BAML Wins Bat­tle for Muni Share

The Bond Buyer - - Front Page - By AARON WEITZMAN

Bank of Amer­ica Mer­rill Lynch ex­tended its No. 1 rank­ing among mu­nic­i­pal un­der­writ­ers as the big­gest firms bat­tled for deals in a shrink­ing mar­ket for new is­suance.

Pub­lic Fi­nan­cial Man­age­ment Inc. led the fi­nan­cial ad­vi­sor league ta­ble through Sept. 30 of 2017, while the state of Cal­i­for­nia was the largest mu­nic­i­pal is­suer, ac­cord­ing to Thom­son Reuters data.

The top 11 un­der­writ­ers have com­bined for $271.77 bil­lion in 7,593 trans­ac­tions so far in 2017, down from the $323.77 bil­lion in 9,499 deals in the first nine months of 2016.

RBC Cap­i­tal Mar­kets and Gold­man Sachs were the only firms cred­ited with a higher par amount than in the same pe­riod last year.

“Our mar­ket share in­creases over the past year point to the suc­cess of our plat­form’s di­ver­si­fied ap­proach to in­fra­struc­ture fi­nance,” said Chris Hamel, head of pub­lic fi­nance, RBC.

“We are ap­pre­cia­tive of our clients for en­trust­ing their fi-

nanc­ings to RBC and we look for­ward to con­tin­u­ing to serve them as well as fur­ther ex­pand­ing our in­volve­ment in U.S. mu­nic­i­pal mar­ket.”

BAML un­der­wrote $16.44 bil­lion for first place in the third quar­ter.

That brought BAML’s year-to-date to­tal to $43.43 bil­lion or 16% mar­ket share, up from 15.2% at this point last year.

The largest deals it ran the books on in the third quar­ter in­cluded the Bay Area toll Author­ity, Calif.’s $1.40 bil­lion, New York City’s $898 mil­lion and New York City Tran­si­tional Fi­nance Author­ity’s $857 mil­lion.

Citi un­der­wrote $10.72 bil­lion in the third quar­ter and so far this year ac­counted for a par amount of $34.76 bil­lion or 12.8% mar­ket share.

Citi was lead-man­ager on Penn­syl­va­nia Turn­pike Com­mis­sion’s $795.9 mil­lion, Port of Seat­tle’s $688.2 mil­lion and New York Met­ro­pol­i­tan Trans­porta­tion Author­ity’s $662 mil­lion.

JPMor­gan came in fourth place for the quar­ter with $6.36 bil­lion and is in third so far this year with $24.10 bil­lion, or 8.9% mar­ket share, re­spec­tively.

JPM’s big­gest deals of the quar­ter were Ohio’s $818.7 mil­lion, Chicago Board of Ed­u­ca­tion’s $500 mil­lion and Penn­syl­va­nia Turn­pike Com­mis­sion’s $498.9 mil­lion.


Mor­gan Stan­ley fin­ished third for the quar­ter with $6.45 bil­lion and fourth for the year so far with $20.75 bil­lion or 7.6% mar­ket share.

The firm saw a good chunk of its par amount this quar­ter come from one deal – Texas Wa­ter De­vel­op­ment Board’s $1.06 bil­lion.

The firm is “dis­ap­pointed in vol­ume year-to-date – we ex­pected new-money to be a bit higher,” said Brian Wynne, head of pub­lic fi­nance at Mor­gan Stan­ley.

“Over­all, we are sat­is­fied, there are some quar­ters when clients do more busi­ness and some where they are less ac­tive,” he said.

“Our sec­ondary trad­ing and mar­ket share is up sig­nif­i­cantly, some­thing that we have been fo­cused on the past few years,” he said, “but this year it is re­ally pay­ing div­i­dends [with the lower vol­ume in the pri­mary mar­ket]. We have also hired new peo­ple and formed a new group, the cap­i­tal so­lu­tions group, where we can look at dif­fer­ent ways to help out clients out­side of a typ­i­cal bond deal.”

Although RBC was eighth for the quar­ter with $4.05 bil­lion, it is in fifth place for the year – up one spot from a year ago.

