• U.S. market convertibles issuance totals $47.55 billion year to date
• May convertibles issuance totals $15.76 billion in 20 deals
By Rebecca Melvin
New York, May 30 - Banc of America remained the top U.S. market convertible underwriter for the first five months of 2008, with $10.06 billion in 16 deals, accounting for 21.16% of total issuance, according to data compiled by Prospect News.
Citigroup was the No. 2 U.S. market convertible underwriter, with 15 deals totaling $8.07 billion, or 16.97% of the total. JPMorgan was No. 3, running the books on 20 deals totaling $6.62 billion, or 13.93% of the total.
New issuance for the year to date stands at $47.55 billion, which is down from $49.96 billion for the comparable period of 2007, according to Prospect News data.
The number of new deals stands at 71, compared to 102 deals for the same period of 2007.
Nevertheless the level of new issuance was viewed favorably by several market sources, given the condition of the financial markets in general this year.
"I'm pretty happy with it. It's better than some other areas, and we've had a decent number of deals from which to choose," a New York-based convertibles buyside portfolio manager said.
May new issuance was $15.76 billion, which was up from $12.70 billion in new issuance in April and $12.70 billion in new issuance tallied in May 2007. The May and April totals compared very favorably to $3.67 billion of new issuance notched in March.
J.P. Morgan Securities Inc. was the No. 1 ranking underwriter for May, pricing $4.55 billion in new issuance in six deals, representing a 28.87% share of the total.
Interestingly mandatory convertibles comprised the bulk of the month's new issuance, with a record $10.9 billion of the total, according to Lehman Brothers research.
The single largest new issue in May was American International Group Inc.'s $5.88 billion in mandatory convertibles, priced May 13. This was followed by Fannie Mae's $2.25 billion of mandatory convertibles, priced May 9.
Substantial $1 billion plus deals were also priced by Archer-Daniels-Midland Co. and Chesapeake Energy, while Legg Mason priced a deal of exactly $1 billion.
The issuers were from a sprinkling of industry sectors, but there were four energy deals, or five if alternative energy was counted among the group.
Energy issuers in May included Chesapeake Energy with $1.38 billion of convertible bonds; Patriot Coal with $200 million of convertible senior notes; Carrizo Oil & Gas with $374 million of convertible senior notes and Hercules Offshore with $250 million of convertible senior notes. Solar-play JA Solar also priced in May, offering $400 million of convertible senior notes.
Year to date
2007 Comparables
| Underwriter | Amount | No. | Share | Rank | Amount | No. | Share
|
| 1 | Banc of America | 10.064 | 16 | 21.16% | 5 | 4.545 | 18 | 9.10%
|
| 2 | Citigroup | 8.070 | 15 | 16.97% | 3 | 6.487 | 19 | 12.99%
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| 3 | JPMorgan | 6.623 | 20 | 13.93% | 2 | 6.727 | 25 | 13.47%
|
| 4 | Lehman | 6.020 | 9 | 12.66% | 8 | 2.684 | 12 | 5.37%
|
| 5 | Goldman Sachs | 5.133 | 12 | 10.79% | 9 | 2.659 | 13 | 5.32%
|
| 6 | Wachovia | 2.293 | 5 | 4.82% | 13 | 0.344 | 2 | 0.69%
|
| 7 | Deutsche Bank | 2.285 | 10 | 4.81% | 4 | 6.392 | 13 | 12.80%
|
| 8 | UBS | 1.812 | 13 | 3.81% | 10 | 2.264 | 14 | 4.53%
|
| 9 | Merrill Lynch | 1.467 | 12 | 3.09% | 6 | 4.375 | 16 | 8.76%
|
| 10 | Credit Suisse | 1.441 | 9 | 3.03% | 7 | 3.981 | 12 | 7.97%
|
| Total | 47.550 | 71 | 49.956 | 102 |
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| Average size: | 0.670 | 0.490 |
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| May
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| | | | | 2007 Comparables
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| Underwriter | Amount | No. | Share | Rank | Amount | No. | Share
|
| 1 | JPMorgan | 4.548 | 6 | 28.87% | 8 | 0.302 | 3 | 2.38%
|
| 2 | Citigroup | 4.061 | 6 | 25.77% | 1 | 2.604 | 6 | 20.50%
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| 3 | Banc of America | 1.960 | 8 | 12.44% | 3 | 1.966 | 7 | 15.48%
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| 4 | Lehman | 1.233 | 4 | 7.83% | 5 | 1.448 | 3 | 11.40%
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| 5 | Goldman Sachs | 0.877 | 5 | 5.57% | 7 | 0.672 | 2 | 5.29%
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| 6 | Credit Suisse | 0.638 | 3 | 4.05% | 11 | 0.230 | 1 | 1.81%
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| 7 | Deutsche Bank | 0.621 | 2 | 3.94% | 2 | 2.103 | 4 | 16.55%
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| 8 | UBS | 0.509 | 4 | 3.23% | 6 | 0.776 | 5 | 6.11%
|
| 9 | Merrill Lynch | 0.338 | 3 | 2.14% | 15 | 0.096 | 1 | 0.75%
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| 10 | Barclays | 0.276 | 1 | 1.75% | 10 | 0.230 | 1 | 1.81%
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| Total | 15.757 | 20 | 12.702 | 21 |
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| Average size: | 0.788 | 0.605 |
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| Prospect News Convertibles Underwriter Rankings
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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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