JPMorgan top U.S. market convertibles underwriter for year to date

• U.S. convertibles issuance stands at $19.45 billion year to date

• November U.S. convertibles issuance totals $975 million

By Rebecca Melvin

New York, Nov. 30 - J.P. Morgan Securities LLC remained top underwriter of convertible debt for the year to date through November, bringing $3.41 billion in 30 deals, or 17.5% of total issuance, for the first 11 months of 2012, according to Prospect News data.

Bank of America Merrill Lynch was the No. 2 underwriter of convertible debt with $3.19 billion in 21 deals for 16.4% of total volume, while Goldman Sachs & Co. stayed at No. 3 with $2.47 billion in 11 deals for 12.7% of the total.

Total U.S. convertible volume for the first 11 months of 2012 was $19.45 billion of new issuance in 75 deals, which stands 24% below the comparable period of 2011.

For November alone, new issuance totaled $975 million in seven deals, which compared to $2.65 billion in seven deals for October and $1.43 billion in five deals for the year-earlier November period.

Jefferies & Co. topped the league tables for U.S. issuance in November with $230 million, or 24%, of volume.

Worldwide, JPMorgan was the top underwriter for global new issuance, with $4.62 billion in 37 deals, accounting for 9.8% of volume, followed closely by Goldman Sachs, which brought $4.47 billion in 20 deals, accounting for 9.5% of volume.

Total global issuance is down nearly 5% for the year to date at $47.32 billion in 197 deals for the first 11 months of 2012, compared to $49.72 billion in 192 deals for the same period of 2011.

November's deals were small $100 million to $200 million deals with the exception of two which were below $100 million. Nevertheless, there were notable deals.

Vector Group Ltd.'s new 2.5% six-year convertibles added on their debut in the secondary market and were quoted at 102.85 bid versus an underlying share price of $14.60 after the Miami-based tobacco holding company sold an upsized $200 million of the notes at the rich end of talk. Allocations of the paper looked to have been balanced between hedged and outright players.

iStar Financial Inc.'s new 3% convertibles expanded initially on their debut, but they faded later with weaker shares of the New York-based commercial real estate lender.

iStar priced $175 million of the notes at the rich end of talk, which was increased from the originally talked deal size of $100 million. The new issue was around 100.5 with the underlying shares down 1.75% to 2%.

AK Steel Holding Corp.'s new 5% seven-year convertibles fell in active trade on their debut after the West Chester, Ohio-based steel manufacturer sold an upsized $150 million of the notes at pricing beyond the rich end of talk.

The low print of the new AK Steel bonds looked to be 97.75, while the underlying shares of the company opened sharply lower and closed down 10%.

Meanwhile, Meritor Inc.'s new 7.875% convertibles traded little changed outright despite higher shares after the upsized $250 million deal priced this past week at a steep 10% discount and toward the cheap end of the coupon range.

The new Meritor edged up slightly from its discounted offer price of 90.

U.S. market, year to date

2011 Comparables

	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	JPMorgan	3.408	30	17.53%	1	4.605	33	17.92%
2	Bank of America	3.186	21	16.38%	5	2.284	18	8.89%
3	Goldman Sachs	2.466	11	12.68%	2	4.456	18	17.34%
4	Credit Suisse	1.490	12	7.66%	9	0.712	7	2.77%
5	Citigroup	1.484	16	7.63%	3	4.433	19	17.25%
6	Barclays	1.479	12	7.60%	7	1.151	10	4.48%
7	Morgan Stanley	1.425	13	7.33%	4	3.132	16	12.18%
8	UBS	0.883	7	4.54%	6	1.264	8	4.92%
9	Wells Fargo	0.757	11	3.89%	10	0.409	5	1.59%
10	Deutsche Bank	0.693	10	3.57%	8	1.083	13	4.22%
	Total	19.445	75	25.701	82
	Average size:	0.259	0.313
Global, year to date
					2011 Comparables
	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	JPMorgan	4.618	37	9.76%	1	6.169	44	12.41%
2	Goldman Sachs	4.470	20	9.45%	2	6.005	24	12.08%
3	Credit Suisse	4.283	20	9.05%	9	1.571	15	3.16%
4	Bank of America	4.191	30	8.86%	6	3.321	22	6.68%
5	Deutsche Bank	2.890	28	6.11%	10	1.557	17	3.13%
6	Morgan Stanley	2.507	21	5.30%	4	4.558	21	9.17%
7	Citigroup	2.499	24	5.28%	3	5.151	23	10.36%
8	Barclays	2.293	19	4.84%	8	1.759	15	3.54%
9	UBS	1.646	14	3.48%	7	1.853	13	3.73%
10	BNP	1.465	11	3.10%	11	1.150	9	2.31%
	Total	47.323	197	49.718	192
	Average size:	0.240	0.259
U.S. market, November
					2011 Comparables
	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Jefferies	0.230	1	23.59%
2	JPMorgan	0.153	4	15.68%	2	0.473	3	33.07%
3	Bank of America	0.117	3	11.97%
4	Barclays	0.092	2	9.40%	3	0.197	2	13.77%
5	Morgan Stanley	0.058	2	5.98%
6	BNP	0.056	1	5.77%
6	RBS	0.056	1	5.77%
6	UBS	0.056	1	5.77%
9	Stifel	0.055	1	5.64%
10	Citigroup	0.025	1	2.56%	1	0.713	3	49.81%
10	Credit Suisse	0.025	1	2.56%
10	Wells Fargo	0.025	1	2.56%
	Total	0.975	7	1.431	5
	Average size:	0.139	0.286
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 (for U.S. deals), or all underwritten offerings (global deals).

• 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 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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