Sell Side

Orrick Retakes Top Spot

Thomson Reuters’ legal rankings are looking a bit more traditional in the second quarter after an 11-year low in first-quarter issuance skewed the numbers across most categories.

Top Bond Counsel

Orrick, Herrington & Sutcliffe LLP reclaimed its top spot among bond counsel at the half-year mark. The firm worked on 157 deals with a net par of $8.8 billion from January to June, capturing 7.7% of all new issues.

The figures reflect that the cutback in new supply is having a clear impact — this time last year, Orrick had completed $25.1 billion of deals.

One major reason the firm’s numbers are down by a third: its biggest client, California, hasn’t issued general obligation debt this year, while in the preceding 12 months it brought nearly $15 billion to market.

State officials did recently suggest plans to sell upwards of $5 billion in notes this summer, with longer-term financing coming later in the year.

Roger Davis, head of public finance at Orrick, said the first quarter was the low point in the national issuance cycle, with second-quarter issuance picking up more than 40%.

“If interest rates remain low, we’ll continue to see improvement,” he said. “There are also an increasing number of private placements and direct lending getting done, and that isn’t captured in those statistics.”

Anecdotal evidence suggests volume is about 10% higher than league tables suggest if one takes those two details into account.

“It’s an increasing factor in the market but it’s increasing from next to nothing,” Davis said. “Some banks are pushing the product pretty hard. Simplicity is pretty attractive to today’s issuers who have got a lot of distractions to deal with.”

Kutak Rock LLP placed second with a 5.6% market share. The Omaha-based firm worked on 76 issues worth $6.36 billion ¯ just $237 million less than in the same six-month period of 2010, when it ranked sixth. More than two-thirds of Kutak’s business came in the first quarter when it snatched the No. 1 ranking thanks to its work on the $3.7 billion taxable pension issue for Illinois, the largest deal to date this year.

Hawkins Delafield & Wood placed third in the first half of the year, one spot below its ranking in 2010.

The firm struggled in the first quarter as it worked on just $855 million of deals, ranking it 13th, but from April to June it added $4.6 billion to the league tables, giving it a 6.8% share of new deals.

Among disclosure counsel, Chapman & Cutler hung on to the top spot through June despite ranking 26th for the second quarter. The firm seized 13.3% of all issues, by volume, in the six-month period, but 96% of the $4.2 billion of deals it worked on came from the first three months. Like Kutak, its rankings were bumped much higher thanks to its work on Illinois’ $3.7 billion pension issue.

Orrick grabbed the top spot for the second quarter and the No. 2 spot for the six-month period. The firm was disclosure counsel on $2.68 billion of new debt in the second quarter, good for a 14.5% share of the market.

Nixon Peabody took the third spot for the first half of the year after ranking 16th in the first quarter.

A notable movement among disclosure counsel in the second quarter was Tallahassee, Fla.-based Bryant Miller Olive. It worked on nine deals totaling $1 billion in the second quarter, helping it place fourth in the quarter and ninth for the six-month period nationwide.

A $900 million deal in late June from the Citizens Property Insurance Corp. was a major boon to its rankings, but Bryant Miller isn’t a one-hit wonder, according to Duane Draper, co-chairman of public finance.

“Our firm has consistently been ranked the number one disclosure counsel firm in the Southeast, year after year, on a per-issue or a volume basis,” he said. “We have a broad base of medium-size local government clients ¯ we’re sort of a pioneer in that area in this part of the country.”

Nationally, the firm ranked eighth in 2010. It has traditionally done the bulk of its business in the Southeast but has made a push for a national presence in the last few years with the opening of an office in Washington, DC.

Among underwriter’s counsel, Fulbright & Jaworski came just ahead of Orrick in the second quarter with 69 deals worth $3.17 billion. Last year it ranked seventh.

But Orrick nabbed the top spot among in the June to January period, with 81 issues totaling $5.18 billion to reflect a 6.6% market share.

Cincinnati-based Peck Shaffer & Williams, which ranked 16th nationally last year, is in second place so far with a 6% market share.

“Even in the down market our clients are looking for the opportunities to get their financings done and meet their obligations to their residents,” said Dirk Bedarff, managing partner at Peck Shaffer. “We’ve been able to work with them even in a tougher economic environment, and that’s paid off, viewed in the context of the overall market.”

The firm was underwriter’s counsel on 26 deals worth $4.67 billion, more than the $4.35 billion it completed in the previous 12 months. Can you guess the reason? If you said Illinois’ $3.7 billion pension deal, you win.

Winston & Strawn ranked third in the category. Unlike many of its competitors, the firm’s $4.49 billion of issues was pretty even between the two quarters: it completed $2.29 billion in the second quarter, up from $2.2 billion in the first quarter.

Assured Guaranty Ltd., the only bond insurer with high enough ratings to continue writing new policies, wrapped $6.4 billion of new product in the first half of the year. Its penetration rate was 5.4%, including a 6% rate in the most recent quarter.

Its muni-only platform, Assured Guaranty Municipal Corp., performed all but 30 of the new transactions, wrapping 512 deals worth $6.167 billion.

The letter-of-credit world has been dominated by JPMorgan in 2011 even though it didn’t write a single deal until April. It has a 26.7% market share with 15 LOCs worth $707.5 million. Wells Fargo was close behind with a 23.1% market share, following Bank of America Merrill Lynch’s 15.1% share.

Information from the league tables is limited, though, as it doesn’t reflect expiring LOCs that are renewed in the secondary market.

The Bank of New York Mellon easily retained the top spot among trustees. It was trustee for 361 issues worth $24.9 billion, giving it a 41.7% share of the industry total.

US Bank and Wells Fargo continued in the second and third spots, acting as trustee on $15.6 billion and $7.6 billion of deals, respectively. Together, the top three account for 80.7% of the market.


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