• U.S. convertibles issuance reaches $10.76 billion for year to date
• June U.S. convertibles issuance totals $2.54 billion in 10 deals
By Rebecca Melvin
New York, June 29 - Bank of America Merrill Lynch remained the top underwriter of convertible debt for the year to date through June, having brought $2.22 billion in 11 deals, or 20.6% of the total, according to Prospect News data.
J.P. Morgan Securities LLC was No. 2, having brought $1.96 billion in 14 deals, for 18.3% of the total for the year to date.
Total U.S. new issuance for 2012 so far is $10.76 billion in 37 deals, which is about half of the $19.57 billion in 59 deals for the same period of 2011 in the U.S. market.
For the second quarter though, issuance was up, with $7.23 billion in 25 deals brought during the second quarter of 2012, compared to $5.56 billion in 22 for the second quarter of 2011.
And for June alone, there was $2.54 billion in new issuance in 10 new deals, which was higher compared to $1.6 billion in seven deals brought in June 2011.
Goldman Sachs & Co. was the top underwriter of convertible securities in June, having brought a piece of the $1 billion United Technologies Corp. equity units deal as well as acting as sole bookrunner of Royal Gold Inc.'s $325 million of seven-year convertible notes, or accounting for $590 million of new issuance in two deals for 23.2% of the total.
Citigroup Global Markets Inc. was the No. 2 underwriter of convertibles, having brought $383 million in issuance in four deals, for 15% of the total for June.
Citi was joint books with JPMorgan and Bank of America Merrill Lynch for Medicines Co.'s $225 million of five-year convertible senior notes that priced at the beginning of the month, as well as NorthStar Realty Finance Corp.'s $75 million of 8.875% exchangeable notes.
Goldman remained the No. 1 underwriter of convertibles in the global market, bringing $3 billion in 10 deals for 14% of the total for the year to date.
Year-to-date volume of global convertible securities was $21.23 billion in 102 deals for the year to date, which was down compared to $39.13 billion in 140 deals for the same period in 2011.
Among June's notable U.S. deals, United Technologies priced $1 billion of equity units at $50 par each after the market close Tuesday at a distribution rate of 7.5% and an initial conversion premium of 32.5%. The registered, off-the-shelf deal came at the rich end of talk, which was for a distribution rate of 7.5% to 8% and a premium of 27.5% to 32.5%. There is a $100 million greenshoe for the deal, which was sold via joint bookrunners JPMorgan, Bank of America Merrill Lynch, Citigroup, Goldman Sachs and HSBC Securities (USA) Inc.
In addition, Affymetrix Inc. priced $105 million of seven-year senior convertible notes to yield 4% with an initial conversion premium of 25%.The registered offering has a $10 million greenshoe.
Pricing came at the cheap end of revised talk for the coupon, which was 3.75% to 4%, and at the revised price point for the premium. Originally, price talk was for a lower coupon of 3.25% to 3.75% and a higher premium of 27.5% to 32.5%.
Joint bookrunners were Citigroup and Morgan Stanley, with Bank of America Merrill Lynch Inc. and Robert W. Baird & Co. Inc. acting as the co-managers.
