Wall Street's biggest firms can't get a break in the bondbusiness.

With trading profits dwindling, more dealers than ever are fightingfor assignments managing U.S. corporate-bond sales, one of the fewbright spots in fixed income. Companies from the most-creditworthyto the most-indebted have been selling trillions of dollars ofdebt, locking in record-low borrowing costs ahead of theanticipated rise in interest rates.

The increased competition is bad for JPMorgan Chase & Co.,Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc.,and Barclays Plc because the top five banks won the smallest shareof the assignments this year for any comparable timeframe,according to data compiled by Bloomberg. A record 144 underwritersfor the period have split an estimated $4.2 billion of fees on U.S.sales, the data show.

“One business is challenged, so people have become aggressive inother businesses,” said Alison Williams, a senior financialsanalyst with Bloomberg Industries.

While the biggest firms are still dominant, they're losing theirhold on a reliable profit center in an increasingly bleakfixed-income world. The five most-active corporate-debtunderwriters this year landed 47 percent of the business, thesmallest share on record. That's down from 59 percent of theassignments for all of 2009.

Smaller firms see an opportunity to break into the business asWall Street's behemoths unload inventories of riskier securities inthe face of higher capital requirements and limits imposed by theU.S. Dodd-Frank Act's Volcker Rule on the amount of their own moneythey can use to trade.

Royal Bank of Canada has climbed to 11th most-active underwriterof corporate bonds in the U.S., from 14th place in the period fouryears earlier, Bloomberg data show. U.S. Bancorp and a unit ofSunTrust Banks Inc. are in the top 20 managers of the debt sales,from ranking 22nd and 28th, respectively, in 2010.

To make matters worse, fees on the $754 billion of corporatebonds sold in the U.S. this year are coming down, Bloomberg datashow. Those tied to junk-bond issuances—more lucrative thanunderwriting higher-rated debt—have shrunk to the lowest onrecord.

Debt underwriting fees among the nine biggest banks were 5.8percent lower in the first three months of 2014 compared with thesame period last year, according to data compiled by BloombergIndustries. The slump in fees outpaced a 2.6 percent drop in thevolume of global corporate bond sales.

Those easy-money policies implemented by central banks aroundthe world increasingly look like anything but easy money for thebiggest banks.

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