Lehman Brothers nearly edged out Bear Stearns from its spot as the top U.S. RMBS manager in 2006, but about $400 million stood in the way of its topping Bear, which has led the RMBS league tables for three consecutive years.
Bear ended the year selling nearly $100 billion in agency and non-agency RMBS and had a 9.9% market share under its belt with 116 issues, according to Thomson Financial data. Lehman managed 128 deals, totaling $99.6 billion and earning the bank a 9.8% market share.
Last year, Bear Stearns led Lehman by a wider margin, with 161 deals totaling $103.2 billion managed and a 10.4% market share. Meanwhile, Lehman had 135 deals that totaled $101 billion and a 10.2% market share.
Even though the top RMBS managers showed slight dips in issuance, overall, both agency and non-agency RMBS issuance in 2006 topped the trillion dollar mark, up by about $22 billion - or 2% - from the year earlier total of $991 billion, according to Thomson.
Slowing home price appreciation, among other factors, is expected to take a toll on mortgage volume this year, particularly in the agency hybrid, non-agency and near-prime spaces, market participants have said. For instance, total mortgage origination is expected to fall by 11% in 2007, according to Bear analysts, as housing turnover slows along with new pool issuance. Conventional agency issuance should drop to $826 billion from $908 billion in 2006, Bear analysts estimated. Demand for mortgage-backed securities, particularly from foreign investors and central banks, is expected to remain high through 2007.
Royal Bank of Scotland Group rounded out the top three issuers, with 106 issues totaling $93.5 billion and a 9.2% market share, compared with a slightly higher $95.9 billion, 139 deals and a 9.7% market share in 2005. Credit Suisse moved up to fourth place in 2006 from a fifth place finish in 2005. The investment bank managed 98 issues that totaled $74.2 billion and a 7.3% market share in 2006, compared to the year earlier's 121 deals, totaling $73.7 billion and adding up to a 7.4% market share.
Also moving up, JPMorgan Chase placed fifth in 2006 after a seventh place finish the year before. JPMorgan brought 105 deals to market that totaled $70.3 billion and a 6.9% market share; that's up from 80 deals totaling $59.7 billion and a 6% market share a year earlier. Countrywide Securities Corp. fell to a 12th place finish in the RMBS league tables, from eighth place in 2005. CWSC managed 94 deals last year that totaled $46 billion and a 4.6% market share, down from 102 deals in 2005 that totaled $59 billion and a 5.9% market share.
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