• U.S. convertibles issuance $11.24 billion in 32 deals year to date
• March U.S. convertibles issuance totals $3.99 billion in 15 deals
By Rebecca Melvin
New York, March 31 - Morgan Stanley & Co. LLC remained top convertible bond underwriter for the year to date through the end of March, having brought $2.51 billion in 13 deals, accounting for 22% of the total for the year so far. That was up from Morgan Stanley's $1.21 billion in seven deals for the same period of 2013, according to data compiled by Prospect News.
J.P. Morgan Securities LLC was the No. 2 underwriter of convertibles having brought $1.38 billion in 10 deals, for 12% of the total, followed by Goldman Sachs & Co. at No. 3, which brought $1.33 billion in seven deals for 11.9% of the total.
JPMorgan's year-to-date tally for 2014 was slightly behind its total for the same period of 2013, when it brought $1.53 billion in 13 deals. Goldman is lagging its 2013 tally of $2.1 billion in 11 deals.
Following the top three underwriters for the year so far are Deutsche Bank Securities Inc., BofA Merrill Lynch and Credit Suisse Securities (USA) LLC, with $1.13 billion in seven deals, $1.04 billion in nine deals and $954 million in seven deals, respectively.
Jefferies & Co., Citigroup Global Markets Inc. and Barclays round out the top nine underwriters for the year to date.
Total U.S. convertibles issuance for the year to date was $11.24 billion in 32 deals, which is nearly on par with the same period of last year, when $11.58 billion in 35 deals priced.
Globally, there was $20.51 billion of new paper in 68 deals for 2014 so far, compared to $27.24 billion in 75 deals for the same period of 2013. Lead underwriter on that list was Morgan Stanley with $2.63 billion in 14 deals, for 13% of the total. JPMorgan was No. 2 and Goldman Sachs was No. 3 as top global underwriters of convertible debt for the year so far.
For March alone in 2014, there were $3.99 billion in 15 U.S. deals, compared to $3.52 billion in 12 deals for March 2013.
This past month Austin, Texas-based vacation rental site HomeAway Inc. priced $350 million of five-year convertible senior notes at par to yield 0.125% with an initial conversion premium of 35%. That deal came at the rich end of 0% to 0.5% coupon talk and beyond the rich end of 27.5% to 32.5% premium talk via joint bookrunners JPMorgan and Deutsche Bank.
Guangzhou, China-based online discount retailer Vipshop Holdings Ltd. priced an upsized $550 million offering of five-year convertible senior notes to yield 1.5% with a 40% initial conversion premium, and YY Inc., a Guangzhou, China-based online social platform, priced $400 million of five-year convertible senior notes after the market close Tuesday at par to yield 2.25% with an initial conversion premium of 35%, according to a syndicate source.
Meanwhile, Jarden Corp., the Rye, N.Y.-based consumer products company, priced $600 million of 20-year convertible senior notes on March 11 to yield 1.125% with an initial conversion premium of 22.5%. That deal came at the midpoint of talk via bookrunners Citigroup, Deutsche Bank and Morgan Stanley.
U.S. market, year to date
2013 Comparables
| Underwriter | Amount | No. | Share | Rank | Amount | No. | Share
|
| 1 | Morgan Stanley | 2.508 | 13 | 22.32% | 4 | 1.210 | 7 | 10.45%
|
