Large banking companies eager to provide their customers with sophisticated corporate financings are starting to surface in the top ranks of private placement managers, but they still lag investment banks in leading such deals.

Credit Suisse First Boston topped a ranking of lead managers of private placements released this week by Thomson Financial Securities Data, with $23.4 billion worth of deals in the first half of the year. Merrill Lynch & Co. came second with $21.6 billion, followed by Citigroup's Salomon Smith Barney unit with $18.7 billion, and Chase Manhattan Corp., with $18.3 billion. The totals include debt and equity placements.

Banking companies such as Bank of America Corp. and J.P. Morgan & Co. have long been involved in a niche of the debt-only private placements market that is known as traditional placements. These deals involve finding buyers for plain-vanilla corporate bonds issued by their clients in transactions that typically involve no public trading or registration.

But the traditional deals accounted for just 7% of the $226.7 billion in private placement activity during the first half. Banking companies want to expand beyond the confines of this niche business by moving into high-yield and other nontraditional placements.

"We want to have a full complement of debt and equity capital-raising capabilities," said Stephen Monahan, managing director and head of the debt private placement group at Banc of America Securities. "The private placement market is a logical product line extension of our traditional banking business."

Chase, for one, is making headway, climbing five notches in the ranking of total private placement volume from a year earlier. The nation's third-largest banking company attributed its ascent to a general increase in capital markets activities during the first half.

"It's a reflection of broad-based improvement in the investment-grade bond business, continuing leadership in the high-yield bond business, and increased activity in traditional private placements, both in debt and private equity," said John Youngblood, managing director in charge of private placements and structured securities at Chase Securities Inc.

Nearly one-fourth of the private placement market comes from high-yield bond deals. Most junk bond transactions are actually private placements registered with the Securities and Exchange Commission under the Rule 144a exemption of the Securities Act of 1933.

The exemption allows these bonds to be privately placed with institutional investors and then registered for public sale in the secondary market.

Major investment houses got the jump in private placements because they started forming junk bond teams in the early 1980s. Commercial banks, meanwhile, have been devoting resources to non-investment-grade companies in only the last three to five years, analysts said.

Commercial banks' "conservative risk profile makes them willing to expand, but just at a slower pace," said Stephen Biggar, a bank analyst at Standard & Poor's. "The investment banks have had more of a maverick mentality."

Commercial banks have been more active in traditional private placements because they had the relationships with the kind of companies that needed that kind of financing, said David Fussell, vice president at Provident Investment Management in Chattanooga, Tenn.

"They saw an opportunity in this market as the Wall Street investment banks went after higher-margin businesses," he said.

Bank of America's broker/dealer subsidiary ranked No. 8 in total placements, but again came in first in traditional private placements.

These positions are important, because investment houses and banks use them to prove their ability and access to investors in order to win future clients.

"If a firm is not an active player in the public-debt capital markets, both for high-grade and high-yield, it would be a challenge for it to move up the overall rankings," Mr. Youngblood said.

Bank of America has been putting more resources into its high-yield bond effort, Mr. Monahan said. "As we continue to build our 144A segment of public high-yield bond business, our overall private placements rankings will naturally increase," he said.

Investment banks clung to the upper half of the ranking for total placements, though there was a shift at the top. Merrill Lynch had been in first place but dropped to second as its volume declined by 40% from the same period a year earlier.

But it hung on to its third-place ranking for traditional private placements, with an 8% rise in volume.

"Since last fall and the financial crisis, the public market has become more obsessed with liquidity, and you've seen a trend towards larger public deals," said Andrew Hanson, managing director and head of debt private placements for Merrill Lynch. "That's opened up more opportunities for private placements."

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