Wall Street Underwriting: Stock and Bond Financings Soared 63% to Record High
NEW YORK -- A big drop in interest rates triggered a wave of corporate bond refinancings that powered Wall Street investment banks to a record quarter of stock and bond sales.</br></br>But disclosed fees, or the money that Wall Street investment banks earn from underwriting new stocks and bonds, fell far short of a record, largely because the bulk of the quarter's financings were bond issues that typically reap far slimmer fees than stock offerings.</br></br>The volume of domestic stock and bond financings jumped 63% to $472.7 billion during the first quarter, up from $290.7 billion in the same period last year, smashing the previous record of $372.5 billion set in last year's third quarter, according to Securities Data Co., a Newark, N.J. concern that tracks corporate-finance activity.</br></br>If Wall Street investment banks keep up the breakneck pace, total stock and bond volumes could approach the $2 trillion mark this year, far eclipsing the record of $1.3 trillion underwritten in 1997. "It's been raining deals all quarter," said Mark Seigel, head of global debt syndicate at Morgan Stanley Dean Witter & Co., one of Wall Street's biggest underwriters. "Our new-issue desk has felt like a war zone."</br></br>Behind the first-quarter boom was falling interest rates and a flight to quality precipitated by the Asian stock sell-off.