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

• U.S. convertibles issuance reaches $12.93 billion for year to date

• August U.S. convertibles issuance $1.71 billion in seven deals

By Rebecca Melvin

New York, Aug. 31 - J.P. Morgan Securities LLC was top underwriter of convertible debt for the year to date through August, bringing $2.53 billion in 18 deals, or 19.6% of total issuance, for the first eight months of 2012.

Bank of America Merrill Lynch was the No. 2 underwriter of convertible debt with $2.33 billion in 13 deals for 18% of total volume; while Goldman Sachs & Co. was No. 3 with $2.17 billion in eight deals for 16.8% of the total, according to Prospect News data.

Total volume for the first eight months of 2012 is slightly more than half of the pace for issuance in the same period of 2011, with $12.93 billion of new issuance in 46 deals, compared to $22.77 billion in 72 deals for the same period of 2011.

Goldman Sachs was the top underwriter for global new issuance with $3.38 billion in new issuance in 13 deals across the world, accounting for 13% of volume, followed on a worldwide basis by JPMorgan, which was the underwriter for $3.10 billion in 22 deals, accounting for 11.7% of volume.

Total global issuance has also dropped off this year to $26.58 billion in 125 deals for the first eight months of 2012, compared to $45.49 billion in 170 deals for the same period of 2011.

For August alone, U.S. issuance picked up significantly from the practically moribund issuance market in July. For August, there were seven U.S. deals (compared to two deals in July) for $1.71 billion, compared to $201 million of new issuance for July alone.

JPMorgan and Goldman Sachs were the top two underwriters of convertible debt for August, bringing $501 million in three deals, and $351 million in two deals, respectively. Together they accounted for about 50% of the market. Barclays was third, bringing $351 million in two deals, for 20.5% of the total.

For August 2011, there were no deals.

But notable deals this past month included the very well-received Wright Medical Group Inc. Wright's upsized $260 million of cash convertible senior notes due 2017 were priced to yield 2% with a 27.5% initial conversion premium.

The Wright deal, which priced Aug. 21, was brought via JPMorgan as bookrunner, with SunTrust Robinson Humphrey Inc. and US Bancorp acting as co-managers.

About $130 million of the proceeds will be used to pay an outstanding term loan under Wright Medical's senior credit facility.

Trader said the market needs more deals like this one. The paper priced well and the underlying shares subsequently rose, lifting the bonds.

Before Wright there was MolyCorp Inc., which priced an upsized $360 million issue of five-year convertible senior notes at par to yield 6% with an initial conversion premium of 20%.That issue opened up this past week in tandem with higher shares and on positive fundamental news for the company.

The week of Aug. 6-10 was busy with five new deals including Hornbeck Offshore Services Inc.'s $300 million of 1.5% convertibles with a 37.5% premium; Isis Pharmaceuticals Inc.'s $201.24 million of 2.75% seven year convertibles; Exelixis Inc.'s $287.5 million of 4.25% convertibles; and Prospect Capital Corp.'s $200 million of 5.75% convertibles that were reoffered at 98.

U.S. market, year to date

2011 Comparables

	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	JPMorgan	2.527	18	19.55%	1	4.054	29	17.80%
2	Bank of America	2.325	13	17.99%	5	2.284	18	10.03%
3	Goldman Sachs	2.166	8	16.76%	2	3.978	16	17.47%
4	Morgan Stanley	1.252	9	9.69%	4	2.442	15	10.72%
5	Citigroup	1.008	9	7.80%	3	3.720	16	16.34%
6	Barclays	0.739	6	5.72%	7	0.954	8	4.19%
7	Wells Fargo	0.496	8	3.83%	10	0.409	5	1.80%
8	Credit Suisse	0.483	4	3.73%	9	0.712	7	3.13%
9	Deutsche Bank	0.447	5	3.46%	8	0.833	12	3.66%
10	ABG Sundal Collier	0.400	1	3.09%
	Total	12.925	46	22.773	72
	Average size:	0.281	0.316
Global, year to date
					2011 Comparables
	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Goldman Sachs	3.383	13	12.73%	2	5.527	22	12.15%
2	JPMorgan	3.096	22	11.65%	1	5.618	40	12.35%
3	Credit Suisse	2.770	8	10.42%	8	1.571	15	3.45%
4	Bank of America	2.740	17	10.31%	6	2.701	21	5.94%
5	Morgan Stanley	1.897	13	7.14%	5	3.868	20	8.50%
6	Deutsche Bank	1.635	17	6.15%	10	1.307	16	2.87%
7	Citigroup	1.542	14	5.80%	3	4.438	20	9.76%
8	Barclays	1.207	10	4.54%	9	1.562	13	3.43%
9	RBC	0.715	11	2.69%	14	0.903	17	1.98%
10	UBS	0.582	8	2.19%	7	1.853	13	4.07%
	Total	26.579	125	45.494	170
	Average size:	0.213	0.268
U.S. market, August
					2011 Comparables
	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	JPMorgan	0.501	3	29.25%
2	Goldman Sachs	0.351	2	20.49%
3	Barclays	0.296	2	17.30%
4	Credit Suisse	0.207	1	12.10%
4	Morgan Stanley	0.207	1	12.10%
6	Wells Fargo	0.100	1	5.84%
7	Lazard	0.050	1	2.92%
	Total	1.711	7	0.000	0
	Average size:	0.244
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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