Citigroup becomes top convertibles underwriter year to date with massive deal

• Convertibles issuance totals $46.03 billion year to date

• Convertibles issuance (including synthetics) totals $54.38 billion year to date

• Convertible issuance year to date more than double year-on-year

By Kenneth Lim

Boston, Sept. 29 - Citigroup leapfrogged over Merrill Lynch to lead the convertible league tables as the primary market woke up from its summer slump. Citigroup also moved ahead of the pack when investment bank exchangeables were counted, according to data compiled by Prospect News.

September saw convertibles worth $5.62 billion brought to market, more than double the $1.79 billion issued in the same month a year ago and significantly higher than the $2.94 billion in August. Including synthetics, September issuance reached $5.86 billion, about 71.5% better than the $3.28 billion in the year-ago period.

Most of the difference in issuance volume came from the massive $2.5 billion offering of 30-year convertible senior debentures by U.S. Bancorp. Citigroup was the sole bookrunner for that deal, which helps account for its climb to the top of the tables.

The impact of U.S. Bancorp's deal is apparent in other comparables. For the third quarter, total deals raised $10.19 billion, almost $2 billion more than the $8.26 billion in the same period a year ago. With synthetics, third-quarter proceeds reached $11.99 billion, from $10.56 billion a year ago.

New deals, excluding investment bank exchangeables, have raised $46.025 billion so far this year, more than double the $22.43 billion at the same time in 2005. Counting investment bank exchangeables brings the year-to-date total to $54.38 billion, still slightly more than double the $27.03 billion as at end-September 2005.

Citigroup has now brought $8.56 billion worth of convertibles to the market, about $1.31 billion more than closest peer Merrill Lynch. Including synthetics, Citigroup was behind $9.61 billion of convertibles, $1.83 billion more than the current No. 2, Morgan Stanley.

The Prospect News figures cover dollar-denominated deals offered in the United States as registered transactions or under Rule 144A. They exclude deals issued by investment banks linked to a single stock - except where noted.

