Citigroup Global Markets did not have much climbing to do in order to claim first place in the ABS lead manager rankings for the first half of 2006, according to data from Thomson Financial. After placing second in the league tables at the end of the first half of 2005, Citigroup has emerged as the top lead manager so far for 2006.
Duplicating its placement on the lead manager rankings for the first quarter, Citigroup was the only investment bank to snag a double-digit market share of ABS deals. The company underwrote $59 billion of ABS transactions through June 30, 2006, giving it a 10.5% share of the overall market. That amount allowed Citigroup to secure a comfortable lead over second-place finisher Merrill Lynch, which completed $48.8 billion worth of deals. Appearing to go after the big-game transactions, Merrill Lynch acted as lead on 72 issues, the same number of deals that sixth-place finisher Royal Bank of Scotland Group completed. Lehman Brothers, which was first place in the same period last year, lost its leadership position, and slipped to third after ushering $46 billion of ABS deals to market.
The lineup of ABS lead managers for the first half of 2006 did not change dramatically from last year. Deutsche Bank held onto its fourth-place slot. Credit Suisse and the Royal Bank of Scotland Group came in fifth and sixth, respectively. Those two banks moved up the ranks together, after finishing in sixth and seventh-place, respectively, during the same period in 2005. Morgan Stanley came in seventh place, slipping two spots in the ranking. Eighth-place finisher JPMorgan Securities acted as lead manager on $34.7 billion of transactions, enough to secure a 6.2% share of the overall market, and pull the bank up from its 12th-place spot after last year's mid-way point tally. Banc of America Securities and Countrywide Securities came in ninth and 10th place, respectively, duplicating their efforts from last year.
According to Thomson Financial, overall ABS issuance for the first half amounted to $562.5 billion, almost flat over the $563.2 billion done midway through 2005. Thomson's is not the only ABS tally to suggest that ABS issuance has hit a plateau. According to RBS Greenwich Capital's U.S. ABS Market Midyear Review & Outlook, ABS volume came to between $380 billion and $400 billion, unchanged from a year ago. RBSGC analysts chose to highlight the positive aspect of that volume.
"Despite Reg A/B, rising mortgage rates, softer housing and lots of macroeconomic uncertainty, fixed-income investors had a love affair with Libor floaters, and ABS issuers tapped into a deep well of liquidity," the report said.
On the ABS issuer side, Countrywide Credit Industries took the top slot, tapping the securitization market for $28.9 billion of paper in the first half of the year. That amount of issuance represented a 5.1% share of overall issuance. Not only does Countrywide Credit enjoy a comfortable $2 billion lead in issuance over second-place finisher Morgan Stanley Group, but it was the only one of the top five finishers that was not an investment bank, according to the Thomson Financial numbers. Citigroup climbed from its seventh-place finish at the same period last year to third place, with $22.5 billion in issuance. General Motors Corp. and Lehman Brothers, slipped down the rankings to fourth and fifth place, respectively, as a pair. The two issuers were second and third at the same time last year. Washington Mutual, a fast-rising star in the retail banking industry, leapt to sixth place from 14th place last year by issuing $18.1 billion in asset-backed paper. Student loan financing entity SLM Corp. placed seventh, inching up in the rankings from eighth place with $17.3 billion in issuance for the first half with seven deals.
Not only did JPMorgan make significant moves up the lead manager league table, but the company improved its standings among issuers, too. Last year, the company ranked nineteenth among ABS issuers, with $7.8 billion. In 2006, JPMorgan hoisted itself up in the issuer rankings by floating $14.3 billion of ABS debt, which allowed it to secure an eighth-place berth in the standings.
Mortgage lender Ameriquest Mortgage Corp. placed ninth, with $13.7 billion in issuance this year, slipping from fourth place for the same period in 2005, when it tapped the ABS market for $25.9 billion. Credit Suisse Group rounded out the top 10 finishers, with $11.2 billion in issuance for this year's first half. The bank, however, slipped from ninth place, where it finished last year with $11.4 billion in issuance.
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