U.S. market, year to date
2011 Comparables
| Underwriter | Amount | No. | Share | Rank | Amount | No. | Share
|
| 1 | Bank of America | 2.219 | 11 | 20.62% | 4 | 1.994 | 15 | 10.19%
|
| 2 | JPMorgan | 1.964 | 14 | 18.25% | 2 | 3.568 | 26 | 18.23%
|
| 3 | Goldman Sachs | 1.787 | 5 | 16.61% | 1 | 3.728 | 14 | 19.05%
|
| 4 | Morgan Stanley | 1.045 | 8 | 9.71% | 5 | 1.261 | 9 | 6.44%
|
| 5 | Citigroup | 0.945 | 8 | 8.78% | 3 | 3.490 | 14 | 17.84%
|
| 6 | Barclays | 0.443 | 4 | 4.12% | 7 | 0.867 | 7 | 4.43%
|
| 7 | Deutsche Bank | 0.418 | 4 | 3.89% | 8 | 0.780 | 11 | 3.99%
|
| 8 | ABG Sundal Collier | 0.400 | 1 | 3.72% |
|
| 9 | Wells Fargo | 0.352 | 6 | 3.28% | 10 | 0.409 | 5 | 2.09%
|
| 10 | UBS | 0.242 | 3 | 2.25% | 6 | 0.953 | 6 | 4.87%
|
| Total | 10.761 | 37 | 19.570 | 59 |
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| Average size: | 0.291 | 0.332 |
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| Global, year to date |
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| | | | | 2011 Comparables |
|
| Underwriter | Amount | No. | Share | Rank | Amount | No. | Share
|
| 1 | Goldman Sachs | 3.003 | 10 | 14.15% | 1 | 5.068 | 19 | 12.95%
|
| 2 | Bank of America | 2.633 | 15 | 12.40% | 6 | 2.347 | 17 | 6.00%
|
| 3 | JPMorgan | 2.208 | 16 | 10.40% | 2 | 4.920 | 35 | 12.57%
|
| 4 | Morgan Stanley | 1.690 | 12 | 7.96% | 5 | 2.688 | 14 | 6.87%
|
| 5 | Citigroup | 1.479 | 13 | 6.97% | 3 | 4.146 | 17 | 10.60%
|
| 6 | Deutsche Bank | 1.410 | 14 | 6.64% | 10 | 1.191 | 14 | 3.04%
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| 7 | Barclays | 0.736 | 6 | 3.47% | 9 | 1.297 | 10 | 3.31%
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| 8 | RBC | 0.699 | 11 | 3.29% | 13 | 0.757 | 12 | 1.93%
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| 9 | UBS | 0.571 | 7 | 2.69% | 8 | 1.333 | 10 | 3.41%
|
| 10 | ABG Sundal Collier | 0.483 | 2 | 2.28% | 34 | 0.125 | 1 | 0.32%
|
| Total | 21.230 | 102 | 39.126 | 140 |
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| Average size: | 0.208 | 0.279 |
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| U.S. market, second quarter |
|
| | | | | 2011 Comparables |
|
| Underwriter | Amount | No. | Share | Rank | Amount | No. | Share
|
| 1 | JPMorgan | 1.656 | 10 | 22.92% | 1 | 1.728 | 12 | 31.09%
|
| 2 | Bank of America | 1.107 | 5 | 15.32% | 2 | 1.046 | 6 | 18.82%
|
| 3 | Morgan Stanley | 0.961 | 6 | 13.30% | 5 | 0.284 | 4 | 5.11%
|
| 4 | Goldman Sachs | 0.792 | 4 | 10.96% | 3 | 0.861 | 5 | 15.50%
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| 5 | Citigroup | 0.645 | 6 | 8.93% | 6 | 0.235 | 2 | 4.24%
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| 6 | Deutsche Bank | 0.418 | 4 | 5.79% | 11 | 0.088 | 3 | 1.59%
|
| 7 | ABG Sundal Collier | 0.400 | 1 | 5.54% |
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| 8 | Wells Fargo | 0.245 | 4 | 3.39% | 10 | 0.088 | 2 | 1.59%
|
| 9 | UBS | 0.242 | 3 | 3.35% | 8 | 0.196 | 1 | 3.52%
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| 10 | HSBC | 0.220 | 1 | 3.04% |
|
| Total | 7.225 | 25 | 5.557 | 22 |
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| Average size: | 0.289 | 0.253 |
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| U.S. market, June |
|
| | | | | 2011 Comparables |
|
| Underwriter | Amount | No. | Share | Rank | Amount | No. | Share
|
| 1 | Goldman Sachs | 0.590 | 2 | 23.20% | 3 | 0.261 | 2 | 16.35%
|
| 2 | ABG Sundal Collier | 0.400 | 1 | 15.73% |
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| 3 | Citigroup | 0.383 | 4 | 15.04% |
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| 4 | Bank of America | 0.312 | 2 | 12.25% | 2 | 0.345 | 3 | 21.59%
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| 5 | JPMorgan | 0.312 | 2 | 12.25% | 1 | 0.403 | 4 | 25.19%
|
| 6 | HSBC | 0.220 | 1 | 8.65% |
|
| 7 | TD | 0.130 | 1 | 5.11% |
|
| 8 | UBS | 0.058 | 2 | 2.30% |
|
| 9 | Morgan Stanley | 0.052 | 1 | 2.06% | 5 | 0.153 | 2 | 9.60%
|
| 10 | Raymond James | 0.032 | 1 | 1.26% |
|
| Total | 2.543 | 10 | 1.598 | 7 |
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| Average size: | 0.254 | 0.228 |
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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 (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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