Goldman Sachs is top U.S. market convertibles underwriter for 2012

• U.S. convertibles issuance totals $22.33 billion for 2012

By Rebecca Melvin

New York, Dec. 31 - The top U.S. convertibles underwriter for 2012 was Goldman Sachs & Co., which edged out the reigning incumbent J.P. Morgan Securities LLC, by bringing $3.97 billion in new issuance in 15 deals, accounting for nearly 18% of total issuance, according to data compiled by Prospect News.

JPMorgan, which was the No. 1 convertibles underwriter in 2010 and 2011, slipped to the No. 2 slot, with $3.66 billion in 31 deals, or 16% of the total. JPMorgan's volume for the year was about 22% below its 2011 tally. Goldman Sachs' annual volume for 2012 was 12.5% below its 2011 tally.

Bank of America Merrill Lynch jumped two slots to the No. 3 ranking convertibles underwriter for 2012, bringing $3.21 billion in 21 deals for 14.4% of total volume. That amount was 41% higher than Bank of America's 2011 issuance total.

Morgan Stanley & Co. ranked No. 4 for 2012, which was also its rank in 2011. Morgan Stanley brought $2.1 billion in 15 deals for 9.6% of the total volume in 2012. Last year, Morgan brought $3.13 billion in 16 deals.

Citigroup Global Markets Inc. fell to fifth place among underwriters in the past year from its previous third-place ranking, with $1.55 billion in new issuance in 17 deals for nearly 7% of total volume. That level compared to $4.43 billion in new issuance in 2011.

Credit Suisse Securities (USA) LLC and Barclays ranked sixth and seventh, with about $1.5 billion in new convertibles issuance each; and UBS Securities LLC was eighth, with about $900 million in eight deals, accounting for 4% of the total.

Rounding out the top 10 underwriters ranking list for 2012 were Wells Fargo Securities LLC and Deutsche Bank Securities Inc.

Goldman Sachs was the No. 1 underwriter for the fourth quarter, bringing $1.6 billion in six deals for 24% of the total, and the New York-based investment bank was also the No.1 underwriter for December, bringing $1.46 billion in four deals for 54% of total volume.

Credit Suisse was the No. 2 underwriter of convertibles for the fourth quarter, but Morgan Stanley was the No. 2 underwriter for December.

JPMorgan, which has typically been atop the rankings for the last several years, was sixth in the league tables for the fourth quarter and third for December.

Fourth-quarter issuance for 2012 was more than double fourth-quarter issuance for 2011, with nearly $6.4 billion in 23 deals, compared to $3.02 billion in 11 deals for the same period of 2011.

The most recent quarter was boosted by a rally in the stock markets compared to the year-earlier period when volatility related to the European sovereign debt crisis and fears of contagion depressed the capital markets in general.

For December alone, there was $2.69 billion in new issuance in eight deals, compared to December a year ago, when just $225 million in two deals priced. This past December was on par with issuance volume in 2010 when $2.84 billion in 12 deals priced.

Total U.S. convertibles issuance for 2012 was boosted by a strong fourth quarter and stood at $22.33 billion in 84 deals, but that was still 13.9% lower than the $25.93 billion in 84 deals for 2011 and down compared to $42.74 billion in 100 deals for 2010.

Global convertibles issuance for 2012 was on par with 2011. Total global convertibles issuance was $53.07 billion in 211 deals, compared to $53.69 billion in 200 deals for the year earlier.

Average deal size in the United States fell to $266 million per deal, compared to $309 million per deal for 2011. Globally, deal size - like the total issuance - was more static, at $252 million per deal for 2012, compared to $268 million per deal for 2011.

But there were still four $1 billion plus deals that got done during the year in the United States, and they included Priceline.com Inc., United Technologies Inc., WellPoint Inc. and Cobalt International Energy Inc. In 2011, there was only one convertible deal that was more than $1 billion in size and that was MetLife Inc.'s mandatory units.

Lower convertibles issuance in 2012 was driven primarily by low interest rates, sources said.

U.S. market, year to date

2011 Comparables

	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Goldman Sachs	3.968	15	17.77%	2	4.556	19	17.56%
2	JPMorgan	3.657	31	16.38%	1	4.705	34	18.13%
3	Bank of America	3.209	21	14.37%	5	2.284	18	8.80%
4	Morgan Stanley	2.144	15	9.60%	4	3.132	16	12.07%
5	Citigroup	1.551	17	6.95%	3	4.433	19	17.08%
6	Credit Suisse	1.513	13	6.78%	9	0.712	7	2.75%
7	Barclays	1.492	12	6.68%	7	1.151	10	4.44%
8	UBS	0.891	8	3.99%	6	1.264	8	4.87%
9	Wells Fargo	0.780	12	3.49%	10	0.409	5	1.58%
10	Deutsche Bank	0.693	10	3.11%	8	1.083	13	4.17%
	Total	22.328	84	25.951	84
	Average size:	0.266	0.309
Global, year to date
					2011 Comparables
	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Goldman Sachs	5.972	24	11.25%	2	6.105	25	11.37%
2	JPMorgan	4.867	38	9.17%	1	6.269	45	11.67%
3	Credit Suisse	4.306	21	8.11%	8	1.960	16	3.65%
4	Bank of America	4.214	30	7.94%	6	3.321	22	6.18%
5	Morgan Stanley	3.841	26	7.24%	4	4.558	21	8.49%
6	Deutsche Bank	3.353	30	6.32%	11	1.557	17	2.90%
7	Citigroup	2.847	27	5.37%	3	5.284	24	9.84%
8	Barclays	2.306	19	4.35%	9	1.892	16	3.52%
9	UBS	1.986	16	3.74%	10	1.853	13	3.45%
10	BNP	1.596	12	3.01%	13	1.150	9	2.14%
	Total	53.067	211	53.694	200
	Average size:	0.252	0.268
U.S. market, fourth quarter
					2011 Comparables
	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Goldman Sachs	1.554	6	24.37%	4	0.500	2	16.54%
2	Credit Suisse	0.927	7	14.54%
3	Morgan Stanley	0.851	5	13.34%	2	0.690	1	22.83%
4	Bank of America	0.703	5	11.02%
5	UBS	0.564	3	8.85%
6	JPMorgan	0.467	6	7.33%	3	0.573	4	18.96%
7	Jefferies	0.290	2	4.55%	7	0.050	1	1.65%
8	Wells Fargo	0.285	4	4.46%
9	Barclays	0.177	3	2.78%	6	0.197	2	6.52%
10	RBS	0.151	2	2.37%
	Total	6.377	23	3.023	11
	Average size:	0.277	0.275
U.S. market, December
					2011 Comparables
	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Goldman Sachs	1.464	4	54.41%	1	0.100	1	40.00%
2	Morgan Stanley	0.715	2	26.56%
3	JPMorgan	0.230	1	8.54%	1	0.100	1	40.00%
4	RBC	0.095	1	3.52%
4	RBS	0.095	1	3.52%
6	Citigroup	0.023	1	0.85%
6	Credit Suisse	0.023	1	0.85%
6	Wells Fargo	0.023	1	0.85%
9	Wunderlich	0.008	1	0.29%
9	MLV	0.008	1	0.29%
9	UBS	0.008	1	0.29%
	Total	2.692	8	0.250	2
	Average size:	0.336	0.125
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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