Lehman Brothers leapt to the top of the league tables for year-to-date commercial mortgage-backed securities book managers for the first half of 2000, boosted by a successful partnering with UBS Warburg that spawned two large deals which were well received by the market.

With more than $2.58 billion in proceeds and 20.1% of the market share, Lehman crept into the top-three slot for year-to-date CMBS book managers, despite its absence from the top-three positions during the first quarter, according to Thomson Financial Securities Data (TFSD). Morgan Stanley Dean Witter ranked second for year-to-date book managing, with $2.52 billion in proceeds and 10.7% of market share. During the same period of time in 1999, MSDW came in first. Finally, J.P. Morgan & Co. ranked No. 3 for the first half of 2000, with $1.37 billion in proceeds. For the same period of time last year, J.P. Morgan ranked No. 10.

For the second quarter alone, however, MSDW ranked No. 1, with $1.34 billion in proceeds and 29.2% of the market, maintaining its No. 1 position from 1Q 2000, when it completed $1.03 billion in proceeds. Lehman Brothers ranked No. 2 for the second quarter of this year, with $1.24 billion in proceeds and 27% of market share, according to TFSD. Salomon Smith Barney rounded out the top three for 2Q CMBS book managers, with $663.2 million in proceeds and 14.4% of the market.

"It doesn't necessarily surprise me that the same few names that have been at the top the last few years are there again," said Ken Cohen, Lehman's head of CMBS trading. "Despite the fact that overall CMBS issuance is down I would expect to see those of us who have been at the top to keep that same type of market share. So on a relative basis, while the volume overall is down and while our individual volume will be down, the market should still keep us toward the top."

Lehman Brothers is predicting total-year CMBS issuance to be approximately $48 billion, and the bank expects a few billion more in new deals to be completed during the second half of the year.

This figure is down 40% to 50% from last year's figures, the result of overall diminishing volumes, increasing interest rates and volatile spreads.

"In an environment like this, you can kind of separate the men from the boys," Cohen said. "I think that some of the less diversified CMBS players are going to struggle in low-volume environments. So I think the silver lining on this is that in another year or so a number of the tertiary players may no longer be in the marketplace."

Certainly Lehman's pairing with UBS Warburg for two major deals affected the banks ascension in the CMBS book manager league tables for the second quarter. The conduit deal, LB-UBS Commercial Mortgage Trust 2000-C1, and the 4 Times Square deal fared quite well in the market, after a bumpy start.

"The success we've had with partnering with UBS was something that we felt was going to be nicely received by the market. It exceeded our expectations," Cohen said. "We're excited about the prospects of continuing that relationship over the course of the year."

Coming up for the third quarter: Lehman is readying a couple of fixed-rate conduit deals, a large stand-alone deal and a large floating-rate transaction.

"Our commitment to CMBS is as strong as ever," Cohen noted. "Nothing has changed in terms of our desire to remain a big player in the business."

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