A surge in junk bond issuance during the first nine months this year has sparked fierce jockeying for deals among underwriters, including commercial banks.

Total high-yield issuance, which was dominated by private placements, known as 144a issues, has reached $89.4 billion since January, according to Securities Data Co. That's a 54% jump from the first nine months of last year, when issues totaled $58.2 billion. This year's volume has already surpassed the $72.5 billion annual record, set in 1993.

The figures include those issues rated BB-plus and lower by Standard & Poor's and rated Ba1 and lower by Moody's Investors Service but do not include high-yield issuance from Latin America, which continues to be a large part of the market. Latin American issuance for the first half counted for roughly 25% of the high-yield market.

The explosion of 144a issuance-which now makes up about 95% of all high- yield issuance-may account for some discrepancies in the figures; Standard & Poor's measures high-yield issuance at $92.4 billion. The increase in the number of 144a's is largely attributed to the issuer's ability to bring such instruments to market more quickly.

While the usual suspects - Donaldson, Lufkin & Jenrette; Morgan Stanley, Dean Witter, Discover & Co.; and Merrill Lynch & Co. - sparred for the top position on the league tables, Chase Securities Inc. also zoomed up the ranks.

The brokerage subsidiary of Chase Manhattan Corp. snared a 7.7% market share, raising proceeds of $6.9 billion from 44 issues, and placing fifth among all underwriters for the first three quarters, according to Securities Data.

A year earlier, Chase had only 4.8% of the market, and placed ninth among all underwriters.

Meanwhile, Bankers Trust New York Corp., which integrated Alex. Brown & Co. last quarter, ranked eighth among all underwriters, with 5.9% of the market, raising $5.285 billion of proceeds. That's a gain from last year, when Bankers Trust raised $2.886 billion in high-yield bonds and took a 5.5% market share.

Other commercial banks with junk bond shops, including J.P. Morgan & Co., NationsBank Corp., CIBC Wood Gundy, and Citicorp , either maintained market share or slipped slightly from last year.

"The market remains receptive to innovative financings. It is increasingly global, and supply has increased tremendously," said Wilfred Finnegan, a managing director and head of high-yield at Chase Securities. He noted that the fundamentals of the market continue to be strong, with liquidity on the demand side remaining positive and the balance of supply and demand remaining stable.

The third quarter was one of the strongest ever for Chase; it lead- managed $2.06 billion of business in September alone. Securities Data said that Chase has led 44 deals this year, compared with 17 last year.

For Chase, some of the banner deals included a $175 million issue of senior notes for Stena AB, an $800 million issue for Iridium, and a $235 million German mark-denominated issue co-managed with Goldman, Sachs & Co. for ITT Promedia.

Meanwhile, Bankers Trust, a pioneer in the commercial bank-based junk bond market, added to its origination firepower with the Alex. Brown acquisition. That deal closed last month.

In June, BT Alex. Brown led a $220 million issue for American Communications Services Inc., a competitive local exchange carrier, in addition to a $75 million issue of payment-in-kind preferreds. Other Alex. Brown deals included a $300 million issue for SC International Services and a $150 million issue for Atlas Air.

Demand for high-yield bonds has continued to be robust, as the "global search for yield" continues to put pressure on spreads.

Andrew Nybo, head of research at the Bond Market Association, said that spreads on B3 bonds, which were 464 basis points over Treasuries in March 1996, are now 328 basis points.

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