corporate trust - current issues update terry mcroberts evp, corporate trust services – regional...
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Corporate Trust - Current Issues Update
Corporate Trust - Current Issues Update
Terry McRobertsTerry McRobertsEVP, Corporate Trust Services – Regional Management & National SalesEVP, Corporate Trust Services – Regional Management & National SalesMarch 28, 2012
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US BanksUS Banks
AssetsU.S.Rank Company
$Billions1. J.P. Morgan $2,2892. Bank of America $2,220
3. Citigroup $1,9364. Wells Fargo $1,3055. U.S. Bancorp $ 330
6. Bank of NY Mellon $ 3047. PNC $ 2698. SunTrust $ 1739. BB&T $ 16810. Regions $ 130
Source: company reports & FactSet
Assets as of September 30, 2011; Market Value as of October 25, 2011
Market ValueU.S.Rank Company
$Billions1. Wells Fargo $1352. J.P. Morgan $131
3. Citigroup $ 904. Bank of America $ 655. U.S. Bancorp $ 48
6. PNC $ 287. Bank of NY Mellon $ 26
8. BB&T $ 169. Fifth Third $ 1110. SunTrust $ 10
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FIRMS Who is in the Business?
FIRMS Who is in the Business?
Municipal Tax-Exempt Bond Market Corporate Taxable Bond Market Structured Finance and Bond Market Business Escrow Services
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Municipal Tax-Exempt Bond TrusteeMunicipal Tax-Exempt Bond Trustee
Trustee Bank 2011 Deals
# of Deals P/V ($ billions) Market Share (#)
1. Bank of New York Mellon 549 $39.1 29.6%2. US Bank 480 $26.6 25.9%3. Wells Fargo Bank 213 $11.8 11.5%4. UMB Bank 73 $ 0.8 3.9%5. Regions Bank 71 $ 3.2 3.8%6. M&T/Wilmington Trust Bank 59 $ 3.3 3.2%7. Zions Bank 32 $ 0.8 1.7%8. Bank of Oklahoma 32 $ 0.6 1.7%9. Deutsche Bank 25 $ 1.3 1.4%10. Union Bank 25 $ 0.7 1.4%
Total Top 10 1559 $ 88.2 84.1%
Source: Thompson ReutersThird Quarter 2011
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Corporate Taxable Bond TrusteeCorporate Taxable Bond Trustee
Trustee Bank 2011 Deals
# of Deals P/V ($ billions) Market Share (#)
1. Bank of New York Mellon 375 $281 44.6%2. US Bank 146 $ 82 17.4%3. Wells Fargo Bank 134 $ 71 15.9%4. Deutsche Bank 82 $ 66 9.8%5. M&T/Wilmington Trust Bank 66 $ 39 7.9%6. Law Debenture Bank 13 $ 15 1.5%7. Citibank 7 $ 7 0.8%8. Mitsubishi UFJ Bank 8 $ 7 0.9%9. HSBC Bank 6 $ 6 0.7%10. UMB Bank 4 $ 3 0.5%
Total Top 10 841 $ 577 100%
Source: Thompson ReutersThird Quarter 2011
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Structured Finance Bond TrusteeStructured Finance Bond Trustee
Trustee Bank 2011 Deals
# of Deals P/V ($ billions) Market Share (#)
1. Bank of New York Mellon 64 $41 29.6%2. Deutsche Bank 51 $29 14.9%
3. Wells Fargo Bank 57 $25 21.1%4. US Bank 41 $21 17.6%5. Citibank 20 $13 9.6%6. Law Debenture Bank 1 $ 4 2.7%7. Perpetual Trustee 3 $ 2 1.3%8. State Street 3 $ 2 1.3% 9. M&T/Wilmington Trust 2 $ 2 1.3%10. Bank of Oklahoma 1 $0.2 0.6%
Total Top 10 243 $ 141 100%
Source: Thompson ReutersThird Quarter 2011
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Market Issues Coming into 2012Market Issues Coming into 2012
Potential Supply /
Demand Imbalance
Build America BondsRecord volume of expiring credit facilities Outflows from municipal bond funds
Market
Expiration of an estimated $65 billion in letters of credit and liquidity facilitiesBasel III impact on the availability and price for credit/liquidity facilitiesAlternatives (Direct Purchase, Floating Rate Notes, Put Bonds)Concentration of credit enhancement providers
Credit Differentiation
Investors and rating agencies more focused on underlying credit profilesHeadline riskFuture of bond insuranceCounterparty risks
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Market Issues
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ObservationsObservations
Basel III impact on the availability and price of credit
Record volume of expiring bank credit facilities have
not taxed the market as expected
Issuers have been successful in extending expiring
credit facilities or restructuring outstanding VRDNs
62% facilities extended*
15% facilities substituted*
22% restructured (5% with direct bank loans)*
$75
$47$34
$22
$37
$18
$15
$20
$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
2011 2012 2013 2014+Billion
sYear
SBPA Expirations
LOC Expirations
Municipal Credit ExpirationsMunicipal Credit Expirations
Source: Thomson Reuters
*Moody’s Investor Service 9/15/2011
$112
$65
$49
$42
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Impacts of the Changing Regulatory LandscapeImpacts of the Changing Regulatory Landscape
“A Rocky Road Ahead”
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ABA CTC OVERVIEWABA CTC OVERVIEW
SEC Rule 17Ad-16 SEC Rule 17g – 7 SEC Rule 15Ga – 1 Reputation Risk Municipal Advisors Municipal Disclosure - EMMA
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ABA CTC OVERVIEWABA CTC OVERVIEW
Foreclosure Issues Basel III Liquidity Impact Missing Security Holders Moody’s Appointment of Agents Issue Cost Basis Reporting
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