Goldman Sachs top U.S. market convertibles underwriter year to date

• U.S. convertibles issuance reaches $17.57 billion for year to date

• May U.S. convertibles issuance totals $4.05 billion in 12 deals

By Rebecca Melvin

New York, May 31 - Goldman Sachs & Co., switching places again with BofA Merrill Lynch, became the No. 1 ranking convertible bond underwriter for the first five months of the year, bringing $3.46 billion in 16 deals, for 20% of total new issuance for 2013 to date, according to data compiled by Prospect News.

BofA Merrill Lynch slipped back to No. 2 among convertibles underwriters for the year to date, with $2.86 billion in 17 deals, or 16% of the total.

J.P. Morgan Securities LLC took the third slot with $2.31 billion of new issuance in 21 deals for the year so far, accounting for 13% of the total, while Morgan Stanley & Co. LLC was fourth with $1.88 billion in new issuance in 14 deals, accounting for 11% of total issuance.

Deutsche Bank Securities Inc. lifted a few rungs, becoming the fifth ranking convertibles underwriter with $1.43 billion in nine deals, for 8% of the total, while Barclays and Citigroup Global Markets Inc. ranked sixth and seventh, with $1.27 billion and $1.17 billion in issuance, respectively.

Rounding out the top 10 underwriters of U.S. issuance were Credit Suisse Securities (USA) Inc., Credit Agricole CIB and Jefferies & Co.

In total, there was $17.57 billion in new issuance in 53 deals for the year to date, which was more than double the $8.30 billion in 27 deals for the first five months of 2012.

New issuance for May alone picked up significantly from April.

For May, there was $4.05 billion in issuance in 12 deals, compared to $1.88 billion in new issuance in six deals in the previous month, and it was significantly better than the same month a year ago when $2.47 billion in eight deals priced.

Goldman Sachs was the top underwriter of U.S. convertible debt in May, with $1.28 billion in three deals, accounting for 31.5% of total issuance. JPMorgan was No. 2 with $677 million in six deals, or 17% of the total, and Deutsche Bank was third with $505 million in four deals for 12.5% of the total. Morgan Stanley was fourth with $470 million in new issuance in five deals for 11.5% of the total. And from there, issuance volumes dropped off with Credit Suisse bringing just $199 million in two deals, for 5% of the total.

Globally, there was $39.36 billion of new issuance in 112 deals for the year to date, which was more than double from $17.89 billion in new issuance in 84 deals for the first five months of 2012.

Lead underwriter globally was Goldman Sachs again, accounting for $3.93 billion with a total of 22 deals for a 10% share. BofA Merrill Lynch was the No. 2 global underwriter with $3.83 billion in 24 deals, accounting for another 10% of global issuance. The rankings were tight. UBS AG, which was the top global underwriter of convertible debt for the year to date through April, dropped to the fifth rung, with $3.46 billion in 11 deals for 9% of the total.

May issuance was heaviest in the middle of the month and at the end.

Among notable U.S. deals in the past month were:

• Tesla Motors Inc.'s upsized $600 million - with the exercised greenshoe it was $660 million - of five-year convertible bonds priced to yield 1.5%, with an initial conversion premium of 35%;

• Concur Technologies Inc.'s upsized $425 million of 0.5% convertibles with a 32.5% initial conversion premium; and

• Priceline.com Inc.'s $1 billion deal of 0.35% convertibles that had a 66% initial conversion premium. But deal size and pricing success didn't go hand in hand. Priceline's deal was sold at a discount to par at 98 and traded down to a 96 handle on its first-day trading.

One of the month's most successful deals was FXCM Inc.'s $150 million of 2.25% convertibles, which traded up 2 points on both an outright and hedged basis after the New York-based foreign exchange trading firm priced the five-year convertible senior notes at the rich end of talk.

U.S. market, year to date

2012 Comparables

	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Goldman Sachs	3.458	16	19.69%	3	1.197	3	14.43%
2	Bank of America	2.855	17	16.25%	1	1.907	9	22.99%
3	JPMorgan	2.307	21	13.13%	2	1.652	12	19.91%
4	Morgan Stanley	1.879	14	10.70%	4	0.993	7	11.97%
5	Deutsche Bank	1.428	9	8.13%	7	0.400	3	4.82%
6	Barclays	1.270	9	7.23%	6	0.443	4	5.34%
7	Citigroup	1.170	12	6.66%	5	0.596	4	7.19%
8	Credit Suisse	0.867	10	4.94%	10	0.184	1	2.22%
9	Credit Agricole	0.662	2	3.77%
10	Jefferies	0.381	4	2.17%
	Total	17.566	53	8.295	27
	Average size:	0.331	0.307
U.S. market, May
					2012 Comparables
	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Goldman Sachs	1.275	3	31.50%	8	0.075	1	3.04%
2	JPMorgan	0.677	6	16.73%	1	0.695	5	28.13%
3	Deutsche Bank	0.505	4	12.47%	3	0.323	2	13.10%
4	Morgan Stanley	0.470	5	11.62%	5	0.184	1	7.44%
5	Credit Suisse	0.199	2	4.92%	6	0.184	1	7.44%
6	Citigroup	0.180	3	4.46%	7	0.113	1	4.56%
7	Barclays	0.178	2	4.39%
8	Bank of America	0.175	3	4.33%	2	0.570	1	23.09%
9	RBS	0.163	2	4.01%
10	Credit Agricole	0.100	1	2.47%
	Total	4.048	12	2.469	8
	Average size:	0.337	0.309
Global, year to date
					2012 Comparables
	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Goldman Sachs	3.926	22	9.97%	1	2.413	8	13.50%
2	Bank of America	3.834	24	9.74%	2	2.278	12	12.74%
3	JPMorgan	3.707	30	9.42%	3	1.896	14	10.61%
4	Deutsche Bank	3.563	18	9.05%	5	1.391	13	7.78%
5	UBS	3.456	11	8.78%	9	0.512	5	2.86%
6	Morgan Stanley	2.686	17	6.82%	4	1.638	11	9.16%
7	Credit Suisse	1.971	14	5.01%	11	0.369	2	2.06%
8	Barclays	1.903	12	4.84%	7	0.736	6	4.12%
9	BNP	1.900	11	4.83%	35	0.071	1	0.40%
10	Citigroup	1.645	16	4.18%	6	1.086	8	6.07%
	Total	39.361	112	17.878	84
	Average size:	0.351	0.213
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.

• Preferred issues are included using the same criteria as for bonds.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.