BRIDGE Data Shows Trend to Bigger Deals in Corporate Bonds; Salomon Smith Barney Remains Leading Issuer in Strong Investment Grade Market This Year.Business Editors NEW YORK--(BUSINESS WIRE)--Dec. 1, 2000 Fewer but bigger is the theme for new deals in the corporate bond market this year -- and new information compiled by BRIDGE shows just how strong the trend is. Investment-grade investment-grade Of, relating to, or being a bond suitable for purchase by institutions under the prudent man rule. Investment-grade is restricted to those bonds graded BBB and above by Standard & Poor's and graded Baa3 and above by Moody's. issuance is running significantly ahead of last year's pace, the figures show. But the total number of deals brought to market is down substantially. As a result, the average size of new deals has shot up 45% to $501.9 million for the first 11 months of this year compared to $347.2 million for the same period of 1999, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the BRIDGE data. "Investors are demanding big, easy-to-trade bond offerings," said Peter Heap In programming, it refers to a common pool of memory that is available to the program. The management of the heap is either done by the applications themselves, allocating and deallocating memory as required, or by the operating system or other system program. 1. , Chief US Credit Correspondent for BridgeNews. "Companies and investment banks The following is a list of investment banks Financial conglomerates Large financial-services conglomerates combine commercial banking and investment banking, and sometimes insurance. have responded by putting together giant debt sales. Frequently now they are more than a billion dollars in size. "But at the same time, investors are shunning smaller deals. Companies on the margins, those who lack well known names, who have any weakness in their finances, or even just those who only need relatively small amounts of money are finding the bond market an unfriendly place." So far this year, $304.2 billion of investment-grade deals have come to market, according to the BRIDGE data, compiled as part of the BRIDGE rankings of bond underwriters. That's 9.9% more than the $276.7 billion in the same period of last year. But the number of deals has declined 24.0% to 606 from 797 in the same period of 1999. The trend is also visible in the medium-term note Medium-term note (MTN) A corporate debt instrument that is continuously offered to investors over a period of time by an agent of the issuer. Investors can select from maturity bands of: 9 months to 1 year, more than 1 year to 18 months, more than 18 months to 2 years, etc. market, traditionally the place where companies turn to borrow small amounts of money on a regular basis. While issuance volume has climbed 38.2% to $205.7 billion so far this year from $148.9 billion a year earlier, the number of deals has held almost steady at 2008 versus 2080 in 1999, according to BRIDGE figures. Within the overall figures, Salomon Noun 1. Salomon - American financier and American Revolutionary War patriot who helped fund the army during the American Revolution (1740?-1785) Haym Salomon Smith Barney Smith Barney is a division of Citigroup Global Capital Markets Inc., a global, full-service financial firm, that provides brokerage, investment banking and asset management services to corporations, governments and individuals around the world. remains the top underwriter underwriter n. a company or person which/who underwrites an insurance policy, issue of corporate securities, business, or project. (See: underwrite) UNDERWRITER, insurances. One who signs a policy of insurance, by which he becomes an insurer. of investment-grade corporate debt so far this year. But Lehman Brothers Lehman Brothers Holdings Inc. (NYSE: LEH), founded in 1850, is a diversified, global financial services firm. It is a participant in investment banking, equity and fixed income sales, research and trading, investment management, private equity, and private banking. was first placed in November, partly thanks to borrowing by California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). utilities needing money to pay for high electricity costs in the state. Among its deals, Lehman jointly lead managed with Chase Securities a $1.3 billion sale for Southern California Edison Southern California Edison (or SCE Corp), the largest subsidiary of Edison International (NYSE: EIX), is the primary electricity supply company for much of Southern California. It provides 11 million people with electricity. . Lehman was also sole lead on a $680 million five-year note for Pacific Gas & Electric which priced in late October and settled in November. (A $670 million floating-rate tranche Tranche One of several related securities offered at the same time. Tranches from the same offering usually have different risk, reward, and/or maturity characteristics. tranche A class of bonds. is excluded because the maturity is less than the 13-month cut-off cut-off Anesthesiology The point at which elongation of the carbon chain of the 1-alkanol family of anesthetics results in a precipitous drop in the anesthetic potential of these agents–eg, at > 12 carbons in length, there is little anesthetic activity, for inclusion in the Bridge rankings.) Also helping Lehman was a pair of $750 million deals for General Electric Capital Corp. Lehman jointly led a five-year note with Goldman, Sachs & Co. and a 10-year note with Merrill Lynch Merrill Lynch & Co., Inc. (NYSE: MER TYO: 8675 ), through its subsidiaries and affiliates, provides capital markets services, investment banking and advisory services, wealth management, asset management, insurance, banking and related products and services on a global basis. & Co. Overall for the month, Lehman brought to market $3.87 billion of debt out of a total of $24.90 billion.
