Orrick Hangs Onto Top Position in Shrinking Market

Amid increased competition and decreasing municipal bond volume, Orrick Herrington & Sutcliffe LLP and Hawkins Delafield & Wood LLP maintained their positions atop bond counsel rankings through the first nine months of the year.

Rankings

Others, like Squire Patton Boggs, fell below the top 10 as of the end of the third quarter, according to data provided by Thomson Reuters.

Firms are under pressure to sustain their rankings as a result of increased competition among firms that do business as bond counsel, underwriter counsel, disclosure counsel, trustee and paying agents, as overall volume and availability in those sectors shrank from the same period in 2013, analysts said.

"The financial advisory and bond counsel business has become even more competitive as spreads continue to narrow and volume remains low," Jeffrey Lipton, head of municipal research at Oppenheimer & Co., said Tuesday. "A growing regulatory environment has also contributed to this dynamic."

Though the par amount of deals decreased for Orrick and Hawkins, the firms held onto their first and second place rankings, respectively, for the year through Sept. 30, according to the Oct. 10 Thomson data.

Orrick dominated the bond counsel business with a total par amount of $20.36 billion in 217 issues and a market share of 9.5% for the nine-month period. The pace was down from the $24.84 billion in 244 issues it handled over the same period last year when it held a market share of 10.5%.

The industry contracted from last year's nine-month totals of 8,240 deals with a total par amount of $237.58 billion to 7,252 issues totaling $215.32 billion.

Hawkins Delafield held its second place bond counsel ranking with $9.48 billion in 202 issues and a market share of 4.4%. That compared with the $11.23 billion among 224 issues it handled in the nine-month period ending Sept. 30, 2013. The firm had a market share of 4.7% at the end of the third quarter last year.

"Firms like Orrick and Hawkins Delafield are household names in the muni market with broad expertise, and market trust and are likely to hold top rankings," Lipton said.

Hawkins Delafield also maintained its first place ranking among underwriters counsel for the second year with a total of $12.34 billion par value in 102 issues and a market share of 8.3%, versus last year when it handled 91 issues at a par value of $11.16 billion and a 6.7% market share.

The overall volume handled by underwriters counsel fell to $148.96 billion in 2,472 deals from $165.59 billion in 2,841 deals at the same point last year.

Orrick, meanwhile, rose to second place among underwriters counsel from fifth place last year, handling $7.51 billion in 84 deals with a 5.0% market share, compared with $5.79 billion among 78 deals and a 3.5% market share last year.

McCall Parkhurst & Horton LLP rose by two notches and grabbed third place among bond counsel firms with $7.91 billion in total par volume in 264 deals and a 3.7% market share - even though that was down from the $9.07 billion it managed in fifth place last year with 305 deals and a market share of 3.8%.

McCall Parkhurst also helped bump Squire Patton Boggs to 11th place this year with $5.19 billion among 138 deals and a market share of 2.4%, from the third place ranking it held last year for completing $10.18 billion in 164 issues, for a market share of 4.3%.

"For some firms, a downward shift in rankings could be due to a loss of expertise in a particular area or a new focus on other areas," Lipton said. Other firms leapfrogged to the front of the bond counsel leader board, including Greenberg Traurig LLP, which advanced to 8th place from 22nd last year. The firm served as counsel for $5.52 billion among 49 deals this year and more than doubled its market share to 2.6%, which compares to last year's 48 deals for a total par value of $2.70 billion and a market share of 1.1%.

The firm of Dickinson Wright PLLC jumped to 19th place from 63rd place last year among bond counsel firms as it completed $2.71 billion among 29 deals and held a 1.3% market share, versus the same number of deals last year, but a par value of just $644.9 million and a 0.3% market share.

Other notable movement among underwriters counsel firms included a huge leap by Bryant Rabbino LLP among underwriters counsel firms as it moved into 32nd place, from the 204th place ranking it held last year.

The firm doubled the number of deals to four from two, and held a 0.7% market share, but the total par amount it handled catapulted to $1.08 billion from just $51.5 million last year when its market share rounded to zero.

B Seth Bryant, a managing partner at the firm, said its growth is client-based.

"We have been fortunate to deepen relationships with many of the major underwriters who appreciate our familiarity and relationships with New York issuers," he told The Bond Buyer on Tuesday.

Meanwhile, underwriters counsel O'Melveny & Myers fell to 22nd place from 8th as it handled five issues totaling $1.43 billion and gained a market share of 1.0%, versus 11 issues totaling $4.34 billion and a 2.6% market share at the end of the third quarter in 2013.

Similarly, The Bank of New York Mellon, US Bank, and Wells Fargo Bank, held onto first, second, and third place in the trustee rankings - even though each handled less business.

For instance, a Bank of New York Mellon completed $37.92 billion among 445 issues and grew its market share to 39.6% from 37.9%, but volume declined from the 526 issues totaling $45.01 billion it handled last year.

Citibank, meanwhile, tumbled to 27th place from 8th place, decreasing its market share to .1% from an already paltry 1.0%. The bank acted as trustee on one deal through Sept. 30 totaling $64.1 million, versus the one deal it completed last year at $1.18 billion.

The trustee industry saw $95.89 billion through the third quarter among 1,715 deals, compared to 2,018 deals totaling $118.72 billion last year.

In other rankings, US Bank NA, remained the top paying agent for the second year in a row, though its volume decreased to 1,522 issues totaling $57.21 billion with a market share of 26.5%, from among 1,731 issues totaling $68.79 billion last year when it had a market share of 25.9%.

Paying agents were active in a combined 5,747 issues totaling $177.17 billion industry wide through the third quarter, versus 6,688 issues totaling $204.68 billion previously.

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