After a lackluster performance last year, UBS Warburg is showing its might in the 2001 RMBS league tables.

UBS placed No.1 in the third quarter RMBS manager activity rankings for both agency and non-agency, according to the most recent league table results from Thomson Financial. Outpacing stalwart Bear Stearns & Co. Inc., UBS Warburg, with a 16.5% market share, sold $16.536 billion in proceeds.

Bear Stearns, on the other hand, which came in with a 16% market share, completed $16.047 billion in proceeds.

In the year-to-date rankings, Bear Stearns remains on top with $46.014 billion (15.8% market share), though UBS is not that far behind with $41.452 billion (14.3% market share).

Both managers have leaped from where they were last year for rankings covering the same time period.

Bear Stearns was only No. 3 in the 2000 third quarter year-to-date totals. Significantly more notable is UBS's climb from the No. 8 spot to where it is right now.

For that time period, Bear came in with $12.428 billion in proceeds and UBS, in direct contrast to this year's impressive show, merely came in with $5.492 billion. Bear and UBS had 12.4% and 5.5% market share, respectively.

UBS's climb to stardom

UBS's transformation into a top player came after the acquisition by UBS Warburg of PaineWebber. The ramping up of the mortgage securitization team's resources through the merger gave it the necessary backing to climb the charts.

"I think we've got an excellent record here at UBS Warburg in sales, trading and research," said Ramesh Singh, head of mortgage-backed securities and asset-backed securities at UBS.

Prior to working at UBS, Singh's team was together at PaineWebber before the company was acquired by UBS Warburg.

"We had demonstrated expertise in the game of mortgage-backed underwriting. However, we did not have the kind of balance sheet that our competitors did, " said Singh. "The UBS Warburg acquisition of PaineWebber boosted our performance. Whereas clients could get ideas, execution and product from PaineWebber, they can get more of all those things now given the increase in the amount of resources we have dedicated to this business."

On the non-agency business

UBS Warburg's strength is more apparent in its agency business, where it is currently No. 1 in the rankings for both the third quarter and year-to-date tables.

UBS's share of the agency business is 16.8% for year-to-date with $32.716 billion in proceeds. For the third quarter, it conducted $11.675 billion in business with a 17.4% market share.

This impressive performance, however, does not carry over to its non-agency business. It is only fifth in the year-to-date tables with a 9.1% market share and $8.735 billion in proceeds.

The top player in the non-agency year-to-date category is Bear Stearns, with a remarkable 20.7% market share and $19.876 billion in proceeds.

For the last quarter, UBS only ranks third in the non-agency manager rankings with a 14.5% market share and $4.861 billion in proceeds. Bear Stearns, on the other hand, is No.1 for the quarter with a 17.2% market share and $5.741 billion in proceeds.

Changes on the

non-agency side

The firm's less-than-spectacular performance in the non-agency business may change in the future, however.

Previously, unlike its higher-ranking competitors, UBS Warburg did not have its own shelf for issuing non-agency deals. UBS's efforts were mostly focused on third-party transactions. However, this is going to change from now onwards.

This year, UBS filed a shelf called Mortgage Asset Securitization Transactions (MASTERS). This shelf will allow it to bring products to the marketplace that are separate from just the third party conduit business that UBS had concentrated on previously.

September was a hallmark month for UBS's non-agency, whole-loan business because during this time the first deal was issued from the MASTERS shelf. UBS will be issuing deals off the shelf every month going forward.

Getting better at the game

Aside from improving its non-agency and whole-loan business, UBS is also ramping up in other areas. It is currently reorganizing and refocusing its CDO business and working on becoming a bigger player in the asset-backed market.

UBS is also in the process of expanding its staff. The most recent hire is Evan Malik. Malik was hired as a director to work as part of the ABS, MBS and CBO sales team. He is reporting to John Baldo, executive director in charge of East Coast mortgages and asset backeds.

"What we have is a business that already worked well and what we are trying to do is make it bigger and broader," said Singh. "We believe that we will make it more robust and profitable year in and year out. This would make us more important in the market for investors and issuers and, as such, enhance the value of our already strong fixed-income franchise."

Singh believes that his team, with its improved capabilities, will be able to respond to the current unprecedented growth in the mortgage market.

"With the rates as low as they are, we expect the supply volumes in this business to be very high, approaching, maybe even exceeding, volumes of late 1998," said Singh. "We think that our team, with the new balance sheet resources, is in a perfect position to capitalize on the opportunity and increase our overall market share with clients at a time when the mortgage market is more important than ever."

Other players

After UBS and Bear Stearns, Credit Suisse First Boston came in third for the RMBS quarter rankings. CSFB had a 13.5% market share with $13.547 billion in proceeds. Salomon Smith Barney is No.4 with $11.347 billion in proceeds and a 11.3% market share. Following on SSB's heels is Lehman Brothers with a 10.9% market share and deals totaling $10.961 billion.

For the year-to-date rankings, CSFB also comes in third with a 13.6% market share and $35.590 billion, while SSB is ranked No. 4 with an 11.5% market share and $33.426 billion in quarter transactions. In fifth place is Lehman, with $31.079 billion in proceeds and a 10.7% market share.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.