Goldman Sachs

(GS) - Get Report

, the market turmoil created by



last week came at a bad time, delaying two of the three initial stock offerings it was scheduled to underwrite.

While the bank appears to have successfully co-managed



CIT Group IPO, which priced at the low end of its expected range Monday night, it can only hope that another marquee deal, the twice-delayed spinoff of


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MedCoHealth unit, can finally reach the syndicate next week.

The $1 billion initial offering of MedCo, which manages pharmacy benefits for health insurers, was pushed back Monday for the second time as Goldman tried to wait out the current market storm. The unit is trying to sell 46.7 million shares at a price range cut to $20-$22 each from $22-$24 last week.


Before last week, Goldman had brought to market just three domestic IPOs in 2002, reaping fees of $30.8 million. During the same period last year, the company brought to market 10 new issues, generating fees of $169.5 million, according to Thomson Financial/First Call.

Goldman, like other investment banks, has been plagued by a slowdown in equity issuance over the past six months. Investment banking revenue fell 4% in the second quarter as the company failed to underwrite a single IPO in the U.S.

Still, the current quarter looks a little brighter, with about four deals on tap, including the two that have been postponed.

Two IPOs have already debuted this quarter.


Goldman is facing very easy comparisons so the impact of these six deals is definitely going to push

their investment banking revenue to the positive side, but that's not to say they're out of the woods," said John Barrett, a financial analyst at Gannett, Welsh & Kotler.

Indeed, Goldman continues to face sluggish capital markets, which will dampen M&A and trading revenues going forward. "They're trading at 2 times book value and are at a discount to Morgan Stanley but it's very difficult to predict when capital market activity will pick up," Barrett said.

Hewitt Priced

Goldman successfully underwrote just one deal last week,

Hewitt Associates


. The human resources outsourcing firm sold 11.15 million shares for an average price of $19.50, raising $212 million.

Hewitt generated interest largely because of its strong profit growth and because outsourcing services are particularly attractive in a down market given that they help businesses to reduce costs. Shares ended up 7% above their $22 open.

Still, reinsurer

Platinum Underwriters Holdings

and MedCoHealth were both postponed after WorldCom said Wednesday that it had overstated EBITDA by $3.8 billion, sending the markets into an initial tailspin.

Platinum, which had already cut its offering price amid soft demand, pushed out its $920 million offering, and the deal is now being planned on a day-to-day basis, according to sources cited by



MedCo Concerns

Meanwhile, MedcoHealth is projected to start trading the week of July 8, although there remain concerns about the deal after recent reports of possible accounting improprieties.

The Wall Street Journal

said Medco recorded revenue from co-payments made by consumers for prescriptions. While not affecting earnings, the practice has stoked fears that the company is using aggressive accounting techniques.

Although Goldman would suffer if either Platinum or MedCo were to be shelved, the launch of CIT Group should offset some of the pain. CIT priced 200 million shares at $23 each Monday night.

Despite a dearth of underwriting opportunities this year for the major investment banks, more companies actually managed to go public in the first and second quarters than in the same six months of 2001.

Underwriters priced 47 new offerings, 15% more than last year at this stage, according to Kyle Huske, an analyst at "At first glance the improvement appears small, but against the backdrop of retreating financial markets, the modest uptick in IPO volume suggests an underlying level of strength," she said.

The total amount raised in the first half of the year was limited by the scarcity of offerings that topped the billion-dollar mark. The delay of MedcoHealth and Platinum Underwriters as well as Tyco's CIT Group withheld about $7.4 billion in estimated proceeds from the market, Huske said.