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THE ECONOMICS OF THE PRIVATE
MARKET
Who Are the Agents?
According to a database supplied
by the publishers of the Investment Dealers Digest, thirty investment
banks and commercial banks were responsible for 96 percent of the volume
of all agented privately placed debt transactions from 1989 through 1991
(see table 10). Each of these agents placed
at least $1 billion of debt securities during at least one of those three
years. The database, however, does not include all new private issues.
Possibly, a table based on a complete list of transactions would change
the ranking somewhat and would add entries to the list. 121
10.
Major agents of U.S. private placements of debt, 1989-91
| Agent |
| Rank according to business volume1 |
Three-year agent volume |
Private
placement
agenting |
Investment
banking |
Commercial
banking |
Amount
(millions of
dollars) |
Percent
of
total |
|
| Goldman Sachs |
1 |
2 |
. . . |
37,469 |
11.7 |
| First Boston |
2 |
4 |
. . . |
32,143 |
10.0 |
| Salomon Brothers |
3 |
7 |
. . . |
25,811 |
8.1 |
| J.P. Morgan |
4 |
12 |
8 |
22,075 |
6.9 |
| Merrill Lynch |
5 |
1 |
. . . |
19,574 |
6.1 |
| Lehman Brothers |
6 |
3 |
. . . |
16,635 |
5.2 |
| |
|
|
|
|
|
| Citicorp |
7 |
(2) |
1 |
14,485 |
4.5 |
| Chase Manhattan |
8 |
. . . |
5 |
13,264 |
4.1 |
| Morgan Stanley |
9 |
6 |
. . . |
12,908 |
4.0 |
| Drexel Burnham |
10 |
n.a. |
. . . |
12,246 |
3.8 |
| Paine Webber |
11 |
11 |
. . . |
11,726 |
3.7 |
| FNB Chicago |
12 |
. . . |
10 |
11,009 |
3.4 |
| |
|
|
|
|
|
| Chemical Bank |
13 |
. . . |
23 |
10,708 |
3.3 |
| Bankers Trust |
14 |
. . . |
20 |
10,167 |
3.2 |
| Kidder Peabody |
15 |
5 |
. . . |
8,387 |
2.6 |
| Continental Bank |
16 |
. . . |
13 |
6,460 |
2.0 |
| Bank of America |
17 |
. . . |
3 |
6,164 |
1.9 |
| Manufacturers Hanover |
18 |
. . . |
23 |
5,740 |
1.8 |
| |
|
|
|
|
|
| Donaldson Lufkin |
19 |
10 |
. . . |
4,022 |
1.3 |
| NationsBank/NCNB |
20 |
. . . |
4 |
3,714 |
1.2 |
| Dillon Read |
21 |
(2) |
. . . |
3,517 |
1.1 |
| Bear Stearns |
22 |
8 |
. . . |
3,125 |
1.0 |
| Smith Barney |
23 |
14 |
. . . |
2,997 |
.9 |
| Capster Partners |
24 |
. . . |
|
2,634 |
.8 |
| |
|
|
|
|
|
| Prubential-Bache |
25 |
9 |
. . . |
2,566 |
.8 |
| Dean Witter |
26 |
15 |
. . . |
1,929 |
.6 |
| Wertheim Schroder |
27 |
. . . |
. . . |
1,802 |
.6 |
| Lazard Fréres |
28 |
. . . |
. . . |
1,184 |
.4 |
| Barclays |
29 |
. . . |
. . . |
1,159 |
.4 |
| Alex Brown |
30 |
13 |
. . . |
1,091 |
.3 |
-
Investment and commercial
banking ranks were determined using underwriting and loan volumes
respectively.
-
Dillon Read and Citibank
were the eleventh and twelfth ranked investment banks for investment
grade debt respectively.
-
End-of-1991 consolidated
loans were combined for Chemical and Manufacturers Hanover in arriving
at a bank ranking. Sources. Noted in text.
-
The total
number of agents of private placements is unknown because many banks,
investment banks, and ''boutiques'' act as agents for relatively
small volumes of issuance. The IDD data files for 1989-91 list
173 organizations as agents, many of them for only one or a few transactions
in a single year. Many agents with a relatively small volume of business
do not report their transactions to IDD. Market participants' off-the-cuff
estimates of the total number of currently active agents range from
100 to 300.
The Stages of a Private Placement Transaction
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