No Rankings Windfall For GM Underwriters

O'Leary, Christopher
June 2003
Investment Dealers' Digest;6/30/2003, Vol. 69 Issue 26, p7
Trade Publication
The colossal $16.9 billion issue from General Motors Corp. (GM) and its financing arm General Motors Acceptance Corp. (GMAC), which included roughly $13.5 billion in corporate bonds and an additional $3.5 billion in convertible securities, provided an impetus to the already high-grade bond market. But the deal will likely leave its underwriters' league table positions exactly where they had been. To be sure, nabbing a lead manager underwriting mandate on the largest bond offering of the year, and third-largest of all time, is nothing to sniff at. Bankers said all of the co-lead managers stand to benefit enormously from huge fees and billions of dollars in underwriting volume to boost their standings in the high-grade debt league tables. Yet GM has spread the wealth so liberally among underwriters that each tranche of the deal will have anywhere from five to seven dealers on it. Consequently, no firm has gotten away with a clear-cut landslide mandate. While some buyers initially wondered whether the market could digest such a massive deal, ceaseless demand over the past week led to the upsizing of the deal from roughly $10 billion to $13 billion.


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