While still in the lead in the race for the top ABS underwriter, Citigroup Capital Markets was only the fourth most active dealer in the three-month period ending June 30, according to preliminary numbers from Thomson Financial. Although Citi maintained a commanding lead heading into mid-year, Lehman Brothers made a strong push to jump to the third spot overall, from the fifth spot at the end of the first quarter.
Citibank, with $33 billion sold through late last week, did maintain a significant lead on its closest competitor, JPMorgan Securities. Citigroup currently controls 13% of the market, down from the 18% market share it had through the first three months of 2003. Contributing to the decline was a dip in issuance from Citibank N.A., which priced just $2.2 billion thus far in the quarter, versus nearly $6 billion in 1Q03.
Citigroup did remain the dominant credit card ABS underwriter, with $9.7 billion sold to date, or 26.4% of the sector. Additionally, Citi is the leading underwriter of student loan product, with $3.2 billion of proceeds placed with investors.
JPMorgan, with its strength in the auto loan sector, remained in second place, with $25.2 billion of ABS sold, good for 9.7% of the market. JPMorgan did not waiver in its book of business, having placed $12.4 billion in 2Q03, on par with its first-quarter issuance. With $4.4 billion of auto loan ABS sold, JPMorgan owns 14.9% of that sector.
Moving up to the third spot - and hot on the tail of JPMorgan - is Lehman Brothers with $23.6 billion sold, or 9.1% of the total market. Lehman's numbers are boosted by its second quarter performance, which saw it set the pace with almost $14 billion of bonds sold into the primary market. The majority of Lehman's business has been from its principal finance shelf issuance, propelling Lehman to the leading spot in the mortgage-related ABS sector. Within the mortgage related sector, Lehman has sold $20.9 billion and has sold 15.4% of the $136 billion of mortgage ABS seen this year. Deutsche Bank Securities currently sits in fourth place, with $21.5 billion sold, good for 8.3% of the market. Deutsche Bank, which closed the first quarter out of the top five, did not dominate in any one sector, but placed in the top three in the auto, student loan and CDO sectors.
Rounding out the top five is Morgan Stanley, which sold $20.2 billion and holds a 7.8% market share. While not the leader in any of the main sectors of the market, Morgan Stanley is the second-leading student loan ABS underwriter.
Despite the slight re-positioning, none of the 1Q03 top five fell out of the top five, which prevented some from moving into the lead pack. Credit Suisse First Boston - and could easily slip into the top five when the final numbers are released this week - is only slightly behind Morgan Stanley in sixth place, was the third-leading ABS underwriter this quarter, with $11.5 billion sold from April though the end of June. Bank One Capital Markets, meanwhile, sold about $10 billion in the second quarter, the fifth most over the period, but eighth year-to-date.
In aggregate, the top five underwriters control just under half of the entire market, accounting for $125 billion of the almost $260 billion sold in the first six months. The top ten underwriters control nearly 80% of the market.