In the specialized business of ABS, Citigroup Global Markets attained its top ranking as lead manager of all public and 144a transactions in 2006 by being well rounded. The investment bank arranged about $120.7 billion in ABS deals, giving it a 9.9% share of the term ABS market and putting it well ahead of second-place finisher Merrill Lynch, which cleared $98.7 billion in deals. Overall U.S. ABS issuance totaled $1.2 trillion in 2006, up slightly from $1.1 trillion in 2005, according to Thomson Financial figures.

Citigroup took a balanced approach to its ABS underwriting business in 2006, endeavoring to be among the top two best underwriters in several asset classes, market sources said. The investment bank ranked number two among lead CDO managers, right behind Merrill, according to Thomson data, while market observers estimate that the bank is number one or two among lead manager for credit card, student loan and auto ABS deals. That strategy helped Citi put together a good underwriting business overall, those familiar with the company said.

Otherwise, the rankings for the top five lead managers were significantly changed from last year, according to the data. At the end of 2005, Lehman Brothers was first, followed by Citigroup, Credit Suisse, Merrill Lynch and Deutsche Bank Securities, respectively.

This time around, Deutsche Bank took third place, with $89 billion in deals, Lehman Brothers was fourth, with $86 billion and the Royal Bank of Scotland Group took fifth position by leading $78 billion in ABS deals. RBS moved up three slots from last year.

The ABS team at Banc of America Securities got a significant boost up the lead manager rankings, moving from 11th place at the end of 2005 to eighth place for yearend 2006, with $70 billion in deals. Sources familiar with the investment bank say the performance is owing to the parent company's purchase of MBNA for $35 billion in January. The MBNA Credit Card Master Note Trust produced close to $20 billion in issuance in 2006, for which Banc of America received 100% league table credit, said one market observer familiar with the company. Otherwise, the bank might have gotten three or so mandates for deals.

JPMorgan Securities also moved up in the rankings. Its $75.9 billion in deals moved it from 10th place to sixth at the end of 2006.

Credit Suisse, Banc of America, Morgan Stanley and Countrywide Securities Corp., placing sixth through 10th place respectively, finished out the top 10 lead manager rankings for 2006. Notable moves included Morgan Stanley, which inched up two slots in the rankings, with $67.9 billion in deals and Countrywide Securities. That latter rose from sixth place last year, and did $66 billion in deals.

ABS issuer rankings

The RMBS sector dominated headlines with accounts of ailing subprime lenders and threats of stagnating issuance for 2007. At least for 2006, it played a significant role in stirring up the rankings of top ABS issuers for the year. Countrywide worked equally hard on the issuer side of the league tables, where it maintained its number one ranking, despite the fact that the amount of debt that it floated dropped by 36.4%. By the end of 2005, the home loan provider came to market with $97 billion in debt, and by the end of 2006 it did $62.7 billion.

The well-rounded Citigroup stepped up a few notches to place second, up from sixth at the end of 2005. This year, the investment bank cleared $45.5 billion in debt floated, up from $29.9 billion at the end of 2005. Lehman Brothers held steady in third place, with $39.7 billion in placed debt, while General Motors Acceptance Corp. placed fourth with $39.3 billion in issuance. Morgan Stanley Group rounded out the top five ABS issuers for 2006, with $35.6 billion in paper, and that bank also maintained its position from last year.

As expected, Ameriquest Mortgage Corp. stepped off of a sheer cliff in the rankings, mirroring its undoing 2006. It plunged from fourth place at the end of 2005, landing at 16th place in 2006. Issuance from the former subprime lending arm of ACC Capital Corp. was just $17.6 billion in 2006, down 66.4% from the $50.8 billion that it did for all of last year.

(c) 2007 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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