Bank of America top U.S. market convertibles underwriter year to date

• U.S. convertibles issuance reaches $8.21 billion for year to date

• May U.S. convertibles issuance totals $2.42 billion in seven deals

By Rebecca Melvin

New York, May 31 -Bank of America Merrill Lynch remained the top underwriter of convertible debt for the year to date through May, having brought $1.91 billion in nine deals, or 23% of the total, according to Prospect News data.

J.P. Morgan Securities LLC was a close second, having brought $1.65 billion in 12 deals, for 20% of the total for the year to date.

Total U.S. new issuance for 2012 so far is $8.21 billion in 26 deals, which is less than half of the $18 billion in 52 deals for the same period of 2011 in the U.S. market.

For May alone, there was $2.42 billion in new issuance in seven new deals, which was only slightly lower than the $2.65 billion in 10 new deals brought in May 2011.

JPMorgan was the top underwriter of convertible securities in May with $695 million in five deals, accounting for 29% of the total. Bank of America was No. 2 with $570 million in one deal for 24%. Deutsche Bank Securities Inc. was third place with $323 million in two deals, or 13% of the total.

After that, issuance dropped into the single digits for percentages of the total and included Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC, UBS Securities LLC and Citigroup Global Markets Inc.

For May, Goldman Sachs & Co. ranked in the surprisingly low eighth position, with $75 million in one deal, and the firm ranked No. 3 for year to date in the United States, bringing $1.2 billion in three deals for 14.6% of the total.

But Goldman was the No. 1 underwriter of convertibles in the global market, bringing $2.4 billion in eight deals for 13.6% of the total for the year to date.

Year-to-date volume of global convertible securities was $17.72 billion in 83 deals, which was down compared to $35.34 billion in 117 deals for the same period in 2011.

Among May's notable U.S. deals, Annaly Capital Management Inc. priced $750 million of three-year convertible senior notes on May 9 that were reoffered at 98 and came with a 5% coupon and a 15% initial conversion premium.

The Annaly deal had a $112.5 million greenshoe, and the overnight registered offering was brought by joint bookrunners Credit Suisse, Morgan Stanley, JPMorgan and UBS.

On May 1, NextEra Energy Inc. sold $600 million of three-year mandatory convertible equity units at a discount to their $50 par in a registered, bought deal via bookrunner Bank of America Merrill Lynch.

And on May 11, Medicis Pharmaceutical Corp. priced an upsized $450 million of five-year convertible senior notes at par to yield 1.375% with an initial conversion premium of 25%.

The registered Medicis deal came toward the cheap end of revised coupon talk via Deutsche Bank and JPMorgan as joint bookrunners.

U.S. market, year to date

2011 Comparables

	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Bank of America	1.907	9	23.22%	4	1.649	12	9.17%
2	JPMorgan	1.652	12	20.12%	3	3.166	22	17.62%
3	Goldman Sachs	1.197	3	14.58%	2	3.467	12	19.29%
4	Morgan Stanley	0.993	7	12.09%	5	1.107	7	6.16%
5	Citigroup	0.562	4	6.85%	1	3.490	14	19.42%
6	Barclays	0.443	4	5.40%	7	0.867	7	4.82%
7	Deutsche Bank	0.400	3	4.87%	8	0.742	10	4.13%
8	Wells Fargo	0.334	5	4.07%	10	0.371	4	2.06%
9	Raymond James	0.200	1	2.44%	23	0.025	1	0.14%
10	Credit Suisse	0.184	1	2.24%	9	0.497	5	2.77%
10	UBS	0.184	1	2.24%	6	0.953	6	5.30%
	Total	8.211	26	17.973	52
	Average size:	0.316	0.346
Global, year to date
					2011 Comparables
	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Goldman Sachs	2.413	8	13.62%	1	4.721	16	13.36%
2	Bank of America	2.278	12	12.86%	6	2.002	14	5.67%
3	JPMorgan	1.896	14	10.70%	3	4.126	29	11.68%
4	Morgan Stanley	1.638	11	9.25%	5	2.534	12	7.17%
5	Deutsche Bank	1.391	13	7.85%	11	0.925	11	2.62%
6	Citigroup	1.052	8	5.94%	2	4.146	17	11.73%
7	Barclays	0.736	6	4.15%	7	1.297	10	3.67%
8	RBC	0.693	10	3.91%	15	0.613	10	1.74%
9	UBS	0.512	5	2.89%	9	1.174	8	3.32%
10	Credit Suisse	0.369	2	2.08%	8	1.193	10	3.38%
	Total	17.716	83	35.331	117
	Average size:	0.213	0.302
U.S. market, May
					2011 Comparables
	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	JPMorgan	0.695	5	28.72%	1	1.070	5	40.37%
2	Bank of America	0.570	1	23.56%	3	0.505	2	19.06%
3	Deutsche Bank	0.323	2	13.37%	9	0.040	1	1.51%
4	Credit Suisse	0.184	1	7.60%	5	0.125	1	4.72%
4	Morgan Stanley	0.184	1	7.60%	6	0.081	1	3.04%
4	UBS	0.184	1	7.60%
7	Citigroup	0.113	1	4.65%	8	0.040	1	1.51%
8	Goldman Sachs	0.075	1	3.10%	2	0.600	3	22.64%
9	RBC	0.073	1	3.03%
10	Citizens Capital	0.019	1	0.78%
	Total	2.419	7	2.651	10
	Average size:	0.346	0.265
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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