07/13/2012

Deutsche Seizes Trustee Crown From BNY

Deutsche Bank has displaced BNY Mellon as the U.S. securitization industry’s most active trustee.

Deutsche fielded indenture assignments for $33.8 billion of U.S. asset-backed and mortgage-backed securities during the first half of 2012, according to Asset-Backed Alert’s ABS Database. That was enough for a 27% market share — well ahead of the $25.4 billion of deals for second-place U.S. Bank (21% market share) and $22.5 billion for number-three Wells Fargo (18%).

BNY, meanwhile, saw its share of the business cut nearly in half from the year-ago period, slipping to fourth place with $19.5 billion of indenture assignments and a 16% market share. The bank has topped the newsletter’s trustee ranking for the past five years in a row, based on full-year volume.

So what happened in the first half? The decline in BNY’s U.S. trustee business may reflect a shift in focus toward the global market for collateralized debt obligations. In that arena, the bank easily led the pack with $6.9 billion of assignments during the first six months of the year — enough for a whopping 42% market share. Citigroup was a distant second, handling $2.9 billion of CDOs worldwide for a 18% share.

Deutsche’s trustee group last topped the U.S. ranking in 2005. Jim Della Sala, who leads the unit, attributed the bank’s recent success in winning trustee assignments to its strong standing during the financial crisis. Investors know the transactions Deutsche handles will function properly in all market conditions he said.

Among Deutsche’s biggest customers are Sallie Mae, an issuer that accounted for $6.9 billion of the bank’s trustee business in the first half, and Ally Bank, which tapped Deutsche to handle $6.5 billion of offerings.

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