Credit Suisse First Boston Not First in Junk Anymore

There is a 5 way race for first place, but whoever emerges on top at year-end, no one will dominate the junk bond market the way Drexel Burnham Lambert did in the 1980s, before its leader, junk bond king Michael Milken, went to prison for fraud and his firm crashed and burned. Milken now devotes his time to his philanthropic pursuits.
Drexel led the $25 billion leveraged buyout of RJR Nabisco Corp. by Kohlberg Kravis Roberts in 1988 - a takeover immortalized in the book, Barbarians At The Gate.
That was underscored Thursday, as one-time high-yield bond overlord Credit Suisse First Boston (
CSR) was ranked just fifth in the first-quarter underwriting league tables for new high-yield issues, as tabulated by Thomson Financial. The showing, though respectable, followed its second place finish for all of 2004, its first time out of first in a decade.
JP Morgan Chase (
JPM) was tops in this year's first quarter, while last year, Citigroup (C) took the crown away from CSFB in a victory that was very sweet for the firm. Citigroup's former Salomon Brothers high-yield group had battled CSFB's ex-Donaldson Lufkin Jenrette's junk bond team all during the 1990s, with DLJ always ending on top.
DLJ and Salomon battled for primacy at a time when commercial banks were forbidden to underwrite corporate securities. That changed in 1999, when the federal government loosened restrictions, and commercial banks muscled their way in. Salomon was snapped up by Citigroup, DLJ by CSFB. And Bankers Trust, another comer in the junk bond market, was taken over by Deutsche Bank (

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