New Investment-Grade Corporate Issuance Jumps 54.5% So Far in 1992 to $328 Billion
New U.S. investment grade corporate debt issuance soared 54.5% to $329 billion so far this year, compared to $213 billion at this point last year, IDD Information Services reported yesterday.
The increase, a $116 billion jump, came amid a 61% increase in corporate financings overall, including common stock offerings, IDD said.
For the seventh consecutive quarter, Merrill Lynch & Co. emerged the number one underwriter of new corporate issues.
"This year, Merrill has again conquered the U.S. market and has also emerged as the worldwide leader," an IDD release said, "Propelling Merrill to the forefront of these markets is [its] strong presence as the leading underwriter of debt securities."
For all investment grade debt, Merrill captured top honors among underwriters with 709 issues totaling $57.7 billion for a 17.6% market share. The category includes straight debt, taxable municipals, agency offerings, plus mortgage- and asset-backed debt.
Goldman, Sachs & Co. followed with 567 issues totaling $38.6 billion for a 11.8% market share. Lehman Brothers took third with 739 issues totaling $35.4 billion for a 10.8% market share.
The lineup remained the same for straight corporate investment grade debt. Merrill tallied 195 issues totaling $28.5 billion for a 25.4% market share. Goldman followed with 149 issues totaling $24.1 billion for a 21.5% market share. Lehman placed third with 119 issues totaling $15.2 billion for a 13.5% market share.
But Goldman edged out Merrill to take top honors in the non-investment grade corporate debt race with four issues totaling $1.99 billion for a 40.8% market share. Merrill followed closely with five issues totaling $1.98 billion for a 40.6% market share. First Boston Corp. followed with two issues totaling $309 million for a 6.3% market share.
Daniel Sullivan, a Goldman partner and co-head of the high-yield department, said high-yield bonds have proven an extremely attractive asset class as evidenced by the 27% rate of return provided through the year's first eight months. Mr. Sullivan believes the calendar will continue to build.
"This area remains a major focus of our firm," he said.
Kidder, Peabody & Co. easily won the mortgage-backed race with more than 1,008 issues totaling $28.9 billion for a 17.7% market share. Lehman tallied 602 deals totaling $18.1 billion for an 11.1% market share. Merrill placed third with 449 issues totaling $16.7 billion for a 10.2% market share.
First Boston Corp. placed first in the asset-backed securities rankings with 18 issues totaling $10 billion for a 26% market share. Merrill followed with 32 issues totaling $7.9 billion for a 20.7% market share. Salomon Brothers placed third with 12 issues totaling 5.4 billion for a 12% market share.
The investment grade corporate bond market was firm to up slightly, while the high-yield market was about an 1/8 to a 1/2 softer, traders said.
In ratings news yesterday, Duff & Phelps downgraded the senior and subordinated debt ratings of Southeast Banking Corporation to DD from CCC. Some $360 million was affected.