Armed with new zeal for the securities business, banks are whooshing up the ranks of high-yield bond underwriters.

The top 10 commercial banks in the field accounted for more than 25% of deal volume in the first six months of the year, up from 17% a year earlier, according to Securities Data Co. And eight of the 10 rose in rank, mostly at the expense of Wall Street firms.

Bankers Trust New York Corp., retaining the top spot among banks, rose to No. 6 among all high-yield underwriters from No. 7. It lead-managed $3.45 billion of issuance since January. Chase Manhattan Corp., meanwhile, jumped to No. 7 in the field from No. 10.

Wall Street firms continued to lead the list.

The push into high-yield bonds-relatively risky instruments also known as junk bonds-shows how commercial banks are taking a place in underwriting debt and equity. Encouraged by a loosening of regulations, four banks have gone so far this year as to buy securities firms outright.

The burgeoning high-yield market is seen as crucial for banks because, in the eyes of both corporate customers and investors, the securities can be good alternatives to leveraged loans, a specialty of banks.

"Commercial banks have built up their high-yield franchises and are leveraging their lending relationships with their high-yield distribution, and trading and research," said Gary Goodenough, a high-yield portfolio manager with Loomis Sayles & Co.

Donaldson, Lufkin & Jenrette Inc. maintained the top spot in the market for the first six months of the year, lead-managing $7.4 billion of offerings in 33 deals. Meanwhile, the newly formed Morgan Stanley, Dean Witter, Discover & Co. knocked Merrill Lynch & Co. from the No. 2 position, with $6.4 billion of deals.

"Commercial banks are certainly not in the same league as Merrill and DLJ, but you are seeing them in a lot more deals," said Diane Vazza, director of fixed-income research at Standard & Poor's.

"There's no question that the atmosphere is more competitive," she added. "The commercial banks have really been staffing up in sales, trading and research."

J.P. Morgan & Co., the preeminent bank in investment banking, cracked the top 10 in the high-yield derby. With $3 billion in offerings for the first half of the year, Morgan move to No. 9 from No. 12 a year earlier, according to Securities Data. Morgan's share of the market jumped to 5.2% from 3%.

Some of the big Wall Street firms, by contrast, suffered declines in market share. DLJ's share slipped to 13.7% from 17.1%, and Merrill's dropped to 10.1% from 12.4%, Securities Data said.

NationsBank-No. 5 among banks, No. 15 among all underwriters-has been getting much of its high-yield business through its corporate lending operations, said Bill Sacher, head of high-yield sales and trading.

"A lot of the momentum was coming from our corporate franchise," he said. Three of NationsBank's nine issues were for leveraged buyout sponsors.

He added that the company's recent agreement to buy Montgomery Securities should give a further lift to the business by bolstering research capabilities.

"Montgomery completes a very important missing component to our business plan," Mr. Sacher said.

CIBC Wood Gundy Securities made solid gains in the first half of this year, following its acquisition last year of Argosy Group, a junk bond specialist. Andrew Heyer, co-head of CIBC's high-yield group, says he expects strong performance in the months ahead.

"Now we truly have significant momentum, we've become extraordinarily integrated and unquestionably much better known as to what we are and what we do," he said.

The Canadian company managed $2.09 billion in high-yield deals in the first half of this year, ranking 12th among all underwriters. That was up from No. 15 a year earlier.

CIBC Wood Gundy managed large offerings for Outdoor Systems and Hayes Wheels. "They raised our rankings, but they also raised our profile," Mr. Heyer said.

The rankings are based on both public issuance and private deals, known as 144a offerings.

Ms. Vazza of Standard & Poor's said the private deals now account for about two-thirds of the market and eventually may rise to 75%. The share has been rising since 1992.

"We don't treat 144a's any differently than public securities," Mr. Goodenough said.

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