Merrill Lynch again seized the top spot among U.S. CDO underwriters in the first half of the year, selling 27 deals to the market totaling some $22.2 billion and a 16.8% market share, according to data maintained by Thomson Financial. The investment bank managed to reclaim its position back after losing it in the first quarter to Citigroup Global Markets, a shift some speculated was the result of the loss of a handful of staff members led by former Merrill star Chris Ricciardi.

Merrill had enjoyed dominating its competitors for the overall highest percent of U.S. CDO market share in both 2004 and 2005. In fact, Merrill in 2005 increased the overall dollar volume of deals it underwrote by some 66% - a move that bought it more than a $6 billion cushion between itself and its nearest competitor by yearend. In the final quarter of 2005 alone, Merrill achieved its number one rank through an 18.6% market share amassed through 10 deals, totaling roughly $5.9 billion. But in the three months that ended March 31, Merrill had underwritten nine deals totaling $6.7 billion - only 14% below Citigroup but enough for it to drop to second place and a 14.9% market share.

A testament to the massive growth underway in the U.S. CDO market is that both Citi and Merrill nearly doubled the dollar volume of deals they sold to the market in the first half of this year compared to last year. Citigroup brought 29 deals to market in the first half of the year - more than Merrill's 27, but only totaling about $18 billion. Citigroup finished in second with a 14.3% share of the market, compared with a 13.9% share of the market during the same time period last year, when it sold 19 deals to the market totaling $9 billion.

Overall, the CDO market swelled to $126.3 billion in issuance in the first half - up 96% from the $64.5 billion reached in the first half of last year. An impressive 249 deals came to market during the time period, while only 172 came during the first six months of 2005.

Deutsche Bank rose to third place from a seventh place finish in the first half of last year. The investment bank sold 16 deals, totaling $9.6 billion and garnering a 7.6% share of the market, up from 14 deals totaling $3.5 billion and a 5.6% market share in the first half of 2005. Right on the heels of Deutsche was Banc of America Securities, which made an impressive gain in the first half of this year after posting a 433% year-over-year increase in CDO dollar volume it sold to the market. As of June, BofA had brought 22 deals to market, totaling $9.6 billion and a 7.6% slice of the market. During the same time period last year, BofA had only brought 18 deals to market, totaling a significantly smaller sum of $1.8 billion and a 5.6% market share.

Credit Suisse rounded out the top five. The investment bank brought 14 deals to market in the first half of 2006, totaling $8.1 billion and a 6.4% market share. That's compared with a number eight ranking during the same time period last year, achieved through seven deals totaling $2.9 billion and a 4.6% share of the market.

Notably, Societe Generale emerged into the top 18 underwriters in the first half, selling seven deals to the market totaling $3.4 billion and a 2.8% market share - earning it a number 13 slot. The French bank did not make it onto the charts during this time period last year. Goldman Sachs fell four places year-over-year in the first half, ranking 14th. The investment bank brought seven deals to market, totaling $3.4 billion and equivalent to a 2.7% market share, compared with six deals that totaled $2.6 billion last year, but earned it a 10th place finish and slightly larger 4.1% hold on the market.

(c) 2006 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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