Bank of America Merrill Lynch, Public Financial Management and the State of California extended leads in the league tables during the third quarter, as the municipal bond industry benefited from a surge in supply.
BAML closed the quarter with a par amount of $15.75 billion in 120 issues, or 14.5% market share. Through the first nine months of the year, the firm finished at $49.91 billion in 408 deals, for a 15.4% market share, up from $39.10 billion in 368 deals or 13% market share in the first nine months of 2015, according to data from Thomson Reuters.
Although BAML didn't run the books on any transactions larger than $1 billion in the quarter, the firm did manage 42 deals between the $100 million and $500 million range and a handful of deals above $500 million. Some of the biggest deals in terms of dollar amount were: $744.375 million for Miami-Dade County, $728.415 million for the Commonwealth of Massachusetts, $631.33 million for the Central Florida Expressway Authority, $600.065 million for the Texas Water Development Board and $544.26 million for the city of San Antonio.
Overall, the top 10 firms combined for a total par amount of $311.46 billion in 8,987 transactions after three quarters, compared to $288.86 billion in 8,935 transactions during the same period last year.
Citi ranked third in the quarter with $10.34 billion in 135 deals. For the year so far, the firm is in second place with $37.60 billion in 428 deals or 11.6% market share. For comparison, during the first nine months of last year the firm was responsible for $35.03 billion in 392 issues.
"The third quarter ended on a surge in new issue supply, which was backed by a record setting August," said Joseph Geraci, co-head of municipal markets for Citi. "With the uptick in rates, we have seen an increase in retail participation, and in general strong international interest in our asset class."
JPMorgan finished in second for the third quarter with $10.71 billion and third place through three quarters with a par amount written of $32.51 billion in 311 transactions. That equated to a 10.1% market share, down from the $34.10 billion in 319 transactions during the same period last year.
"It was a strong quarter for us and we are very appreciative of the many issuers that put their trust in JPMorgan to lead their important financings," said Jamison Feheley, JPM's head of public finance banking. "We are also very proud of the many value-added solutions we were able to deliver for clients this quarter that aren't reflected in the traditional league table."
Feheley said long interest rates have risen roughly 50 basis points over the course of the third quarter and early fourth quarter, as trend that could have negative implications for refunding volume in the months ahead.
Morgan Stanley finished both the third quarter alone and year-to-date ranking in fourth place, with $8.71 billion and $23.45 billion, with close to the same total amount they had at this time last year.
Rounding out the top five for the year so far is Wells Fargo, finishing the first three quarters of the year with $20.85 billion, up from $17.78 billion a year earlier. Wells had a par amount underwritten of $5.91 billion for the third quarter alone.
RBC Capital Markets was sixth for both the quarter and so far this year, with a par amount of $6.28 billion for the quarter and $17.40 billion for the year. Stifel was ninth for the third quarter but lands in seventh for the year thus far with $13.82 billion in 686 transactions – the most deals by any firm.
The biggest mover of the quarter was Goldman, Sachs, which jumped into the top five for the quarter with $6.84 billion in 32 deals and moved up for the year into eighth place with $13.12 billion, despite having the least deals with 71.
Raymond James is ninth for the year so far with $13.01 billion and Barclays rounds out the top 10 with $12.78 billion.
Financial Advisors
Public Financial Management was once again atop the league tables for financial advisors, increasing its par amount and market share from the same time last year. PFM finished the first three quarters with $57.59 billion or 21.1% market share, up from the $48.61 billion and 19.5% market share from the first nine months of 2015. For the third quarter alone, PFM finished with $17.91 billion, or $800 million more than the second place firm.
"PFM's clients, by and large, are finding some confidence in their economic trends and are using creative means to invest in much-needed infrastructure to transform their communities, including through the issuance of debt," said John Bonow, managing director and CEO of PFM. "Of course, the combination of very low borrowing rates and sufficiently high short-term investment rates has made several prior bond issues economically attractive to refinance. Those conditions have buoyed overall transaction volume across our client base and the industry."
PFM has expanded recently, acquiring A.C. Advisory in October and Western Financial Group in September. Bonow said PFM is constantly on the lookout for the best finance professionals who share the firm's passion to serve clients.
Hilltop Securities moved up to second place for the year so far with $28.38 billion after also finishing in second for the third quarter alone with $9.77 billion.
"We have continued to grow and now have 30 offices nationally and our total emphasis on client service by providing all the different services that a client needs goes a long way," said Jack Addams, vice chairman, manager of public finance for Hilltop Securities. "Our clients having faith in us says it all, we appreciate them and they continue to hire us as well as adding new clients."
Public Resources Advisory Group finished in third for the quarter with $8.45 billion and third for the year so far with $25.81 billion. Acacia Financial Group is in fourth for the year with $11.74 billion and Kaufman Hall & Associates Inc. is now fifth for the year with $6.33 billion.
Top Issuers
The state of California was the leading issuer after the first nine months of the year, with $7.27 billion of volume.
"California has saved nearly $1.3 billion from bond refunding so far this year and over $4.2 billion over the course of the past 20 months," California State Treasurer John Chiang told The Bond Buyer earlier this week. "These recent transactions mean that California taxpayers and other stakeholders will spend less on debt service and can redirect the savings to education, public health programs, roads and other critical needs."
The New York City Transitional Finance Authority ranked second with $4.75 billion. The New York Metropolitan Transportation Authority is a close third with $4.55 billion, followed by the Dormitory Authority of the State of New York with $4.06 billion and the Commonwealth of Massachusetts rounds with $3.84 billion.
