Bank of America Merrill Lynch extended its No. 1 ranking among municipal underwriters as the biggest firms battled for deals in a shrinking market for new issuance.

Public Financial Management Inc. led the financial advisor league table through Sept. 30 of 2017, while the state of California was the largest municipal issuer, according to Thomson Reuters data.

The top 11 underwriters have combined for $271.77 billion in 7,593 transactions so far in 2017, down from the $323.77 billion in 9,499 deals in the first nine months of 2016. RBC Capital Markets and Goldman Sachs were the only firms credited with a higher par amount than in the same period last year.

“Our market share increases over the past year point to the success of our platform’s diversified approach to infrastructure finance,” said Chris Hamel, head of public finance, RBC. “We are appreciative of our clients for entrusting their financings to RBC and we look forward to continuing to serve them as well as further expanding our involvement in U.S. municipal market.”

BAML underwrote $16.44 billion for first place in the third quarter. That brought BAML's year-to-date total to $43.43 billion or 16% market share, up from 15.2% at this point last year. The largest deals it ran the books on in the third quarter included the Bay Area toll Authority, Calif.’s $1.40 billion, New York City’s $898 million and New York City Transitional Finance Authority’s $857 million.

Citi underwrote $10.72 billion in the third quarter and so far this year accounted for a par amount of $34.76 billion or 12.8% market share. Citi was lead-manager on Pennsylvania Turnpike Commission’s $795.9 million, Port of Seattle’s $688.2 million and New York Metropolitan Transportation Authority’s $662 million.

JPMorgan came in fourth place for the quarter with $6.36 billion and is in third so far this year with $24.10 billion, or 8.9% market share, respectively.

JPM’s biggest deals of the quarter were Ohio’s $818.7 million, Chicago Board of Education’s $500 million and Pennsylvania Turnpike Commission’s $498.9 million.

Morgan Stanley finished third for the quarter with $6.45 billion and fourth for the year so far with $20.75 billion or 7.6% market share. The firm saw a good chunk of its par amount this quarter come from one deal – Texas Water Development Board’s $1.06 billion.

The firm is "disappointed in volume year-to-date -- we expected new-money to be a bit higher," said Brian Wynne, head of public finance at Morgan Stanley. "Overall, we are satisfied, there are some quarters when clients do more business and some where they are less active.

"Our secondary trading and market share is up significantly, something that we have been focused on the past few years," he said, "but this year it is really paying dividends [with the lower volume in the primary market]. We have also hired new people and formed a new group, the capital solutions group, where we can look at different ways to help out clients outside of a typical bond deal.”

Although RBC was eighth for the quarter with $4.05 billion, it is in fifth place for the year – up one spot from a year ago. So far this year, RBC has a par amount of $17.45 billion – compared with $17.31 billion a year ago, with its market share also climbing to 6.4% from 5.4%.

Goldman saw the biggest leap, rising to sixth place for the year so far, from eighth at this point last year. Goldman has underwritten $15.17 billion, compared with $13.12 billion.

Wells Fargo finished sixth for the quarter, dropping two spots from a year earlier, as some issuers suspended doing deals with the firm following its fake account scandal. Wells has a par amount of $14.49 billion for the first nine months of this year, compared with$21.08 billion in the same period last year.

Stifel is next with $13.21 billion so far this year, and was responsible for more transactions than anyone else on the list with 623. Raymond James is next with $10.38, followed by Piper Jaffray with $10.36 billion and Barclays rounds out the list with $8.26 billion.

Financial Advisors
Public Financial Management finished three quarters of the year with a par amount of $41.42 billion in 709 deals, good for an 18% market share. That compares with $59.43 billion in 957 deals or 21.26% market share during the same time period of 2016.

“Reflecting our goal of being the preeminent advisor to governments and non-profits, PFM’s clients range from local municipalities and school districts to large utilities and transportation systems to states and state agencies to multi-facility health and higher education networks," said John Bonow, chief executive officer and managing director for the PFM Group.

“When market volumes fluctuate overall, we find that the number and breadth of our clients help us maintain a high service level and relatively consistent transaction levels," he said. "However, our market share numbers are more a function of the trust that our clients place in our relationship and advice. We help them undertake appropriate and efficient transactions in various market environments.”

Public Resources Advisory Group ranks second with $35.21 billion with 15.3% market share and Hilltop Securities is third for the year so far with $25.45 billion or 11.1% market share. Acacia Financial Group held its spot in fourth, even as its par amount decreased to $9.04 billion from $11.90 billion.

KNN moved up to fifth from eighth with $6.81 billion, up from $5.66 billion. Piper is next with $5.33 billion, followed by Kaufman Hall and Associates Inc., with $5.06 billion. Lamont Financial Services saw the biggest leap, going to eighth with $3.52 billion from 20th with $2.59 billion. Rounding out the top 10 are Ponder and Co., with $3.14 billion and RBC with $2.60 billion.

Municipal Issuers
California remains the top municipal issuer. The Golden State leads the ranking with a par amount of $7.18 billion in eight deals. The New York City Transitional Finance Authority is in second with $5.35 billion followed by the Dormitory Authority of the State of New York with $4.99 billion. The California Health Facilities Finance Authority is fourth with $3.33 billion and the Bay Area Toll Authority is fifth with $2.81 billion.

Rounding out the top 10 were: New York City with $2.59 billion; Chicago with $2.57 billion; State of Maryland with $2.48 billion; Hudson Yards Infrastructure Corp. with $2.14 billion; and the State of Wisconsin with $2.11 billion.

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Aaron Weitzman

Aaron Weitzman

Aaron Weitzman is a markets reporter for The Bond Buyer, focusing on the sell side of the municipal bond market.