So far this year, RBC has a par amount of $17.45 bil­lion – com­pared with $17.31 bil­lion a year ago, with its mar­ket share also climb­ing to 6.4% from 5.4%.

Gold­man saw the big­gest leap, ris­ing to sixth place for the year so far, from eighth at this point last year. Gold­man has un­der­writ­ten $15.17 bil­lion, com­pared with $13.12 bil­lion.


Wells Fargo fin­ished sixth for the quar­ter, drop­ping two spots from a year ear­lier, as some is­suers sus­pended do­ing deals with the firm fol­low­ing its fake ac­count scan­dal.

Wells has a par amount of $14.49 bil­lion for the first nine months of this year, com­pared with$21.08 bil­lion in the same pe­riod last year.

Stifel is next with $13.21 bil­lion so far this year, and was re­spon­si­ble for more trans­ac­tions than any­one else on the list with 623.

Ray­mond James is next with $10.38, fol­lowed by Piper Jaffray with $10.36 bil­lion and Bar­clays rounds out the list with $8.26 bil­lion.


Pub­lic Fi­nan­cial Man­age­ment fin­ished three quar­ters of the year with a par amount of $41.42 bil­lion in 709 deals, good for an 18% mar­ket share.

That com­pares with $59.43 bil­lion in 957 deals or 21.26% mar­ket share dur­ing the same time pe­riod of 2016.

“Re­flect­ing our goal of be­ing the pre­em­i­nent ad­vi­sor to gov­ern­ments and non-prof­its, PFM’s clients range from lo­cal mu­nic­i­pal­i­ties and school dis­tricts to large util­i­ties and trans­porta­tion sys­tems to states and state agen­cies to multi-fa­cil­ity health and higher ed­u­ca­tion net­works,” said John Bonow, chief ex­ec­u­tive of­fi­cer and manag­ing di­rec­tor for the PFM Group.

“When mar­ket vol­umes fluc­tu­ate over­all, we find that the num­ber and breadth of our clients help us main­tain a high ser­vice level and rel­a­tively con­sis­tent trans­ac­tion lev­els,” he said. “How­ever, our mar­ket share num­bers are more a func­tion of the trust that our clients place in our re­la­tion­ship and ad­vice. We help them un­der­take ap­pro­pri­ate and ef­fi­cient trans­ac­tions in var­i­ous mar­ket en­vi­ron­ments.”


Pub­lic Re­sources Ad­vi­sory Group ranks sec­ond with $35.21 bil­lion with 15.3% mar­ket share and Hill­top Se­cu­ri­ties is third for the year so far with $25.45 bil­lion or 11.1% mar­ket share.

Aca­cia Fi­nan­cial Group held its spot in fourth, even as its par amount de­creased to $9.04 bil­lion from $11.90 bil­lion.

KNN moved up to fifth from eighth with $6.81 bil­lion, up from $5.66 bil­lion.

Piper is next with $5.33 bil­lion, fol­lowed by Kauf­man Hall and As­so­ciates Inc., with $5.06 bil­lion.

Lamont Fi­nan­cial Ser­vices saw the big­gest leap, go­ing to eighth with $3.52 bil­lion from 20th with $2.59 bil­lion. Round­ing out the top 10 are Pon­der and Co., with $3.14 bil­lion and RBC with $2.60 bil­lion.


Cal­i­for­nia re­mains the top mu­nic­i­pal is­suer.

The Golden State leads the rank­ing with a par amount of $7.18 bil­lion in eight deals.

The New York City Tran­si­tional Fi­nance Author­ity is in sec­ond with $5.35 bil­lion fol­lowed by the Dor­mi­tory Author­ity of the State of New York with $4.99 bil­lion.

The Cal­i­for­nia Health Fa­cil­i­ties Fi­nance Author­ity is fourth with $3.33 bil­lion and the Bay Area Toll Author­ity is fifth with $2.81 bil­lion. Round­ing out the top 10 were: New York City with $2.59 bil­lion; Chicago with $2.57 bil­lion; State of Mary­land with $2.48 bil­lion; Hud­son Yards In­fra­struc­ture Corp. with $2.14 bil­lion; and the State of Wis­con­sin with $2.11 bil­lion. ◽

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