CUSIP Requests Pull Back in April Signaling Possible Slowdown in Corporate and Muni Bond Issuance Volume
Decline Follows Two Straight Months of Surging Volume
NEW YORK, NY, MAY 10, 2017 – CUSIP Global Services (CGS) today announced the release of its CUSIP Issuance Trends Report for April 2017. The report, which tracks the issuance of new security identifiers as an early indicator of debt and capital markets activity, found a slowdown in the pre-trade market for corporate and muni bonds in April. This reduced demand for new CUSIP IDs for corporate and muni bonds is suggestive of a possible slowdown in new security issuance volume over the coming weeks.
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CUSIP identifier requests for U.S. and Canadian corporate debt and equity offerings totaled 2,043 in April, an 18% decrease from March 2017 totals. So far this year, demand for new CUSIPs for both corporate debt and equity offerings are up 38% over the same period in 2016, reflecting the strong pace of request volume observed during February and March of this year.
Muni bond requests also decreased in April. A total of 930 muni identifier requests were made during the month, a decrease of 13% over March. On a year-over-year basis, muni bond request volume was down 24% through the end of April 2017.
“There are definitely some technical factors at play in this data, notably, reduced demand from mutual funds who had to issue new classes of shares to get into compliance with the Fiduciary Rule in January and February, but are now no longer required to do so,” said Gerard Faulkner, Director of Operations for CUSIP Global Services. “Whether April will turn out to be a technicality or a harbinger of trends to come remains to be seen.”
International debt and equity CUSIP International Numbers (CINS) volume also fell in April. International equity CINS decreased 31% and international debt CINS decreased 24% during the month. On a year-over-year basis, international equity requests were down 15% and international debt requests were up 99%, reflecting continued volatility in international markets.
“We’re starting to see a pattern of on-again, off-again volume in new CUSIP requests as issuers juggle a great deal of uncertainty about the macroeconomic environment, the regulatory picture, and market volatility,” said Richard Peterson, Senior Director, S&P Global Market Intelligence. “Based on the relatively healthy volume of CUSIP requests that we’re still seeing, issuers still sees a window of opportunity, but they are approaching this marketplace with caution.”
To view a copy of the full CUSIP Issuance Trends report, please click here.
Following is a breakdown of New CUSIP Identifier requests by asset class year-to-date, through April 2017:
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.