Following are the November BRIDGE Rankings:
(All figures are year to date)
INVESTMENT GRADE
November 1999
Dealer Amount ($ mln) No. Deals Rank Amount No.
------ -------------- --------- ---- ------ ---
1. Salomon SB 40188.99 136 1 48510.60 198
2. Goldman Sachs 35556.62 106 4 31080.10 122
3. Morgan Stanley DW 31976.25 99 3 31965.50 133
4. Merrill Lynch 31488.71 108 2 43853.70 170
5. Lehman Brothers 31475.03 80 7 23038.80 91
Total 304145.94 606 276732.80 797
AGENCY DEBT
Dealer Amount ($ mln) No. Deals
------ -------------- ---------
1. Merrill Lynch 43622.02 256
2. Goldman Sachs 40410.18 291
3. Salomon 28770.88 224
4. Lehman Brothers 26552.14 109
5. JP Morgan 24529.17 123
Total 328336.69 3462
HIGH YIELD
November 1999
Dealer Amount ($ mln) No. Deals Rank Amount No.
------ -------------- --------- ---- ------ ---
1. CS First Boston 9419.70 38 1 21101.90 93
2. Goldman Sachs 5808.90 22 4 10087.90 41
3. Salomon SB 5277.60 27 2 12920.60 55
4. Morgan Stanley DW 5248.67 20 5 6369.00 32
5. Chase Securities 3271.48 18 3 11218.60 46
Total 43305.15 146 89477.40 365
CONVERTIBLES
November 1999
Dealer Amount ($ mln) No. Deals Rank Amount No.
------ -------------- --------- ---- ------ ---
1. Merrill Lynch 15840.60 34 1 7411.40 21
2. Goldman Sachs 12615.80 39 4 5387.40 23
3. CS First Boston 9442.10 31 5 4621.70 21
4. Morgan Stanley DW 8384.70 33 2 6432.70 32
5. Salomon SB 5031.00 19 3 6160.00 23
Total 61963.30 178 35178.30 129
MEDIUM-TERM NOTES
November 1999
Dealer ($ mln) No. Deals Rank Amount No.
------ ------- --------- ---- ----- ---
1. Merrill Lynch 40322.00 364 1 22947.16 389
2. Salomon Smith Barney 27679.42 264 2 19670.90 239
3. Chase Securities 21185.68 164 4 12780.04 143
4. Morgan Stanley DW 19028.08 166 7 10226.99 163
5. Lehman Brothers 13831.53 94 3 13926.45 132
Total 205727.03 2008 148864.55 2080
MEDIUM-TERM NOTE ISSUERS
November 1999
Issuer Amount ($mln) No. Deals Rank ($mln) No.
