The top four underwriters of municipal bonds stayed in the same positions in 2014, even as three of the four bookrunners lost market share from the previous year.
Bank of America Merrill Lynch remained in the top spot once again in 2014, taking a 14.1% market share, or $44.4 billion, down from 14.4%, or $44.9 billion, in 2013.
JPMorgan Securities LLC was second, taking 11.9% of the market compared to 12.3% the previous year. Citi followed in third with 9.8% of the market, dropping from 11.7% in 2013.
While Morgan Stanley came in fourth for the second consecutive year, it gained 2.1% more of the market over the past year, shrinking what was a big gap between itself and the top three and finishing with $27.3 billion, or 8.7% of the market.
"We integrated our muni wealth management and institutional platforms with an objective to grow our footprint in the sector and meet the demands of our Financial Advisors, while using retail interest to provide better liquidity to our institutional clients," said Brian Wynne, co-head of public finance at Morgan Stanley.
Also seeing a marked improvement was Wells Fargo & Co, which vaulted up two spots from the previous year to land in the top five, while also gaining an additional 1.3% of the market, bringing them to 6.8% or $21.3 billion. After jumping three spots in 2013 from eight to fifth, Goldman, Sachs & Co took a few steps back in 2014, plummeting to the ninth spot. Goldman saw its market share decrease to 3.9%, or $12.3 billion, in 2014 from 5.5% or $17.2 billion in 2013.
THE YEAR IN BOND INSURANCE
Assured Guaranty was number one again in the bond insurance rankings, improving on their 2013 volume of $7.4 billion to $9.9 billion in 2014. Although their market share did decrease year over year from 61.1% in 2013 to 53.5% this year, they still control over half of the market.
"We are pleased that 2014 was a solid year of growth for Assured Guaranty. It is clear that market events over the past year have helped to refocus investors and issuers on the important benefits of Assured Guaranty bond insurance and the strength of our business model," said Robert Tucker, head of communications and investor relations at Assured.
"As a result, while new-issue volume was flat in 2014, Assured Guaranty's new issue par insured increased by $3.2 billion to over $10.7 billion, or 43%," said Tucker, speaking on all Assured-owned entities that wrapped municipal debt in 2014.
Build America Mutual was once again in second place, but saw marked improvement in principal amounts, market share and number of issues. BAM had 36.8% of the market in 2013 and finished 2014 with 40.4%. Their principal amount increased from $4.4 billion to $7.5 billion and they saw 171 more issues.
"BAM's nearly 70% growth in par insured in 2014, along with the fact that we were chosen to guarantee more than half of all insured primary market transactions for the year, proves the value that our guaranty delivers to a growing number of issuers and investors — particularly on transactions by small- and mid-sized issuers that represent our core market," said Seán McCarthy, chief executive officer at BAM. "We now serve more than 1,000 issuer-members with nearly $13 billion of debt outstanding, who benefit from lower borrowing costs and our ongoing efforts to boost market liquidity and transparency with the publication of our ODB credit reports."
Assured-owned Municipal Assurance Corp. was third for the second year in a row but did see an increase in market share, improving to 4.3% in 2014 from 1.3% in 2013.
Total issuance backed by bond insurance increased 35% to $18.6 billion in 2014 from $12 billion in 2013. Not surprisingly, the number of issues insured also increased to 1,405 from 1,025.
NEGOTIATED UNDERWRITING
The top three negotiated underwriters all lost market share over the past year, while spots four through six all gained some share. BofA Merrill was once again first, taking 12.4% of the market, or $30.2 billion.
JPMorgan and Citi flip-flopped positions in 2014, as JPMorgan moved up to second with $26.4 billion or 10.8% of the market, down from their 11.3% in 2013. Citi dropped from second to third, hauling in $22.3 billion or 9.2% of the market, down from their share of 11.6% in 2013.
Morgan Stanley, RBC Capital Markets and Wells Fargo all gained more of the market then they previously had in 2013 — gaining 1.3%, 1% and 1.7% — bringing their total market share to 8.6%, 7.8% and 6.8%, respectively.
Morgan Stanley and RBC held their positions at fourth and fifth, while Wells Fargo jumped up to sixth after being in eighth place in 2013. RBC senior managed 532 transactions in 2014 — all negotiated — more than any underwriter ranked ahead of them in par volume.
COMPETITIVE UNDERWRITING
The biggest mover in the long-term competitive field was Morgan Stanley, who moved up to the fourth spot in 2014 from sixth in the previous year. Over the past year, they saw their market share increase from 4.3% to 9.0%.
"We purchased a lot of mid-sized competitive deals this year, seeing it as an opportunity to distribute bonds to retail groups and increase the diversity of products we can offer these clients," said Wynne.
BofA Merrill retained its top spot with a volume of $14.3 billion, well ahead of JPMorgan, which stayed in second with $11.2 billion. Citi stayed put at third with $8.7 billion and then the aforementioned Morgan Stanley with $6.5 billion, up from their 2013 volume of $3 billion.
Robert W. Baird & Co. was the only company in the top 15 to have more than 245 issues in 2014. They also had the most offerings in 2013 and dropped from fourth in 2013 to fifth this year. Although they are ahead of fifth place Wells Fargo in volume, they both have the same amount of the market with 6.6%.
CO-MANAGER RANKINGS
Wells Fargo moved into the top co-manager spot in 2014 after finishing second in 2013. BofA Merrill dropped from first to second. Both finished 2014 down from their 2013 numbers, as Wells Fargo finished with $10.1 billion in 2014 compared to $11.3 billion the previous year and BofA Merrill finished 2014 with $9.2 billion, down from their volume of $12.7 billion in 2013.
JPMorgan and Citi improved from their 2013 rankings, as JPMorgan went from fourth to third and Citi from sixth to fourth. Raymond James stayed put in the fifth spot, finishing 2014 with $8.8 billion.
The biggest and most impressive movement came from Oppenheimer & Co., which ranked 26 in 2013 and vaulted all the way up to ninth spot in 2014. Over the past year, they had an increase of 458 issues and saw their volume soar to $8 billion in 2014 from $2.3 billion in 2013. They now have the same market share as Morgan Stanley and RBC at 2.6%, up from their 0.8% in 2013.
BAIRD LEADS IN $10M & UNDER
Robert W. Baird was first again in the rankings for top bookrunner in deals $10 million and under, owning 9.5% of the market, or $2.3 billion. Raymond James leaped up into second place after finishing fifth in 2013. They saw their market share increase to 6.7% from 5.2% and par amount to $1.6 billion from $1.2 billion.
For negotiated deals $10 million and under, RBC led the way for the second consecutive year. Stifel Nicolaus & Co. came in second once again but saw their market share decrease to 7.2% in 2014 from 8.3% in 2013. Baird jumped from fifth to number three, from 2013 to 2014, while seeing their market share increase to 6.5% or $933 million from 5.3% or $772 million.
In the competitive $10 million and under category, Baird ranked first with a par amount total of $1.4 billion, slightly down from their 2013 total of $1.5 billion, in which they were also ranked first.
Raymond James moved up from third to second, increasing their market share to 8.9% in 2014 from 7.1% in 2013. FTN Financial Capital Markets made the biggest leap, going from seventh to third and seeing their market share balloon to 6.8% in 2014 from 4.7% in 2013.
