Securities Data Co. is looking to shake up the way the syndicated lending business tracks itself when it unveils a new league table next month.
The new measurement, called a book-manager table, gives credit to the lender that structures and prices a deal. That differs from the standard "agent-only" league table which gives all top-tier participating lenders full credit for a deal.
The move is a significant one for the increasingly competitive syndicated loan market where deals are often won or lost by a lender's standing on the tables. And the market has long complained that agent-only tables give credit to lenders who have done little more than handle a deal's documents or arrange bank meetings.
Though Securities Data will continue to provide its agent-only tables, statisticians there are hoping the new tables, which are similar to those used in the bond markets, become as important to the loan business as agent-only tables.
"I don't think it's going to be one or the other," said Peter Marney, a product manager at Securities Data. "I think you need to look at both of them to get an idea of who's doing what in the market."
The difference between the new and old league tables is striking. A comparison of a 1997 book-manager table with a traditional agent-only table looks, on the surface, to be the same. But there are substantial differences:
Chase Manhattan Corp. is ranked No. 1 on both tables but its volume is dramatically different: 684 deals, worth $474 billion, for the agent-only table, but only 618 deals, worth $317 billion, in the book-manager table.
Investment banks generally move up on the new tables because many don't have the back-office operations to take a lead role in a loan package. Merrill Lynch & Co. and Goldman Sachs & Co. move up a notch.
Citicorp jumps from fourth on the agent-only table to third on the book-manager table.
A combined BankAmerica Corp. and NationsBank Corp. would rival Chase on the agent-only table, with total loans of $421.5 billion and $474 billion, respectively. But on the book-manager table the new BankAmerica is credited with $191 billion-40% less than Chase.
First Union Corp. jumps the highest, from 17th on the agent-only tables to 11th on the book-manager tables. Bank of Montreal Trust drops from 14th to 20th.
Securities Data, Newark, N.J., is owned by Thomson Holdings Inc., which publishes American Banker. Its major competitor, Loan Pricing Corp., a unit of Reuters America Inc., has no plan to change its league tables, according to its president, Jim Davis.
Mr. Davis said the Loan Pricing league tables are adjusted periodically to reflect changes in the marketplace. Loan Pricing meets regularly with lenders, borrowers, and investors to discuss deals and the way the statistics are gathered, he said.
Loan Pricing offers three league tables: a full-credit table that gives full credit of a transaction to all agents and co-agents; a table that uses number of deals as the criterion; and an agent-only league table, which gives full credit to lenders with documentation, administrative, or syndication titles.
"We have been doing league tables for 10 years and there's great consistency to our process," Mr. Davis said. "Everyone may not agree that the rule is the way they would like it. But there's extreme clarity."
Nevertheless, many in the industry complain that both Securities Data and Loan Pricing fail to capture the reality of the syndicated loan marketplace. It's a complaint not unlike those directed at a scorekeeper in a baseball game. Was it a hit or an error?
Kevin Meenan, head of the loan and sales trading desk at Societe Generale, likens league tables to the Nielsen ratings for television. He said the banking consensus is that league tables need to move from an "art to a science" though he said no table will "ever be an exact science."
"There's a feeling that there's a massaging of league table numbers across the board," Mr. Meenan said. "That's a function of banks reporting deals. It's like not everyone cheats on their taxes, but some do."
Mr. Meenan, however, isn't quick to endorse the new book-manager format. That's because agent-only league tables are important in showing how many deals in which lender is participating. The more deals, the less exposure to risk. Still, he agrees the new table is more akin to those found in other markets.
Jasmin Chanana, an analyst with Securities Data who helped formulate the change, said agent-only league tables have never conformed with tables for other markets. But even the name of the new table-taken from a similar table in the bond market-shows how the markets are changing.
"People talk about the convergence between the" loan and bond markets, Mr. Chanana said. "By doing it this way it's a direct comparison between traditional debt markets and syndicated loans."