------ ------------- --------- ---- ------ ---
1.Goldman Sachs Group Inc. 23455.21 99 7 5777.14 48
2.Merrill Lynch & Co. Inc. 19578.38 157 8 5446.42 77
3.Morgan Stanley Dean Witter 9622.63 60 17 2608.74 39
4.General Elec Cap Corp 8555.00 29 1 11516.03 76
5.Ford Motor Credit Co. 8535.00 17 2 10805.00 18
BANK NOTES
November 1999
Dealer ($ mln) No. Deals Rank Amount No.
------ ------- --------- ---- ------ ---
1.Salomon Smith Barney 13455.58 87 1 13064.98 90
2.Banc of America 12878.64 110 6 6015.49 48
3.Chase Securities 9784.16 71 2 9676.06 98
4.First Union 7111.73 66 4 7155.03 58
5.Merrill Lynch 6355.42 65 3 8025.81 60
Total 79009.44 588 70529.94 563
ASSET-BACKED SECURITIES
November 1999
Dealer Amount ($ mln) No. Deals Rank Amount No.
------ -------------- --------- ---- ------ ---
1.Salomon SB 38365.50 51 1 27042.80 40
2.Chase Securities 19627.90 31 11 7820.30 16
3.Lehman Brothers 19165.00 23 3 24306.30 42
4.CS First Boston 16388.10 28 2 26926.50 46
5.Deutsche Banc AB 15387.50 21 15 2924.20 7
Total 202657.20 288 183400.00 319
ASSET-BACKED SECURITIES COLLATERAL
November 1999
Collateral Amount ($mln) No. Share (%) Rank ($mln) No.Share(%)
---------- ------------- --- --------- ---- ------ --- -------
1.Auto Loans 68200.90 65 33.65 2 50270.60 55 26.30
2.Home Equity 50921.60 105 25.13 1 55641.00 137 29.11
3.Credit Cards 44103.70 65 21.76 3 35995.70 58 18.83
4.Student Loans 13468.10 10 6.65 7 5628.30 7 2.94
5.Equipment 8140.20 14 4.02 6 9086.30 16 4.75
6.Manuf. Housing 8068.20 17 3.98 5 12824.30 23 6.71
7.Other 6274.90 12 3.10 4 17911.50 18 9.37
Total 202657.20 288 191149.20 319
AGENCY MORTGAGE-BACKED SECURITIES
November 1999
Dealer Amount ($ mln) No. Deals Rank Amount No.
------ -------------- --------- ---- ------ ---
1.CS First Boston 15237.20 32 1 39462.60 71
2.Lehman Brothers 14657.10 25 3 34460.30 64
3.Greenwich 13724.80 26 7 20487.50 34
4.Bear Stearns 13622.60 24 5 26573.00 50
5.Salomon SB 11659.40 27 2 35454.90 45
Total 103017.30 225 249610.50 466
For full tables or more information about the BRIDGE Rankings, contact Deanna Masella at (212)372-7346 or e-mail dmasella@bridge.com. BRIDGE Rankings are compiled as follows: Criteria common to investment-grade, agencies, high yield, convertibles, medium-term notes and bank notes: -- The tables include all dollar-denominated underwritten offerings sold in the US as public or Rule 144A deals reported to BridgeNews or Bridge Fixed Income Services. -- Amounts are based on the total sales price (face amount multiplied by offering price). The full amount is credited to the bookrunner or lead manager. For multiple leads, the total value is divided equally among joint bookrunners and joint lead managers. -- Each tranche is counted as a separate deal. -- Offerings are included in the time period in which they settle. Common criteria (Common Criteria for Information Technology Security) An international standard process for defining security objectives and for evaluating compliance with those objectives. The Common Criteria have largely replaced the Trusted Computer Security Evaluation Criteria (TCSEC), the Canadian for investment grade, agencies and high yield: -- Convertibles, preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. , trust preferreds, capital securities and retail-oriented deals are excluded. -- Issues maturing in 397 days or less are excluded. Common criteria for investment grade and high yield: -- Fixed-rate medium-term notes with a face value of more than $100 million are included. All other MTNs are excluded. -- Sovereign issues are excluded. -- Passthroughs, collateral trusts and equipment trust certificates are included. Investment-grade only: -- Deals rated investment-grade by either or both of Standard & Poor's and Moody's Investors Service Moody's Investors Service A leading global credit rating, research and risk analysis firm. Moody's Investors Service A leading firm engaged in credit rating, risk analysis, and research of fixed-income securities and their issuers. are included. High-yield only: -- Deals rated investment-grade by either Standard & Poor's or Moody's Investors Service are excluded but deals not rated