Citigroup repeats as champion of new convertibles issuance in 2007

• Convertibles issuance totals $96.76 billion in 2007

By Evan Weinberger

New York, Dec. 29 - Citigroup triumphed again in new convertibles issuance, claiming the title for the year, the quarter and the month of December.

In a historically strong year for new convertibles, Citigroup paced the field, raising $17.487 billion through 41 deals. The dollar amount represented 18.07% of the total for the year.

Citigroup maintained its place at the top of the rankings. The bank won 2006 by raising $12.091 billion in 31 new deals, representing 17.11% of the year's total.

Coming in a strong but distant second was JPMorgan, which raised $12.944 billion, or 13.38% of the year's total, in a league-best 48 deals.

JPMorgan's performance for the year was a big increase over its seventh place finish in 2006, when it raised $5.344 billion in 31 deals, or 7.56% of the total.

Morgan Stanley took the bronze for 2007, raising $9.644 billion in 18 deals, representing 9.97% of the dollars raised for the year.

That was a drop of one place in the rankings over 2006, when Morgan Stanley came in second. The investment bank raised $9.895 billion in 29 deals, representing 14% of the year's total.

The $96.758 billion raised by 198 deals in 2007 was a big jump over the 2006 total of $70.673 billion raised in 156 deals. The average size of new deals was $489 million for 2007, a rise from the $453 million raised in 2006.

Citigroup's margin of victory for 2007 was $4.543 billion, wider than its $2.196 margin over second-place Morgan Stanley last year.

Citigroup's dominance continued in the fourth quarter rankings, where the largest bank in the United States raised $6.687 billion in nine new deals, representing 25.35% of the dollars raised in the quarter.

Citigroup placed second in the fourth quarter of 2006, raising $3.528 billion in eight deals, or 14.42% of the quarterly total.

Goldman Sachs placed second in the fourth quarter, raising $5.095 billion in seven deals, or 19.31% of the total dollars raised.

Goldman's 2007 fourth quarter performance was a jump from 2006, when it raised $2.296 billion in six new deals, or 9.38% of the total, to place fifth.

Lehman Brothers came in third for the quarter, raising $3.782 billion in seven deals, or 14.34% of the total.

The numbers may have changed but the results remained the same for Lehman in the fourth quarter of 2006. The investment bank raised $2.801 billion in nine deals, or 11.44% of the total. That put Lehman in third place for the last three months of 2006.

The number of deals completed in the fourth quarter of 2007 was down from the same period last year, but the dollar volume was up. Banks put together 38 new deals in the final three months of the year, compared with 55 for the final three months of 2006. But the new deals in that period for 2007 totaled $26.380 billion, or an average of $694 million, versus $24.471 billion, or an average of $445 million, in the fourth quarter of 2006.

Market watchers say the increased deal size is a harbinger of things to come in 2008, as many financial firms will seek to strengthen their balance sheets with massive new convertible deals.

December was a particularly lucrative month for the convertibles market. In fact, the $17.411 billion raised in 17 new deals was the largest monthly total since January 2003.

The total dollar amount raised for the month dwarfed December 2006, when new issuance totaled $12.471 raised in 19 deals.

The $1.007 average size of new deals for December 2007 far exceeded the $656 million average size for December 2006.

Again, Citigroup took top honors. The bank raised $4.883 billion in four deals, representing 28.24% of the total dollars raised for the month.

Citigroup came in second in December 2006, raising $2.129 billion in four new deals, representing 17.07% of the total for the month.

Goldman Sachs placed second for the month, raising $3.775 billion in five new deals, or 22.06% of the month's total. This was a big jump over the investment bank's seventh place finish in December 2006. Goldman raised $771 million in two deals, or 6.19% of the month's total.

Lehman retained its position from December 2006. In the final month of 2007, the investment bank placed third and raised $3.705 billion in six new deals, or 21.65% of the total. Lehman also placed third in December 2006, raising $1.145 billion in four deals, representing 9.18% of the total.

The Prospect News figures cover dollar-denominated deals offered in the United States as registered transactions or under Rule 144A.

2007

2006 Comparables

	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Citigroup	17.487	41	18.07%	1	12.091	31	17.11%
2	JPMorgan	12.944	48	13.38%	7	5.344	31	7.56%
3	Morgan Stanley	9.644	18	9.97%	2	9.895	29	14.00%
4	Goldman Sachs	9.474	28	9.79%	4	6.446	21	9.12%
5	Lehman	8.705	24	9.00%	6	6.263	18	8.86%
6	Deutsche Bank	8.487	25	8.77%	9	3.066	15	4.34%
7	Merrill Lynch	8.232	33	8.51%	3	9.256	42	13.10%
8	Banc of America	6.136	32	6.34%	5	6.426	35	9.09%
9	Credit Suisse	5.633	22	5.82%	10	2.470	16	3.50%
10	UBS	3.527	20	3.65%	8	4.691	23	6.64%
	Total	96.758	198	70.673	156
	Average size:	0.489	0.453
Fourth quarter
					2006 Comparables
	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Citigroup	6.687	9	25.35%	2	3.528	8	14.42%
2	Goldman Sachs	5.095	7	19.31%	5	2.296	6	9.38%
3	Lehman	3.782	7	14.34%	3	2.801	9	11.44%
4	Merrill Lynch	2.712	10	10.28%	6	1.979	12	8.09%
5	JPMorgan	2.603	9	9.87%	8	1.431	10	5.85%
6	Morgan Stanley	2.000	4	7.58%	1	4.300	11	17.57%
7	Credit Suisse	1.247	6	4.73%	10	0.955	3	3.90%
8	Wachovia	0.627	2	2.38%	11	0.699	6	2.86%
9	UBS	0.600	2	2.27%	9	1.157	8	4.73%
10	Deutsche Bank	0.500	4	1.90%	7	1.484	7	6.07%
	Total	26.380	38	24.471	55
	Average size:	0.694	0.445
December
					2006 Comparables
	Underwriter	Amount	No.	Share	Rank	Amount	No.	Share
1	Citigroup	4.833	4	28.24%	2	2.129	4	17.07%
2	Goldman Sachs	3.775	5	22.06%	7	0.771	2	6.19%
3	Lehman	3.705	6	21.65%	3	1.145	4	9.18%
4	Morgan Stanley	1.700	3	9.93%	1	3.896	8	31.24%
5	JPMorgan	1.131	2	6.61%	5	0.867	4	6.95%
6	Credit Suisse	0.917	4	5.36%
7	UBS	0.500	1	2.92%	12	0.129	1	1.03%
8	Banc of America	0.205	2	1.20%	9	0.544	3	4.36%
9	Merrill Lynch	0.151	2	0.88%	4	1.053	6	8.44%
10	Bear Stearns	0.085	1	0.50%	8	0.551	4	4.42%
	Total	17.114	17	12.471	19
	Average size:	1.007	0.656
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.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.