U.S. Corporate And Municipal Debt Issuance Poised To Surge, CUSIP Requests Show
Pre-Trade Corporate Debt Activity Reaches Highest Level of 2016
NEW YORK, NY, June 16, 2016 – CUSIP Global Services (CGS) today announced the release of its CUSIP Issuance Trends Report for May 2016. The report, which tracks the issuance of new security identifiers as an early indicator of debt and capital markets activity, suggests continued growth in issuance of new corporate and municipal debt offerings over the next several weeks.
Total CUSIP requests for new U.S. corporate debt increased 14% over April totals, with a total of 877 new identifiers requested over the course of May. This marked the highest monthly volume of CUSIP requests for corporate debt identifiers since July 2015. Requests for new CUSIP identifiers for U.S. equity identifiers increased 12% over the same period. On a year-over-year basis, corporate CUSIP request volume for both debt and equity asset classes across the U.S. and Canada was down 17% through May 2016 versus May 2015, reflecting weak volumes in January 2016 and comparatively strong issuance volumes in the early part of 2015.
The volume of requests for new municipal CUSIP identifiers saw a fourth consecutive month-to-month increase in May. A total of 1,740 new municipal bond identifier requests were made over the course of the month, a 21% increase from April. On a year-over-year basis, municipal bond identifier requests were down 2% in May.
Regionally, municipal bond issuers in Texas demanded the highest volume of new CUSIP identifiers in May, accounting for a total of 171 identifier requests during the month. For the first five months of 2016, municipal debt issuers in Texas accounted for roughly 10% of all municipal CUSIP request volume.
“The sheer volume of requests for IDs for new debt instruments is sending a clear signal that issuers are indeed gearing up for new offerings,” said Gerard Faulkner, Director of Operations for CUSIP Global Services. “While, at the absolute level, we’re still behind where we were at this time last year, the recent trend in month-to-month increases has become hard to ignore.”
International debt and equity CUSIP International Numbers (CINS) were mixed in May. Requests for new international debt CINS were up 34%, while requests for new equity CINS were down 37%. On a year-over-year basis international debt CINS were down 32% and international equity CINS were down 61% through May 2016.
“With key economic data showing persistently weak growth numbers, interest rates continue to stay low and create an environment where corporations and municipalities can’t resist issuing new debt,” said Richard Peterson, Senior Director, S&P Global Market Intelligence. “Until the broader economy starts showing some signs of more significant recovery, we expect this trend to continue.”
Following is a breakdown of New CUSIP Identifier requests by asset class year-to-date, through May 2016:
About CUSIP Global Services
The financial services industry relies on CGS’ unrivaled experience in uniquely identifying instruments and entities to support efficient global capital markets. Its extensive focus on standardization over the past 45 years has helped CGS earn its reputation as a trusted originator of quality identifiers and descriptive data, ensuring that essential front- and back-office functions run smoothly. Relied upon worldwide as the industry standard provider of reliable, timely reference data, CGS is also a founding member and co-operates the Association of National Numbering Agencies (ANNA) Service Bureau, a global security and entity identifier database for over 34 million public and privately traded instruments, contributed by 92 national numbering agencies and 27 partner agencies representing 255 different countries. CGS is managed on behalf of the American Bankers Association (ABA) by S&P Global Market Intelligence, with a Board of Trustees that represents the voices of leading financial institutions. For more information, visit www.cusip.com.
About The American Bankers Association
The American Bankers Association represents banks of all sizes and charters and is the voice for the nation’s $13 trillion banking industry and its 2 million employees. Learn more at www.aba.com.
U.S. Corporate And Municipal Debt Issuance – May Activity
Following April’s decline, the number of CUSIPs requested in May for upcoming corporate securities rose to the second-best monthly of the year. According to data from CUSIP Global Services, the total count for corporate CUSIP orders in May was 3,544 compared to 3,466 in April. The largest component in this category in May was the 877 security identifier requests for upcoming domestic corporate debt issues. This result marks the strongest monthly showing for domestic corporate debt CUSIP orders this year and the best monthly showing since July 2015 when 950 CUSIPs were sought. Still, despite the recent strong showing, year to date domestic corporate debt CUSIP orders in 2016 lags year ago volume as 3,381 identifier orders have been handled this year compared to 4,313 a year ago, a nearly -22% drop. Also, showing gains last month were CUSIP orders for domestic corporate equity issues which advanced to 799 from 713 in April, representing the best showing since March’s count of 807 CUSIP orders.
Municipal CUSIP demand in May saw 1,740 orders compared to April’s count of 1,443. Long term muni note CUSIP order volume totaled 36 last in May compared to 26 requests in April. Short term note muni CUSIP orders continued to slip as 62 orders were handled last month versus 83 in April. For this asset class, the results were slowest month since February when 57 CUSIPs were sought. For the first five months of 2016 total municipal CUSIP orders, including all asset classes, totaled 7,465 down -1.2% from the count of 7,556 set in the first five months of 2015. CUSIPs for scheduled public finance offerings from Texas issuers were the most active in May as 171 CUSIPs orders took place. For the first five months of 2016 Texas municipal CUSIP orders ranks first with 782 requests, or about 10% of all orders. New York State was next with 544 municipal CUSIP orders.
CUSIP activity for upcoming international equity and international debt issues continued to move on divergent paths. International equity CUSIP orders fell to their 2016 lows as just 127 identifiers were sought last month. On the other hand, international debt CUSIP demand in May totaled 265 the strongest month showing this year and the strongest showing since June 2015 when 297 CUSIPs were ordered. For the first five months of 2016 international equity CUSIP orders have dropped -61% from the year ago while international debt CUSIP demand has declined -32%. Meanwhile, total PPN CUSIP order volume ended May 2016 with 225 requests were compared to 257 in April.