The third quarter turned out to be a very slow and painful period for the asset securitization market. Issuance was a mere $114.4 billion during the period, which represented a 60% plunge from the same quarter last year, according to information from global research firm Dealogic.
Despite all of this, JPMorgan Securities managed to stand its ground against the competition and maintain its top slot among lead ABS managers of public deals. JPMorgan managed $61 billion in ABS business in the third quarter, according to the initial tally of deals by the ASR Scorecard database. That was enough to secure an 11.7% share of the public market. Compared with the same period last year, when JPMorgan completed $38.7 in lead manager business, the investment bank increased its underwriting business by 59%. It also moved up in the rankings from fourth place.
"It comes down to the fact that JPMorgan, in general, has the largest trading facility of any bank in the world," said Richard X. Bove, Sr., a managing director of equity research at New York-based Punk Ziegel & Co. "You have this huge customer base which is accustomed to using this distribution system. You have a leadership position in the derivatives market; you are allocating capital to the business at a fairly rapid clip. The fact is, you've got all of these inherent advantages that have been built in over the years that allow you to stay on top of the business."
Banc of America Securities managed $46.8 billion in ABS to place second, allowing it to take an 8.9% share of the overall market. Citigroup Global Markets placed third, with $46.5 billion in business. Fourth-place finisher Morgan Stanley completed $42.2 billion in deals, enough for the bank to hoist itself up from 10th place in last year's third quarter, when it did $29.7 billion in ABS business. Wachovia Securities, which placed fifth with $40.8 billion in underwriting business, made an even more drastic improvement in its standings: A year ago, it ranked 16th, with $13.1 billion in deals.
Rounding out the top 10 finishers were: sixth-place Merrill Lynch, with $34.8 billion in deals; RBS Greenwich Capital, which came in seventh with $30.3 billion; Lehman Brothers, which placed eighth with $29.9 billion; Bear Stearns, which came in ninth with $28.1 billion, and Countrywide Securities, which did $27.7 billion in transactions.
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