Year to date, excluding investment bank exchangeables

2005 Comparables

	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Citigroup	8.563	23	18.60%	4	2.267	11	10.10%
2	Merrill Lynch	7.251	30	15.75%	5	2.079	14	9.27%
3	Morgan Stanley	5.595	18	12.16%	2	2.486	15	11.08%
4	Goldman Sachs	4.089	15	8.88%	3	2.379	13	10.60%
5	Banc of America	4.084	26	8.87%	6	2.018	14	9.00%
6	JPMorgan	3.904	21	8.48%	8	1.575	14	7.02%
7	UBS	3.534	15	7.68%	10	0.973	10	4.34%
8	Lehman	3.448	9	7.49%	1	3.895	12	17.36%
9	Deutsche Bank	1.581	8	3.44%	7	2.010	9	8.96%
10	Credit Suisse	1.492	13	3.24%	9	1.536	9	6.85%
	Total	46.025	101	22.436	84
	Average size:	0.456	0.267
Year to date, including investment bank exchangeables
					2005 Comparables
	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Citigroup	9.611	48	17.67%	2	3.985	34	14.75%
2	Morgan Stanley	7.778	81	14.30%	3	3.266	37	12.09%
3	Merrill Lynch	7.306	33	13.43%	5	2.359	17	8.73%
4	UBS	5.884	17	10.82%	10	0.973	10	3.60%
5	Goldman Sachs	4.686	35	8.62%	4	3.116	45	11.53%
6	Lehman	4.617	35	8.49%	1	4.499	27	16.65%
7	Banc of America	4.084	26	7.51%	6	2.018	14	7.47%
8	JPMorgan	3.930	41	7.23%	8	1.575	14	5.83%
9	Deutsche Bank	1.599	18	2.94%	7	2.011	10	7.44%
10	Credit Suisse	1.541	60	2.83%	9	1.541	14	5.70%
	Total	54.383	612	27.028	354
	Average size:	0.089	0.076
Q3, excluding investment bank exchangeables
					2005 Comparables
	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Citigroup	3.202	6	31.43%	2	0.874	5	10.58%
2	Merrill Lynch	1.284	8	12.61%	4	0.628	5	7.61%
3	Goldman Sachs	1.126	4	11.05%	5	0.620	5	7.51%
4	Banc of America	1.101	8	10.81%	7	0.610	7	7.39%
5	JPMorgan	0.973	8	9.56%	3	0.792	6	9.60%
6	Credit Suisse	0.529	6	5.19%	6	0.618	3	7.49%
7	Deutsche Bank	0.503	4	4.94%
8	Morgan Stanley	0.476	2	4.67%	8	0.323	5	3.92%
9	UBS	0.300	1	2.95%	10	0.261	4	3.16%
10	Lehman	0.244	2	2.39%	1	3.079	6	37.29%
	Total	10.186	31	8.258	30
	Average size:	0.329	0.275
Q3, including investment bank exchangeables
					2005 Comparables
	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Citigroup	3.482	10	29.05%	2	2.125	13	20.12%
2	Merrill Lynch	1.286	9	10.73%	5	0.628	5	5.95%
3	Goldman Sachs	1.126	4	9.40%	3	1.035	15	9.80%
4	Banc of America	1.101	8	9.18%	7	0.610	7	5.78%
5	JPMorgan	0.993	25	8.29%	4	0.792	6	7.50%
6	Morgan Stanley	0.951	19	7.93%	8	0.527	12	4.99%
7	Lehman	0.864	10	7.21%	1	3.307	14	31.31%
8	Credit Suisse	0.549	23	4.58%	6	0.618	3	5.85%
9	Deutsche Bank	0.504	5	4.20%	18	0.001	1	0.01%
10	Wachovia	0.303	7	2.53%	12	0.089	4	0.85%
	Total	11.985	231	10.562	122
	Average size:	0.052	0.087
September, excluding investment bank exchangeables
					2005 Comparables
	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Citigroup	2.575	2	45.83%
2	Banc of America	0.761	5	13.55%	2	0.360	4	20.11%
3	Credit Suisse	0.529	6	9.41%	7	0.060	1	3.35%
4	Merrill Lynch	0.421	5	7.49%	1	0.426	3	23.81%
5	Goldman Sachs	0.400	3	7.12%	6	0.075	1	4.19%
6	JPMorgan	0.342	4	6.08%	10	0.050	1	2.79%
7	Deutsche Bank	0.273	3	4.86%
8	Piper Jaffray	0.118	1	2.11%
9	Lehman	0.100	1	1.78%	3	0.346	4	19.32%
10	Bear Stearns	0.100	1	1.78%	9	0.053	1	2.98%
	Total	5.619	17	1.790	12
	Average size:	0.331	0.149
September, including investment bank exchangeables
					2005 Comparables
	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Citigroup	2.633	3	44.91%	1	1.166	4	35.59%
2	Banc of America	0.761	5	12.98%	4	0.360	4	10.99%
3	Credit Suisse	0.530	7	9.04%	8	0.060	1	1.83%
4	Merrill Lynch	0.421	5	7.18%	2	0.426	3	13.01%
5	Goldman Sachs	0.400	3	6.82%	5	0.238	6	7.25%
6	JPMorgan	0.356	13	6.07%	11	0.050	1	1.53%
7	Deutsche Bank	0.273	3	4.66%	17	0.001	1	0.02%
8	Piper Jaffray	0.118	1	2.02%
9	Bear Stearns	0.108	6	1.84%	10	0.053	1	1.63%
10	Lehman	0.102	2	1.73%	3	0.401	6	12.25%
	Total	5.864	82	3.276	43
	Average size:	0.072	0.076
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.

• 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.

• The investment bank exchangeables only group also includes bonds that convert into an index, a basket of stocks or a basket of indexes.

• 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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