The residential mortgage-backed securities sector in 2005 grew by more than $200 billion in issuance from 2004. Combining both agency and non-agency RMBS, total issuance reached 1,264 deals worth $960.5 billion last year, compared with 1,201 deals worth $755.2 billion in 2004, according to data culled by Thomson Financial.
And for the second year in a row, Bear Stearns swept in to take the top spot among manager activity rankings in the sector. Bear topped the 2005 league tables after briefly flirting midyear with a third place ranking, only to scale back to number one in the fourth quarter and final year-end tally.
The investment bank earned its 10.7% market share through the sale of 130 deals totaling $102.3 billion, compared with a 12.4% market share and 168 deals worth $93.3 billion in 2004. Bear, which ousted UBS from the top spot in 2004, has credited its rise to its direct underwriting arrangement with its subprime lending unit EMC Mortgage Corp., based in Irving, Texas.
To be sure, Bear's closest rivals narrowed the issuance gap last year. Lehman Brothers cleared a tight second-place, underwriting 117 deals totaling $100 billion. Lehman earned a 10.4% market share in 2005, compared with a third place ranking in 2004 and a 10.1% market share from the sale of 116 deals worth $76.4 billion.
Climbing three notches to reach the number three spot in 2005 was the Royal Bank of Scotland Group, which garnered a 9.6% market share through the sale of 100 deals totaling $92.3 billion. RBS in 2004 held a 6.8% market share through 103 deals worth $51.5 billion.
Not everyone put a priority on boosting market share. Even though UBS sold more in dollar volume in 2005 than the previous year, the arranger fell to fourth place in 2005 from second in 2004. UBS served as underwriter on 99 RMBS deals totaling $77.6 billion in 2005, earning an 8.1% market share, compared with a 10.5% market share and 122 deals totaling $79 billion in 2004.
Completing the top five RMBS managers is Credit Suisse First Boston, which also ranked fifth in 2004. CSFB earned the honors this year through a 6.8% market share achieved by the sale of 92 issues totaling $64.8 billion. While maintaining the same rank, CSFB did lose a little bit of market share from 2004, when it garnered a 7.2% share through 95 deals totaling $54.1 billion.
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