Morgan Stanley top U.S. market convertibles underwriter year to date

• U.S. convertibles issuance $13.9 billion in 39 deals year to date

• April U.S. convertibles issuance totals $2.3 billion in seven deals

By Rebecca Melvin

New York, April 30 - Morgan Stanley & Co. LLC remained at the top of the convertible league tables for the year so far, having brought $2.65 billion in 14 deals, accounting for 19% of the total for 2014's first four months, according to data compiled by Prospect News.

That was up from Morgan Stanley's $1.41 billion in nine deals for the same period of 2013.

Goldman Sachs & Co. moved up to No. 2 underwriter of convertibles from the No. 3 slot, having brought $2.03 billion in nine deals for 15% of the total. J.P. Morgan Securities LLC was third on the convertibles league tables, having brought $1.84 billion in 12 deals, for 13% of the total.

Goldman's 2014 year-to-date tally was about even with the same period of 2013, which was for $2.18 billion in 13 deals.

Following the top three underwriters for the year so far are BofA Merrill Lynch, Deutsche Bank Securities Inc. and Credit Suisse Securities (USA) LLC, with $1.35 billion in 10 deals, $1.2 billion in seven deals and $1.03 billion in eight deals, respectively.

Jefferies & Co., Barclays, Citigroup Global Markets Inc. and RBC Capital Markets LLC round out the top 10 underwriters of convertibles for the year to date.

Total year-to-date U.S. convertibles issuance stands at $13.86 billion in 39 deals, which is close to the same period of last year, when $13.52 billion in 41 deals priced.

Globally, there was $26.61 billion of new convertible issuance in 94 deals for 2014 so far, compared to $31.66 billion in 89 deals for the same period of 2013. Lead underwriter on that list was Morgan Stanley with $3.02 billion in 17 deals, for 11% of the total. Goldman Sachs was No. 2 and JPMorgan was No. 3 as top global underwriters of convertible debt for the year so far.

But April alone in the global market was notably active, with $6.09 billion in 26 deals that were priced. That was well ahead of the same month last year when $4.42 billion in 14 deals priced in the global market.

For April alone in the United States, there were $2.30 billion in seven deals, compared to $1.94 billion in six deals for April 2013.

Notable deals

This past month's U.S. tally was bolstered by Citrix Systems Inc.'s $1.25 billion deal of five-year convertible senior notes. The Fort Lauderdale, Fla.-based cloud computing solutions company priced the notes at par to yield 0.5% with an initial conversion premium of 50% via joint bookrunners JPMorgan, Goldman Sachs, BofA Merrill Lynch and RBC Capital Markets LLC.

Also notable this past month was Prospect Capital Corp.'s $400 million of 4.75% six-year convertible senior notes. The New York-based venture capital and private equity firm priced the overnight deal via bookrunner Barclays at a discount to par of 97.75 and with an initial conversion premium of 15%.

Early in the month, 51job Inc., the Shanghai-based online recruiting service company, made a splash with a $150 million sale of five-year convertible notes that priced at par via JPMorgan and Credit Suisse Securities (USA) LLC with a 3.25% coupon and a 25% premium.

U.S. market, year to date

2013 Comparables

	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Morgan Stanley	2.645	14	19.09%	4	1.409	9	10.42%
2	Goldman Sachs	2.028	9	14.64%	2	2.183	13	16.15%
3	JPMorgan	1.842	12	13.30%	3	1.630	15	12.06%
4	Bank of America	1.353	10	9.76%	1	2.680	14	19.82%
5	Deutsche Bank	1.207	7	8.71%	7	0.923	5	6.83%
6	Credit Suisse	1.029	8	7.42%	8	0.668	8	4.94%
7	Jefferies	0.743	4	5.36%	10	0.381	4	2.82%
8	Barclays	0.739	4	5.34%	5	1.092	7	8.08%
9	Citigroup	0.663	5	4.79%	6	0.990	9	7.32%
10	RBC	0.549	3	3.96%	12	0.225	1	1.66%
	Total	13.855	39	13.519	41
	Average size:	0.355	0.330
Global, year to date
					2013 Comparables
	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Morgan Stanley	3.019	17	11.34%	6	2.115	11	6.68%
2	Goldman Sachs	2.783	12	10.46%	5	2.578	18	8.14%
3	JPMorgan	2.740	19	10.30%	4	2.739	22	8.65%
4	Bank of America	2.219	14	8.34%	2	2.984	17	9.42%
5	Deutsche Bank	1.685	11	6.33%	3	2.782	12	8.79%
6	Credit Suisse	1.650	12	6.20%	11	1.052	10	3.32%
7	Citigroup	1.221	7	4.59%	10	1.465	13	4.63%
8	Barclays	1.125	7	4.23%	9	1.508	8	4.76%
9	HSBC	1.113	5	4.18%	29	0.154	3	0.48%
10	SG	1.053	7	3.96%	16	0.334	1	1.06%
	Total	26.613	94	31.663	89
	Average size:	0.283	0.356
U.S. market, April
					2013 Comparables
	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Goldman Sachs	0.600	2	26.11%	8	0.101	2	5.22%
2	Barclays	0.391	1	17.02%	1	0.343	2	17.68%
3	JPMorgan	0.388	2	16.86%	9	0.101	2	5.22%
4	Bank of America	0.312	1	13.60%	3	0.269	3	13.85%
5	RBC	0.312	1	13.60%
6	Credit Suisse	0.075	1	3.26%	4	0.269	3	13.85%
7	Raymond James	0.062	1	2.68%
8	Morgan Stanley	0.062	1	2.68%	5	0.199	2	10.27%
9	Jefferies	0.062	1	2.68%	11	0.045	1	2.32%
10	Wedbush PacGrow	0.016	1	0.71%
	Total	2.298	7	1.940	6
	Average size:	0.328	0.323
Global, April
					2013 Comparables
	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Goldman Sachs	0.859	3	14.12%	7	0.201	3	4.55%
2	Bank of America	0.553	3	9.09%	5	0.269	3	6.08%
3	JPMorgan	0.488	3	8.01%	10	0.101	2	2.29%
4	Credit Suisse	0.464	4	7.62%	6	0.269	3	6.08%
5	Barclays	0.433	2	7.11%	2	0.343	2	7.76%
6	RBC	0.380	2	6.25%
7	Morgan Stanley	0.315	3	5.18%	1	0.490	3	11.08%
8	SG	0.310	2	5.10%
9	Deutsche Bank	0.248	2	4.08%
10	Macquarie	0.188	2	3.08%
	Total	6.085	26	4.419	14
	Average size:	0.234	0.316
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.

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