• U.S. convertibles issuance totals $805 million in four deals for January
By Rebecca Melvin
New York, Jan. 31 - Credit Suisse Securities (USA) LLC was on top of the convertibles issuance league tables for January, bringing $207 million in two deals, or 26% of total new issuance for the month, according to data compiled by Prospect News.
BofA Merrill Lynch was the No. 2 U.S. convertibles underwriter for January with $182 million in two deals, or 23% of the total.
Piper Jaffray & Co. and J.P. Morgan Securities LLC were third and fourth with $175 million in one deal for Piper, accounting for 21% of total issuance, while JPMorgan brought $125 million in one deal.
Deutsche Bank Securities Inc. and Morgan Stanley & Co. LLC rounded out the remaining top underwriters of convertible debt in the U.S. for the month, with $58 million apiece.
Total issuance for January was a mere $805 million in four deals, which pales in comparison to January 2013 when $4.43 billion in 12 deals were priced.
Market players say a flurry of new issuance at the end of 2013 expended the pipeline temporarily, but they expect issuance to resume at full throttle in February.
Global new issuance for January was more robust compared to the United States but still light compared to the same period last year. For this past month, total global issuance reached $4.79 billion in 17 deals, compared to $11.51 billion in 27 deals for the same period last year.
Lead underwriter globally was HSBC, accounting for $594 million of issuance in three deals for 12.4%. Citigroup Global Markets Inc. was the No. 2 global underwriter with $558 million in two deals, accounting for 11.6% of global issuance.
Among notable U.S. deals this past month were Fluidigm Corp.'s $175 million of 2.7% 20-year convertible senior notes. Those notes flew higher upon release for secondary market dealings to about 108 amid an updraft in the shares. On a dollar-neutral, or hedged, basis the new notes expanded about 1.5 points to 2 points, assuming a delta of about 70%.
The other notable U.S. deal was JinkoSolar Holding Co. Ltd.'s upsized $130 million of five-year convertible notes to yield 4% with an initial conversion premium of 30%. The Rule 144A deal was initially talked at $100 million in size. Pricing came at the midpoint of talked terms.
Fluidigm was underwritten by Piper Jaffray, and JinkoSolar was sold via Credit Suisse.
U.S. market, year to date
2013 Comparables
| Underwriter | Amount | No. | Share | Rank | Amount | No. | Share
|
| 1 | Credit Suisse | 0.207 | 2 | 25.78% | 12 | 0.058 | 1 | 1.30%
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| 2 | Bank of America | 0.182 | 2 | 22.67% | 2 | 0.907 | 3 | 20.49%
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| 3 | Piper Jaffray | 0.175 | 1 | 21.74% |
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| 4 | JPMorgan | 0.125 | 1 | 15.53% | 5 | 0.310 | 3 | 7.01%
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| 5 | Deutsche Bank | 0.058 | 1 | 7.14% | 3 | 0.795 | 3 | 17.95%
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| 5 | Morgan Stanley | 0.058 | 1 | 7.14% | 10 | 0.075 | 1 | 1.69%
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| Total | 0.805 | 4 | 4.429 | 12 |
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| Average size: | 0.201 | 0.369 |
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| Global, year to date |
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| | | | | 2013 Comparables |
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| Underwriter | Amount | No. | Share | Rank | Amount | No. | Share
|
| 1 | HSBC | 0.594 | 3 | 12.38% | 22 | 0.051 | 1 | 0.44%
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| 2 | Citigroup | 0.558 | 2 | 11.63% | 8 | 0.552 | 5 | 4.79%
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| 3 | BNP | 0.402 | 3 | 8.38% | 6 | 0.617 | 4 | 5.36%
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| 4 | SG | 0.390 | 3 | 8.14% | 13 | 0.334 | 1 | 2.91%
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| 5 | Goldman Sachs | 0.375 | 1 | 7.82% | 2 | 1.191 | 7 | 10.35%
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| 6 | Barclays | 0.343 | 2 | 7.16% | 10 | 0.476 | 2 | 4.13%
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| 7 | Bank of America | 0.328 | 3 | 6.84% | 3 | 1.126 | 5 | 9.78%
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| 8 | JPMorgan | 0.325 | 3 | 6.78% | 5 | 0.618 | 5 | 5.37%
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| 9 | Deutsche Bank | 0.218 | 2 | 4.55% | 1 | 2.459 | 9 | 21.36%
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| 10 | Credit Suisse | 0.207 | 2 | 4.33% | 20 | 0.058 | 1 | 0.50%
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| Total | 4.794 | 17 | 11.512 | 27 |
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| Average size: | 0.282 | 0.426 |
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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.
• Preferred issues are included using the same criteria as for bonds.
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