| 2 | JPMorgan | 1.380 | 10 | 12.28% | 3 | 1.529 | 13 | 13.20%
|
| 3 | Goldman Sachs | 1.334 | 7 | 11.87% | 2 | 2.082 | 11 | 17.98%
|
| 4 | Deutsche Bank | 1.132 | 7 | 10.07% | 5 | 0.923 | 5 | 7.97%
|
| 5 | Bank of America | 1.040 | 9 | 9.26% | 1 | 2.411 | 11 | 20.82%
|
| 6 | Credit Suisse | 0.954 | 7 | 8.49% | 9 | 0.399 | 5 | 3.45%
|
| 7 | Jefferies | 0.681 | 3 | 6.06% | 10 | 0.336 | 3 | 2.90%
|
| 8 | Citigroup | 0.663 | 5 | 5.90% | 7 | 0.705 | 7 | 6.09%
|
| 9 | Barclays | 0.348 | 3 | 3.10% | 6 | 0.749 | 5 | 6.47%
|
| 10 | HSBC | 0.287 | 1 | 2.56% |
|
| Total | 11.238 | 32 | 11.579 | 35 |
|
| Average size: | 0.351 | 0.331 |
|
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| Global, year to date |
|
| | | | | 2013 Comparables |
|
| Underwriter | Amount | No. | Share | Rank | Amount | No. | Share
|
| 1 | Morgan Stanley | 2.629 | 14 | 12.82% | 7 | 1.625 | 8 | 5.97%
|
| 2 | JPMorgan | 2.178 | 16 | 10.62% | 4 | 2.638 | 20 | 9.68%
|
| 3 | Goldman Sachs | 1.829 | 9 | 8.92% | 5 | 2.376 | 15 | 8.72%
|
| 4 | Bank of America | 1.666 | 11 | 8.13% | 3 | 2.715 | 14 | 9.97%
|
| 5 | Deutsche Bank | 1.362 | 9 | 6.64% | 2 | 2.782 | 12 | 10.21%
|
| 6 | Citigroup | 1.221 | 7 | 5.95% | 9 | 1.180 | 11 | 4.33%
|
| 7 | Credit Suisse | 1.186 | 8 | 5.78% | 11 | 0.783 | 7 | 2.87%
|
| 8 | HSBC | 1.113 | 5 | 5.43% | 27 | 0.154 | 3 | 0.56%
|
| 9 | SG | 0.743 | 5 | 3.62% | 16 | 0.334 | 1 | 1.23%
|
| 10 | Barclays | 0.692 | 5 | 3.37% | 10 | 1.165 | 6 | 4.28%
|
| Total | 20.509 | 68 | 27.244 | 75 |
|
| Average size: | 0.302 | 0.363 |
|
|
|
| U.S. market, March |
|
| | | | | 2013 Comparables |
|
| Underwriter | Amount | No. | Share | Rank | Amount | No. | Share
|
| 1 | JPMorgan | 0.605 | 5 | 15.16% | 5 | 0.259 | 4 | 7.38%
|
| 2 | Deutsche Bank | 0.575 | 4 | 14.42% |
|
| 3 | Goldman Sachs | 0.497 | 3 | 12.48% | 4 | 0.529 | 2 | 15.05%
|
| 4 | Bank of America | 0.484 | 5 | 12.14% | 1 | 0.876 | 4 | 24.90%
|
| 5 | Morgan Stanley | 0.415 | 4 | 10.40% | 2 | 0.654 | 2 | 18.60%
|
| 6 | Credit Suisse | 0.409 | 3 | 10.25% | 8 | 0.133 | 1 | 3.79%
|
| 7 | Barclays | 0.348 | 3 | 8.74% | 3 | 0.546 | 3 | 15.52%
|
| 8 | Jefferies | 0.259 | 1 | 6.49% | 9 | 0.101 | 1 | 2.86%
|
| 9 | Citigroup | 0.213 | 3 | 5.35% | 7 | 0.162 | 2 | 4.61%
|
| 10 | Cowen | 0.075 | 1 | 1.87% |
|
| 10 | Nomura | 0.075 | 1 | 1.87% |
|
| Total | 3.987 | 15 | 3.516 | 12 |
|
| Average size: | 0.266 | 0.293 |
|
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|
| Global, March |
|
| | | | | 2013 Comparables |
|
| Underwriter | Amount | No. | Share | Rank | Amount | No. | Share
|
| 1 | JPMorgan | 0.805 | 6 | 11.62% | 5 | 0.866 | 8 | 9.06%
|
| 2 | Credit Suisse | 0.641 | 4 | 9.26% | 9 | 0.333 | 2 | 3.49%
|
| 3 | Deutsche Bank | 0.575 | 4 | 8.30% |
|
| 4 | Goldman Sachs | 0.497 | 3 | 7.18% | 8 | 0.529 | 2 | 5.53%
|
| 5 | Bank of America | 0.484 | 5 | 6.99% | 4 | 0.961 | 5 | 10.05%
|
| 6 | Morgan Stanley | 0.415 | 4 | 5.99% | 6 | 0.654 | 2 | 6.84%
|
| 7 | UniCredit Bank | 0.373 | 2 | 5.39% |
|
| 8 | Nomura | 0.368 | 2 | 5.31% |
|
| 9 | Barclays | 0.348 | 3 | 5.03% | 7 | 0.546 | 3 | 5.71%
|
| 10 | Jefferies | 0.259 | 1 | 3.74% | 14 | 0.101 | 1 | 1.05%
|
| Total | 6.925 | 24 | 9.564 | 26 |
|
| Average size: | 0.289 | 0.368 |
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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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