JPMorgan remains top U.S. market convertibles underwriter year to date

• U.S. market convertibles issuance nearly $26.09 billion year to date

• Third-quarter convertibles issuance just $7.48 billion in 23 deals

By Rebecca Melvin

New York, Sept. 30 - J.P. Morgan Securities Inc. remained top U.S. market convertibles underwriter for the first three quarters of the year, with Bank of America and Citigroup Global Markets Inc. taking slots two and three, respectively; while Goldman Sachs & Co. took fourth position, according to data compiled by Prospect News.

For the year to date, JPMorgan accounted for $6.61 billion of new issuance in 42 deals, which was 25% of total volume of $26.09 billion.

So far this year, volume total stands well below year-ago levels. By this time last year, the primary market had seen $61.83 billion of new issuance.

For the most recent quarter, however, the totals are fairly consistent with $7.48 billion in the 2009 third quarter, compared to $7.01 billion for the 2008 third quarter.

Bank of America was the No. 2 U.S. market convertible underwriter for the year to date, with 29 deals, totaling about half of J.P. Morgan's issuance level. Bank of America had $3.33 billion, or 12.8%, of the total. Citigroup was a close third, with $3.23 billion in new issuance in 18 deals, totaling 12.4% of total volume, according to Prospect News' data.

Recent deal size has been generally smaller, and credit quality hasn't been as high. "There has been no investment-grade issuance," a New York-based sellsider said. "Clearly the market will take just about anything, but it's ripe to have high quality."

Of September's new issuance, AMR Corp.'s $400 million of 6.25% convertibles due 2014 was among the most widely played, with pricing still standing strong at about 105 bid, 106 offered. Gaylord Entertainment Co.'s $300 million of 3.75% convertibles due 2014 was well-liked.

Also among September new issues were small deals like Photronics Inc.'s $50 million of 5.5% convertibles due 2014. In all there were 12 new deals in September, totaling $3.17 billion in volume.

"Some of them did much better than people expected," a sellsider said.

No new U.S. issuance has been seen in this final week of the month and of the quarter. But Europe priced three new issues. They included Banco Bilbao Vizcaya Argentaria SA's €2 billion of five-year mandatory convertibles, Salzgitter AG's €296 million of seven-year convertible and UCB SA's €450 million of six-year convertible bonds, which priced Wednesday to bear a 4.5% coupon.

Year to date

2008 Comparables

	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	JPMorgan	6.611	42	25.35%	4	8.253	31	13.35%
2	Banc of America	3.327	29	12.76%	1	11.476	24	18.56%
3	Citigroup	3.234	22	12.40%	2	9.256	22	14.97%
4	Goldman Sachs	3.107	18	11.91%	5	7.430	22	12.02%
5	Morgan Stanley	2.765	19	10.60%	8	2.671	18	4.32%
6	Credit Suisse	2.512	15	9.63%	10	2.421	17	3.92%
7	Deutsche Bank	1.380	9	5.29%	11	2.331	11	3.77%
8	Barclays	1.175	8	4.51%	12	0.276	1	0.45%
9	Wells Fargo	0.778	7	2.98%
10	Calyon	0.267	1	1.02%
10	SG	0.267	1	1.02%
	Total	26.085	85	61.825	106
	Average size:	0.307	0.583
Third quarter
					2008 Comparables
	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	JPMorgan	2.477	12	33.14%	1	1.459	7	20.81%
2	Credit Suisse	1.214	4	16.24%	7	0.396	4	5.65%
3	Goldman Sachs	1.010	4	13.51%	3	1.083	5	15.45%
4	Citigroup	0.997	6	13.35%	8	0.378	3	5.40%
5	Banc of America	0.770	7	10.30%	5	0.685	3	9.77%
6	Morgan Stanley	0.430	5	5.75%	6	0.550	3	7.85%
7	Wells Fargo	0.173	2	2.32%
8	UBS	0.153	1	2.05%	4	0.816	3	11.64%
9	Deutsche Bank	0.090	1	1.20%	11	0.046	1	0.66%
10	RBC	0.050	1	0.67%
10	Jefferies	0.050	1	0.67%
	Total	7.475	23	7.010	18
	Average size:	0.325	0.389
September
					2008 Comparables
	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Goldman Sachs	0.695	2	22.49%	2	0.463	2	38.54%
2	JPMorgan	0.595	5	19.24%	3	0.225	1	18.75%
3	Citigroup	0.527	4	17.04%
4	Banc of America	0.426	4	13.79%
5	Morgan Stanley	0.261	3	8.44%
6	Wells Fargo	0.173	2	5.61%
7	UBS	0.153	1	4.96%
8	Deutsche Bank	0.090	1	2.91%
9	Credit Suisse	0.070	1	2.27%
10	RBC	0.050	1	1.62%
10	Jefferies	0.050	1	1.62%
	Total	3.090	12	1.200	3
	Average size:	0.258	0.400
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.

• Structured products issued by an investment bank and exchangeables for or linked to another company's stock are excluded.

• 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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