by both are included. -- Units made up of a bond and warrant are included; other units are excluded. Agencies only: -- For FHLB FHLB Federal Home Loan Bank Tap issues, the actual amounts underwritten are credited to managers. Convertibles only: -- Bonds are included that convert into the issuer's or another company's stock or the cash equivalent; bonds that convert into other bonds are excluded. -- Units made up of a bond and stock are included; units made up of a bond and warrants are excluded. -- Preferred issues are included using the same criteria as for bonds. -- Issues maturing in 397 days or less are excluded. Medium-term notes only: -- Sovereign issues and agencies are excluded. Bank notes only: -- Notes with a maturity of less than 1 year are excluded (threshold is 360 days or more). Asset-backed and agency mortgage-backed securities Mortgage-backed securities (MSBs) Securities backed by a pool of mortgage loans. only: -- The tables include all dollar-denominated underwritten offerings Underwritten offering A purchase and sale. sold in the US as public deals reported to BridgeNews or Bridge Fixed Income Services. -- Offerings are included in the time period in which they settle. -- Deal sizes are face amount. The full amount is credited to the bookrunner bookrunner See lead underwriter. or lead manager. For multiple leads, the total value is divided equally among joint bookrunners and joint lead managers. -- All tranches Tranches A piece, portion or slice of a deal or structured financing. This portion is one of several related securities that are offered at the same time but have different risks, rewards and/or maturities. "Tranche" is the French word for "slice". of a deal are counted as a single deal. Asset-backed securities Asset-backed security A security that is collateralized by loans, leases, receivables, or installment contracts on personal property, not real estate. asset-backed security A debt security collateralized by specific assets. only: -- Privately placed and unoffered tranches of public deals are included. -- Asset-backeds excludes A-quality, first-lien, owner-occupied, 1-4 family, non-home-equity residential mortgages. -- Commercial mortgage-backeds and equipment trust certificates are excluded. Agency mortgage-backed securities only: -- Notional no·tion·al adj. 1. Of, containing, or being a notion; mental or imaginary. 2. Speculative or theoretical. 3. tranches are count towards deal size only in purely notional deals. BRIDGE, together with its principal operating units operating unit A type of operating company that engages in transactions with outsiders and that is owned by another business. For example, in 1995 the stockholders of Capital Cities/ABC approved a $19 billion merger with the Walt Disney Company, whereupon , Bridge Information Systems, Telerate(R), Inc., eBRIDGESM, Bridge Trading, and BridgeNews(SM) is the largest provider of financial information and related services in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and one of the fastest growing in the world. BRIDGE information products include a wide range of workstations, market data feeds and web-browser-based applications, combined with comprehensive market data, in-depth news, powerful analytic an·a·lyt·ic or an·a·lyt·i·cal adj. 1. Of or relating to analysis or analytics. 2. Expert in or using analysis, especially one who thinks in a logical manner. 3. 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BRIDGE, with 5,000 employees worldwide, and over a quarter of a million users in over 65 countries, is headquartered in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. with the BRIDGE Trading and Technology center in St. Louis, and major regional centers in Europe, the Middle East, Africa, and the Pacific Rim Pacific Rim, term used to describe the nations bordering the Pacific Ocean and the island countries situated in it. In the post–World War II era, the Pacific Rim has become an increasingly important and interconnected economic region. . For more information visit the BRIDGE web site at http://www.bridge.com. |
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