With a phenomenal $15 billion in business for the third quarter, Salomon Smith Barney maintained the No. 1 slot in the manager rankings for the U.S. public and Rule 144A markets, both in quarter and year-to-date figures, according to preliminary data provided by Thomson Financial Securities Data.
With nearly $36 billion in proceeds so far this year and a 17.1% market share (22.3% for the quarter), Salomon is nearly $8 billion over where it stood last year going into the fourth quarter.
More stifling perhaps, Salomon is hoarding a $13 billion lead over the No. 2 spot, currently held by Lehman Brothers at approximately $23 billion, with a 10.9% market share. At the close of the second quarter, that same gap was just $5 billion wide.
Last year at the end of the third quarter, first-place Credit Suisse First Boston was pulling in $34 billion, just short of $2 billion over Lehman Brothers, which held the No. 2 spot.
"For us it was, again, a broad book of business across the asset categories," said William Grady, managing director and co-head of global ABS at Salomon. "It included our staple perennial issuers such as Daimler Chrysler, Ford [Motor Credit], Harley Davidson, and Onyx [Acceptance Corp.], but in addition, there were a number of new issuers for us."
Salomon did first-time business with companies such as Mitsubishi Motor Corp. of America, Providian Financial Corp. and National City.
"We also had a continuation of our cross-border business done in the U.S., with the large Holmes transaction for Abbey National and the follow-up credit-card transaction of [Royal Bank of Scotland's] Arran Two," Grady said.
Grady pointed out that only $2.8 billion of Salomon's total proceeds can be attributed to its affiliation with Citibank, which launched its only two transactions of the year late last month. The benchmark transactions, in which the subordinated pieces were disconnected and issued separately from the seniors, are said to have triggered a wave of copycat deals in the works.
"The Citibank deal, I think, was a great innovation, but I think it just adds to our core third-party franchise," Grady said.
Just behind No. 2-placing Lehman Brothers, Deutsche Bank has snatched the No. 3 spot with $18 billion and 8.7% market share, inching over Morgan Stanley Dean Witter, which came in fourth, enjoying $17 billion in proceeds and an 8.2% market share.
Meanwhile, Credit Suisse First Boston, at $16.8 billion, held on to the No. 5 spot in both year-to-date numbers and for the quarter, neck-to-neck with Chase Manhattan Corp.'s $16.5 billion, which more than doubled its proceeds from the same time period in 1999.
For the quarter, Chase took the No. 3 spot in the U.S. public and Rule 144A markets, up from No. 7, at the close of 2Q2000.
"This was a particularly strong quarter for us," said Michael Malter, managing director and head of global securitized finance at Chase.
"A number of issuers that we had been targeting and working with over the years finally handed us the books," Malter said. Malter named Sallie Mae (now USA Education) as an example, where Chase was named co-lead on Sallie Mae's 2000-4 deal that priced early last month.
Chase was dominant in the auto sector, managing in excess of $6 billion year-to-date. Going forward, the bank is looking to hit the home-equity and mortgage-related ABS sectors.
"That's the space where you should watch Chase, because we're putting some strategies in place which we expect should substantially increase our level of activity," Malter said.
Chase has made some significant hires for its mortgage ABS research team, including Chris Flanagan, Ralph Desirio, and Ryan Asato, all formerly of Merrill Lynch (ASR 5/1/00). Also, the bank recently moved Matthew Whalen over from Chase Funding to Chase Securities, again in efforts to ramp its home-equity ABS business.
And who could discount the recent announcement that Chase will merge with J.P. Morgan (No. 9, $9.9 billion YTD), which should no doubt boost the combined standings in the long term, players have said (ASR 9/18/00).
Deutsche Bank, Up Six Notches
As the market predicted back in February, when the asset-backed team at CSFB migrated to Deutsche Bank, the firm continued its steady climb in the league tables, hopping to No. 3 for the year and No. 2 for the quarter, up from its No. 9 spot year-to-date spot at the close of 2Q2000.
This time last year, Deutsche stood at No. 15 with $3.6 billion in proceeds.
"I'm very, very pleased with our progress," said Jorge Calderon, group co-head of the asset-backed group at Deutsche. "When we we're planning, we were targeting something in the order of $15 billion for the year. I think to us that would have been good progress. The fact that we're at levels that are going to be above 17, and we still have a quarter to go and a fairly heavy back log, it's been great."
Further, Deutsche was the No. 1 underwriter in the Rule 144A market, both in year-to-date proceeds and for the third quarter alone.
Most recently, the firm was lead on Providian Financial Corp.'s $1.2 billion Rule 144A credit-card deal out of its Gateway Master Trust (see story this page), accounting for a large portion of the bank's private business.