Capital Markets

Citigroup Tops Equity Underwriters

The world's largest financial services firm hurdled perennial leaders Morgan Stanley and Goldman Sachs for the first time.
Stephen TaubDecember 30, 2005

Citigroup topped all global underwriters of stock and equity-linked bond offerings in 2005, reported Bloomberg, which keeps score of this data. The world’s largest financial services firm hurdled perennial leaders Morgan Stanley and Goldman Sachs for the first time.

The banking giant, which managed $48 billion of stock and equity-linked bond offerings, reportedly earned roughly $1.8 billion of fees from 270 companies in more than 30 countries, according to Bloomberg. Citigroup’s global presence ranged from the $4.2 billion offering of Japan’s Mizuho Financial Group Inc. to the Kuwait government’s sale of a $2.1 billion stake in oil producer BP Plc.

“They really have built a very impressive investment-banking capability,” Merrill Lynch analyst Guy Moszkowski told the wire service. “They won’t always be No. 1, but they clearly have been effective in merging their investment and commercial banks.”

Morgan Stanley finished second, arranging $45.7 billion worth of deals, while Goldman arranged $45 billion worth.

Bloomberg also pointed out that excluding convertible bonds, in 2005 more equity was sold in Europe and Asia than in the United States for the first time.

Commissions fell to 3.4 percent from 3.6 percent, in part because IPOs, which pay the highest fees, are down 20 percent from their all-time highs of 2000, according to the wire service.

Citigroup, Morgan Stanley, and Goldman Sachs also finished one, two, three in a ranking of global underwriters by Dealogic, though for U.S. deals, Goldman Sachs nosed into second place. For stock underwriting only, Morgan Stanley was the leader both for global and U.S. offerings, according to Dealogic.

As for initial public offerings, Dealogic found that the global leader was Credit Suisse First Boston, with 9.7 percent of total volume, followed by Morgan Stanley, UBS, Goldman Sachs, and Citigroup. Goldman and Citigroup were the top two finishers in the United States.

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