In spite of one of the more turbulent quarters in recent memory for the municipal market, the first-quarter league tables for bond insurers, letter of credit banks, bond counsel, and trustees show little divergence from the expected.

Financial Security Assurance Inc. earned top honors among the insurers, wrapping $14.4 billion of bonds through 507 transactions, according to preliminary data from Thomson Financial. The total was enough for the stable, triple-A rated insurer to corner 53.5% of the total market. Last year, FSA was the second-busiest, behind Ambac Assurance Corp., but with the recent downgrades to many of the monolines, FSA has risen to the top.

Those problems helped boost fellow triple-A rated Assured Guaranty Corp. into the second spot in the first quarter, when the financial guarantor backed $6.9 billion worth of bonds on 202 deals. That was enough to claim 25.5% of the market.

MBIA Insurance Corp. and Ambac came in third and fourth, insuring $561.8 million and $260.8 million in the quarter, respectively.

The turbulence in bond insurer rankings and the auction-rate market also led issuers to move into variable-rate demand notes during the quarter, which increased demand for letters of credit.

Bank of America led the category, providing LOCs for 24 deals worth $1.16 billion. It was enough to secure the bank 16.4% of the market, and keep its reign as the busiest LOC provider uninterrupted from its spot atop the full year 2007 statistics.

JPMorgan Chase came in a close second in the first quarter - capturing 12.3% of the market - providing LOCs on 22 deals with total volume of $871.3 million. Rounding out the top five were Landesbank Baden-Wurttemberg, Bank of New York Mellon, and Regions Bank.

Among bond counsel, Orrick, Herrington & Sutcliffe LLP took the top spot, working on $7.78 billion of bonds through 65 deals during the first quarter. In par value, the total was 45% less than last year's first quarter, when the bond counsel was also the number one firm, working on 82 deals for a total value of $14.1 billion.

"The first quarter of 2008 was actually pretty slow for us in terms of actual deals completed, but quite busy in terms of spending a huge amount of time talking clients through the problems they are having in the auction-rate market and the insured variable-rate market," said Roger Davis, chairman of the public finance department at Orrick. "The second quarter is and will continue to be tremendously busy actually working out those problems."

Hawkins, Delafield & Wood LLP was again the second-busiest bond counsel overall, following up on the law firm's second place finish in all of 2007, advising on $6.34 billion through 69 deals. Compared to last year's first quarter, the volume of deals with Hawkins as an adviser increased.

Both firms maintained their positions for negotiated deals, with Orrick working on $7.07 billion through 48 deals and Hawkins working on $5.93 billion through 49 deals. The vast majority of both firms' business in the quarter was derived from negotiated transactions.

On the competitive side, Foster Pepper PLLC moved into first place in the quarter ended March 31, after losing the top spot to Orrick in last year's rankings. Through the first three months of 2008, Foster worked on three competitive deals for total volume of $938.1. The Seattle-based firm saw its totals boosted by its involvement in Washington's January sale, in which the state sold $921 million of debt in two series.

"A number of our clients are philosophically committed to doing competitive transactions and I think we benefit from that," said Mark Greenough, an attorney with the firm.

Meantime, McKennon, Shelton & Henn LLP sprinted into second place for competitive deals in the quarter, after finishing 29th last year, working on $870.4 million through three deals. Edwards, Angell, Palmer & Dodge LLP, ranked sixth, was the busiest law firm in terms of deals, working on 32 competitive sales for a total of $637.2 million.

Nixon Peabody LLP took the honors for top underwriters' counsel, working on $5.80 billion worth on 30 deals. McCall, Parkhurst & Horton LLP was the busiest disclosure counsel, working on $3.04 billion through five transactions.

Despite the turmoil in the market around them, the busiest trustee banks continued in much the same way that they have in past years. Bank of New York Mellon remained in first place during the first three months of 2008, working on $20.8 billion through 218 deals. It was enough to give the trustee nearly 50% of the market share, capturing a total of 45.4% of the business in the quarter. U.S. Bank NA came in second place, as they did for the entire year of 2007, having worked on $9.96 billion through 171 deals.


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