of commercial and investment bank leaders of junk bond offerings.

The rankings, which are based on the volume of high-yield bonds issued during the third quarter, reflect a high-yield market "in the doldrums," said Steven Rattner, managing director and head of high-yield capital markets at Donaldson, Lufkin & Jenrette Inc.

Bankers said conditions are difficult because there is less cash in the market, as investors wait for indication about the direction of interest rates. Volatility in the equities and Treasuries markets also affected high-yield issuance, they said.

As a result, Donaldson, Lufkin & Jenrette moved into first place from the No. 2 spot, underwriting $4.3 billion in high-yield bonds. DLJ increased its market share to 28%, from 11.4% in the year-earlier period and 12.9% in the second quarter.

Chase Manhattan Corp. climbed two notches to second place, with nine junk bond issues worth a total of $1.96 billion. Bear, Stearns & Co. jumped to third place from ninth, issuing $1.5 billion of non-investment-grade bonds.

As a group, the top 25 underwriters brought $15.16 billion in junk bonds to market from July 1 to Sept. 30.

The volume of new issuance was 55% less than the second quarter's total and 27% lower than third-quarter 1998, according to Thomson Financial Securities Data.

"We increased our focus on the larger, higher-quality issuers that in many cases already had accessed the capital markets," said John Kilgallon, senior managing director and co-head of high-yield capital markets at Bear Stearns.

Bear Stearns was one of the lead underwriters in July for a $500 million issue for cable television company CSC Holdings Inc. Later that month the firm co-led another $500 million transaction for aerospace and defense manufacturer Sequa Corp.

Mr. Kilgallon also credited Bear Stearns' rise in the rankings to several senior hires in the first half.

"In choppy markets people tend to default back to groups that have the best expertise," said Mr. Rattner.

U.S.-based commercial banking companies and their investment banking affiliates, which grabbed more than 26% of the market and led a total of 24 transactions, were also active.

"Our goal is to become the No. 1 underwriter for high-yield securities," said Chris Linneman, managing director and co-head of high-yield capital markets at Chase Securities Inc.

Citicorp's Salomon Smith Barney unit dropped to fourth place from its No. 1 second-quarter ranking, leading $1.2 billion in bonds and taking an 8.2% market share less than half the $4.4 billion it underwrote in the second quarter.

Bankers say this upheaval is not uncommon in the cyclical high-yield market.

However, firms like Bear Stearns, which benefited from the downturn, said they will try to hold their positions in the expectation that the high-yield market will improve this year and in the first half of 2000.

"We pick up share in difficult markets, but we believe we can maintain those share gains when the market rebounds because we've expanded our high-yield team," said Larry Alletto, Bear Stearns senior managing director and co-head of high-yield capital markets.

Goldman Sachs Group Inc. retained its No. 5 position, leading eight junk bond transactions worth $1.09 billion. No. 6-ranked Credit Suisse First Boston jumped one notch from the second quarter and helped bring seven deals worth $980 million to market.

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