Halfway through the second quarter, the league table chase is shaping up to be a barn-burner with a virtual tie for the top spot and barely $2 billion separating the lead from the fifth spot, according to Thomson Financial. The names remain the same, however, but in an unusual order: Banc of America Securities at a close number two and Salomon Smith Barney securely in fifth.
With $18.4 billion of ABS placed with investors JPMorgan has a $500 million lead on second place BofA, which has led $17.9 billion. JPMorgan is bolstered by their strength in the auto sector while BofA's hold on the mortgage-related sector is the reason behind its fast start.
Credit Suisse First Boston is $1.2 billion behind BofA, splitting third and fourth place with Deutsche Bank, both with roughly $16.7 billion sold. 2001 champ Salomon is hanging tough in fifth with $16.1 billion of supply placed.
The reason for the logjam up top is the trend of two-, sometimes three-way joint leads, sources noted. "The story in the first quarter is how many joint-lead managed roles there have been," said CSFB ABS co-head Joe Donovan following the end of the first quarter. "If these trends continue, by year-end the top five or six (underwriters) will have distanced themselves from the pack."
In fact, the distancing has already begun as sixth place Lehman Brothers is roughly $5.4 billion behind Salomon, with $10.7 billion sold this year, duking it out with Morgan Stanley, which has sold $10.4 billion of supply this year.
The top five underwriters account for $85.8 billion of the $151.3 billion, or 56.9%, of public and Rule 144A paper sold this year. And the top 5 banks collectively control more than double the market than the latter five in the top 10, which collectively have a 25.8% of the market
