Here’s the one part of the M&A boom that tiny upstarts can’t take away from Wall Street

This is one of the best years ever for mergers and acquisitions, and Wall Street’s biggest firms have been losing market share to tiny upstarts like Centerview Partners and Zaoui & Co.
But there’s one part of this takeover boom that the boutiques can’t touch — the market for massive debt used to pay for deals.
Called “jumbo bonds,” these deals carrying $US10 billion or greater in financing have hit an all-time high, according to Dealogic. The data service tracked 13 transactions that required a staggering $US156 billion in debt financing — an increase of 59% year-over-year from 2014.
Among the banks underwriting these bonds, Barclays leads the pack with more than 12% of market share, followed by JPMorgan and Wells Fargo Securities, Dealogic said. Barclays declined to comment on the report.
Not all of these are M&A related of course. Oracle priced $US10 billion in bonds earlier this year, but that was to help pay for a dividend increase.
And not every large deal leads to this kind of work for big banks. For example when Kraft Foods and H.J. Heinz merged, the deal was financed by Warren Buffet’s Berkshire Hathaway and 3G Capital, rather than Wall Street. The only financial advisers listed on that deal were Centerview Partners, which has claimed M&A mandates in several jumbo transactions, and Lazard.
But plenty of other buyers do have to tap Wall Street’s deep pockets to finance their deals, and the takeovers are expected to keep coming as long as interest rates stay low.
Healthcare led all sectors for jumbo bond issuance, with more than $US47 billion issued for three deals. Telecom M&A generated nearly $US43 billion in debt financing for three more transactions, placing second. This includes deals like Actavis’ $US21 billion bond package to back its Allergan buyout and AT&T’s $US17.5 billion debt financing to support its DirecTV deal.

Dealogic’s data captures the stark increase in jumbo financing:

Dealogic data shows global jumbo bond revenue is at an all-time high for banks. Dealogic