A spike in issues by New Jersey government entities helped McCarter & English leap to No. 5 nationwide in bond counsel rankings for the first quarter of 2013, up from 47th place in the same quarter last year.
The Newark firm handled issues worth $3.077 billion in the first quarter, including January’s $2.253 billion refunding of existing debt by the New Jersey Economic Development Authority.
The EDA transaction also helped McCarter top the New Jersey bond counsel list, handling a combined $2.261 billion in debt — a 45.4 percent market share.
Barbara Kroncke-Moore, leader of McCarter’s public finance practice group, says, "there’s definitely a lot of refunding" in recent years. "It’s still a really good interest rate environment for so many of our issuers."
At the same time, it’s not exactly business as usual now that health-care, education and other institutions "seem to be borrowing money for new capital projects," Kroncke-Moore says.
"I think the market for new debt for capital projects is going to be carefully growing,"  she adds.
A surge of large bond issues by the state the state of New Jersey led to a 450 percent increase in value over the first quarter of 2012, according to Thomson Reuters. Seventy bonds worth $4.978 billion were issued, of which state bonds accounted for 81.1 percent. That was up from $1.098 billion in first quarter 2012.
After McCarter, the next best performer in the New Jersey rankings was Wolff & Samson of West Orange, with four issues worth a combined $1.445 billion. That’s a 29 percent market share.
The firm worked on the second-largest transaction in New Jersey — a $1.4 billion issue by the New Jersey Turnpike Authority finalized on March 20 — as well as a $34.4 million issue by South Orange Township and two bonds by the EDA worth a combined $10 million.
The firm ranked 11th for the first quarter of 2012 with two issues worth $24.9 million.
Four other firms had a market share of at least 2 percent in the first quarter of the year.
Obermayer Rebmann Maxwell & Hippel ranked third with eight issues worth $391.1 million, a 7.9 percent market share. The firm, which has a Cherry Hill office, advised a series of seven bonds issued in March by the New Jersey Housing and Mortgage Finance Agency (HMFA) worth a total of $384.7 million. The firm was not ranked for the first quarter of 2012.
Anastasius Efstratiades, who co-chairs the firm’s business and finance department, says the HMFA’s catalyst was a new program using conduit bonds, issued by government entities but backed by banks or other financial institutions.
There’s no exposure by the state agency, and the program attracts developers, Efstratiades says.
"Generally in the economy, the one area that there’s activity is the multi-family real estate market … because there is some need for that," he says.
McManimon Scotland & Baumann of Roseland ranks fourth, continuing its practice of advising large numbers of public financings for local government clients.
The 20 bond issues it advised were worth a combined $313.4 million, a 6.3 percent market share. The firm topped the rankings for the first quarter of 2012, with 42 issues worth a combined $431.1 million, a 39.3 percent market share.
Partner Edward McManimon III says: "It isn’t that there aren’t new capital projects, but there is a large market that’s continued to exist through refunding."
Interest rates remain low, especially for municipalities with high credit ratings such as Ridgewood and Princeton, he adds.
Ranking fifth was Wilentz, Goldman & Spitzer of Woodbridge, which counseled on nine issues worth $168.7 million, a 3.4 percent market share. The firm worked on the sixth- and seventh-most valuable transactions for this year’s first quarter: a $47.4 million issue by Middlesex County on March 14 and a $42.9 million issue by Monroe Township on Jan. 31.
The firm ranked fifth for the first quarter of 2012, too, and advised the same number of bond issues, nine, though they were worth less, $80.9 million.
Gluck Walrath of Trenton ranked sixth with three issues worth $98 million, a 2 percent market share. The firm ranked eighth for the first quarter of 2012, with two issues worth $30.1 million, a 2.8 percent market share.
Eleven other firms combined for 6.2 percent of the New Jersey bond market, advising issues worth a total of $301.4 million.
In the nationwide first-quarter rankings, McCarter (No. 5) followed top-ranked Orrick Herrington & Sutcliffe of San Francisco (79 issues, $9.735 billion); Cleveland’s Squire Sanders (50 issues, $4.96 billion); New York’s Hawkins Delafield & Wood (80 issues, $3.705 billion); and Houston’s Fulbright & Jaworski (94 issues, $3.574 billion).
After McCarter and rounding out the top 10 were Omaha, Neb.’s Kutak Rock (57 issues, $2.889 billion); Boston’s Nixon Peabody (15 issues, $2.132 billion); Newport Beach, Calif.’s Stradling Yocca Carlson & Rauth (45 issues, $1.979 billion); Seattle’s Foster Pepper (20 issues, $1.785 billion); and Dallas’ McCall Parkhurst & Horton (84 issues, $1.48 billion).