offering of 6.5% perpetual convertible preferred stock, which priced on Jan. 17. The principal amount on the deal was $2.9 billion and Citigroup exercised its $260.59 million greenshoe on Jan. 25.
Citigroup had a slow start last year, when it placed seventh in the month of January, raising $153 million, or 4.69% of the month's total.
Citigroup came on strong as the year wore on, however. The bank ultimately took the title for the second straight year by raising $17.487 billion, or 18.07% of the year's total, through 41 deals in 2007.
With two deals totaling nearly $10 billion, January 2008 saw more than four times the amount raised through convertibles than January 2007. A total of $12.957 billion was raised through nine deals in the first month of 2008, compared with $3.272 billion raised through 12 deals in January 2007.
Average deal size was $1.440 billion in January 2008, compared with an average deal size of $273 million in the same month last year.
Goldman Sachs placed third for January, raising $1.336 billion, or 10.31% of the month's total, in two deals. And Goldman had to leave the building to raise that cash.
Goldman placed sixth in January 2007, raising $248 million, or 7.59% of the month's total, through three deals.
Last year's pace setter for January, JPMorgan, placed eighth this year. In January 2007, JPMorgan $814 million, or 24.89% of the month's total, in six deals. This year, JPMorgan raised $100 million, or 0.77% of the month's total, in one deal.
Banks raised $96.758 billion through 198 deals in 2007, making it among the highest grossing years in the history of convertibles.
After one month, the convertibles market is on pace to obliterate that record, assuming more financial institutions need to right themselves through mega-deals as the year moves along.
January
2007 Comparables
| Underwriter | Amount | No. | Share | Rank | Amount | No. | Share
|
| 1 | Banc of America | 6.900 | 1 | 53.25% | 10 | 0.133 | 2 | 4.08%
|
| 2 | Citigroup | 3.169 | 1 | 24.45% | 7 | 0.153 | 1 | 4.69%
|
| 3 | Goldman Sachs | 1.336 | 2 | 10.31% | 6 | 0.248 | 3 | 7.59%
|
| 4 | UBS | 0.558 | 3 | 4.31% | 5 | 0.268 | 2 | 8.20%
|
| 5 | Merrill Lynch | 0.416 | 3 | 3.21% | 4 | 0.278 | 2 | 8.49%
|
| 6 | Credit Suisse | 0.250 | 1 | 1.93% | 8 | 0.151 | 1 | 4.61%
|
| 7 | Morgan Stanley | 0.150 | 1 | 1.16% | 2 | 0.485 | 2 | 14.81%
|
| 8 | JPMorgan | 0.100 | 1 | 0.77% | 1 | 0.814 | 6 | 24.89%
|
| 9 | Friedman Billings | 0.078 | 1 | 0.60% | 13 | 0.029 | 1 | 0.88%
|
| Total | 12.957 | 9 | 3.272 | 12 |
|
|
|
| Average size: | 1.440 | 0.273 |
|
|
|
|
|
|
|
|
|
|
|
| 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.
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
