Sell Side

Bank of America Merrill Is Out on Top Again

The municipal underwriting business at Bank of America Merrill Lynch started 2012 in much the same manner as it started 2011: on top.

Quarterly Tables

The bank was the leading overall book-runner among muni bond underwriters through the first quarter of 2012, narrowly edging out JPMorgan, which finished in first place for all of 2011.

While the two firms finished neck-and-neck as negotiated managers, B of A pulled ahead when it boosted its market share considerably in the competitive space for the first quarter.

The bank led 106 issues totaling $10.96 billion by par amount, giving it almost a 14% market share, according to Thomsen Reuters numbers. During the first quarter of 2011, it led on 65 issues for a total of $6.47 billion, a 13.8% market share.

The muni market saw a much healthier first quarter than it did in 2011, with a 63.5% uptick in total long-term volume.

Muni yields lingered around historical lows, prompting more issuers to come to market for refinancings.

One year earlier, the market endured a difficult period, marked by a large sell-off, widespread fears of a rash of muni defaults and hemorrhaging muni bond mutual funds. By March, the market had started to stabilize.

JPMorgan also saw a strong first quarter, placing second among all managers, as it did in the first quarter of 2011 before finishing the year as number one.

The investment bank in the first quarter managed $10.22 billion by par amount on 76 issues, a 13% market share. That compares with the $5.48 billion it managed during the same period in 2011 with 67 deals, or an 11.7% market share.

JPMorgan in the last quarter of 2011 held the top ranking with $13.54 billion and 14.7% of the business, versus B of A, which did almost $12.10 billion worth of deals, for a 13.1% market share.

Among the rankings for all senior managers, the top eight places remained little changed in the first quarter compared to 2011, and included the same firms overall. Loop Capital Markets saw the largest move. It dropped to 50th place from ninth, participating in two loans for $117.7 million from $1.63 billion on three deals.

Bank of America Merrill and JPMorgan also traded spots in all but one of the other manager categories. JPMorgan led all senior managers in negotiated deals in the first three months of the year, jumping from fifth place in the first quarter of 2011.

It participated in $7.83 billion on 48 issues, a 12.5% market share. That compared with $2.29 billion on 30 deals in the first quarter of 2011.

B of A worked on 72 issues for $7.36 billion, an 11.7% market share. Through the first three months of 2011, it paced the negotiated group with $4.43 billion by par amount on 49 issues for a 13% market share.

In the competitive space, it was B of A’s turn to shine, reeling off a 22.4% market share on 34 deals worth $3.60 billion. It was a sizable increase from the first three months of 2011, when the bank grabbed a 16% market share on 16 deals worth $2.04 billion, enough for second place.

B of A declined to comment.

JPMorgan, ranked number one in competitive transactions in the first quarter of 2011, switched positions with Bank of America the past three months to start this year.

It worked on 28 deals, worth $2.39 billion, a 14.9% market share. That compares with the 36 deals for $3.19 billion it did in the first quarter of 2011, giving it a 25% market share.

RBC Capital Markets, which ranked seventh among senior managers for all issues, moved up two positions to capture the top spot among underwriters of small issues.

Through the first three months of the year the bank worked on 99 issues worth $686 million, an 8.8% market share. That compares with 51 deals it did over the same period in 2011 worth $281.3 million, a 6.6% market share.

RBC outpaced Robert W. Baird & Co., which wore the crown over the same period in 2011. Baird participated in $633.8 million of transactions in 141 deals garnering an 8.1% market share in the first quarter of 2012, against $385 million on 97 issues and a 9.1% market share over the same period in 2011.

RBC Capital will continue its strategy for a solid, middle-market platform, according to Mark Maroney, head of U.S. municipal capital markets for the firm.

“RBC is also forging ahead with its aim to build on the gains it has made with larger issues,” he said. “We continue to have a focus and strategy to increase our presence in the large-issue part of the market.”

Wells Fargo & Co. took the pole position among co-managers. Through three months in 2012, the bank traded positions with Bank of America Merrill, which held the top spot through three quarters in 2011.

Public Financial Management once again dominated the rankings for advisors, the same position it held in the first and last quarters of 2011.

Through March 2012, PFM advised on $10.13 billion in 221 issues, a 16.6% market share. That compares with $5.43 billion, on 124 deals, a 15.8% market share through the first quarter of 2011. PFM also holds the number-one advisor position for the quarter among negotiated, competitive and small issues.

“We try to do things our clients appreciate,” said John White, chairman of PFM Group. “And I guess if we’re doing this well in the rankings, it’s a vote of confidence by them that we’re giving them the services that they need.”

The Commonwealth of Puerto Rico took the top issuer ranking for the quarter with two deals worth $2.73 billion and a 3.5% market share. The Puerto Rico Aqueduct & Sewer Authority placed second, with almost $2.10 billion on two issues.


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