• Convertibles issuance falls 37.3% to $1.9 billion despite more deals
• Convertibles issuance (including synthetics) totals $2.6 billion
• Morgan Stanley tops tables including synthetics
By Kenneth Lim
Boston, Jan. 31 - Lehman Brothers took an early lead in the convertible league tables, as January saw more, but smaller, deals year-on-year. Including investment bank exchangeables, however, Morgan Stanley leads the pack.
Lehman Brothers underwrote three deals in January, bringing about $376 million of new convertibles to the market. UBS Investment Bank is second, with $268 million of proceeds from two deals, with Merrill Lynch in a close third on $262 million of proceeds also from two deals. Citigroup, which finished 2006 in the top spot, is currently in fifth place having shared bookrunning responsibilities with UBS and Merrill Lynch on Alexandria Real Estate Equities Inc.'s upsized $400 million offering.
Morgan Stanley, which did not make it to the top 10 underwriters in January, nevertheless was the most prolific underwriter when synthetics were counted. Including investment bank exchangeables, Morgan Stanley's eight deals raised about $430 million in proceeds. In second spot is Lehman, followed by Citigroup.
Although more deals were issued in the month compared to the same period in 2006, the average size of each deal and the total proceeds declined. January 2007 saw $1.872 billion of proceeds raised through nine convertibles, 37.3% less than the $2.987 billion through seven convertibles in January 2006. Synthetics brought the proceeds for the month to $2.591 billion through 148 deals, 30.6% less than the $3.737 billion raised through 38 deals in the year-ago period.
January, excluding investment bank exchangeables
2006 Comparables
| Underwriter | Amount | No. | Share | Rank | Amount | No. | Share
|
| 1 | Lehman | 0.376 | 3 | 20.08% | 5 | 0.464 | 2 | 15.54%
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| 2 | UBS | 0.268 | 2 | 14.33% |
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| 3 | Merrill Lynch | 0.262 | 2 | 13.98% | 1 | 0.750 | 3 | 25.10%
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| 4 | JPMorgan | 0.234 | 3 | 12.48% |
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| 5 | Citigroup | 0.153 | 1 | 8.19% | 3 | 0.522 | 2 | 17.49%
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| 6 | Credit Suisse | 0.136 | 1 | 7.25% | 4 | 0.464 | 2 | 15.54%
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| 7 | Bear Stearns | 0.125 | 1 | 6.68% | 2 | 0.537 | 2 | 17.96%
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| 8 | Goldman Sachs | 0.115 | 1 | 6.14% |
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| 9 | Raymond James | 0.072 | 1 | 3.84% |
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| 10 | Deutsche Bank | 0.053 | 1 | 2.85% |
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| Total | 1.872 | 9 | 2.987 | 7 |
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| Average size: | 0.208 | 0.427 |
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| January, including investment bank exchangeables |
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| | | | | 2006 Comparables |
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| Underwriter | Amount | No. | Share | Rank | Amount | No. | Share
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| 1 | Morgan Stanley | 0.430 | 8 | 16.60% | 2 | 0.647 | 8 | 17.32%
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| 2 | Lehman | 0.403 | 5 | 15.56% | 5 | 0.521 | 4 | 13.93%
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| 3 | Citigroup | 0.270 | 3 | 10.42% | 3 | 0.612 | 5 | 16.37%
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| 4 | UBS | 0.268 | 2 | 10.35% |
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| 5 | Merrill Lynch | 0.262 | 2 | 10.10% | 1 | 0.750 | 3 | 20.07%
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| 6 | JPMorgan | 0.236 | 17 | 9.11% |
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| 7 | Credit Suisse | 0.158 | 14 | 6.10% | 6 | 0.464 | 2 | 12.42%
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| 8 | Bear Stearns | 0.126 | 4 | 4.88% | 4 | 0.537 | 2 | 14.36%
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| 9 | Goldman Sachs | 0.115 | 1 | 4.44% | 7 | 0.167 | 6 | 4.47%
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| 10 | Barclays | 0.093 | 44 | 3.60% | 8 | 0.030 | 9 | 0.82%
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| Total | 2.591 | 148 | 3.737 | 38 |
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| Average size: | 0.018 | 0.098 |
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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.
• 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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