With a new strategy just about fully implemented, Banc of America Securities is set to leapfrog into the upper echelon of asset-backed underwriters by regularly leading deals for high-profile, programmatic issuers as well as off-the-run names.

Over the past year, the bank has made a push to win first-time mandates for top issuers such as MBNA, Capital One, Honda, Option One and Sallie Mae. Company sources note there are more first-time leads in the works for the near term.

The Charlotte, N.C.-based bank was formed primarily through the 1999 merger of the old Bank of America and NationsBank - which had acquired Montgomery Securities two years prior. This union, combined with large-scale hiring of former Wall Street bankers, gave the securities unit access to a global investor base stretching across the continental U.S., Europe and Asia. Heading the securitization group is George Ellison, a former Merrill Lynch and Salomon Smith Barney banker.

These previous relationships are currently paying dividends in the leveraging of the BofA sales force, leading to the ability to sell ABS to a "newbee" investor as far away as China. Untapped investor bases including some private West Coast hedge funds and capital pools - initially cultivated by Montgomery - are an example of what rival banks do not offer.

Until recently, BofA made its name selling more challenging deals to investors, where structuring and market knowledge are paramount in moving paper. Names like Spiegel and Saks, were labor-intensive offerings that required a great deal of time educating investors about the issuer. This type of deal used to be the norm for the firm, and while these "legacy clients" will by no means be left by the wayside, the addition of benchmark issuers to the fold means that BofA is poised to make the jump to a bonafide bulge bracket.

While this slight tweaking of focus will lead to lower margins on a per-deal basis, the added volume has made up the difference. BofA has steadily climbed the league-table rankings (partially helped by industry consolidation) and is currently in sixth place so far this year, according to Thomson Financial.

As for the prospects for the future, Luis Araneda of the Global Asset Securitization Group said, "We expect our underwriting market share to continue growing, based on our proven structuring and distribution expertise, and also as our reputation continues growing from the momentum generated by successful marquee transactions in 2001."

Araneda, who leads the credit card sector of the group, added that the bank has almost fully penetrated the sector, having run the books on deals for just about every issuer, with the obvious exceptions of issuers affiliated with competing underwriters (i.e. Citibank, First USA, Chase and Discover). It was added that a first-time mandate for an undisclosed independent retail-card issuer is a short-term goal.

Just one month in to the fourth quarter, BofA is in solid shape, having brought approximately $5 billion of securitized product to investors - roughly 10% of market share for the quarter. While it is too late to make a push in the current league tables (BofA is $18 billion behind leader CSFB in public/144A league tables) 2002 is the start of a new year.

With an already firmly entrenched place in the CMBS market as well as previously announced plans to securitize most of its EquiCredit home-equity portfolio - in addition to an increasing presence in the CDO sector with three deals this year (Beacon Hill II, Endeavour and MKP II) - it looks like BofA hopes to become the first non-Wall Street-based bank in the top spot of the league table underwriter rankings.

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