Thomson Reuters Debt Capital Markets Review 2012

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GLOBAL DEBT CAPITAL MARKETS UP 10% FROM 2011

Overall global debt capital markets activity totaled US$5.6 trillion during full year 2012, a 10% increase from the comparable period in 2011 and the strongest annual period for global debt capital markets activity since 2009. Fourth quarter global debt activity totaled US$1.3 trillion, a 5% decrease compared to the third quarter of 2012 but a 28% increase from the fourth quarter of 2011.

STRONGEST YEAR FOR GLOBAL HIGH YIELD, INVESTMENT GRADE DEBT ON RECORD

The volume of global high yield corporate debt reached US$389.0 billion during full year 2012, a 38% increase compared to full year 2011 and the strongest annual period for high yield debt activity since records began in 1980. High yield issuance during the fourth quarter of 2012 totaled US$113.2 billion, narrowly surpassing the third quarter of 2012 and setting an all-time quarterly record. Issuers in the United States accounted for 72% of overall volume, up 49% from a year ago. The average coupon for fixed rate global high yield new issues during full year 2012 fell to 7.725%, ranking as lowest annual percentage on record. Global investment grade corporate debt totaled US$2.7 trillion during full year 2012, a 15% increase compared to 2011 and an all-time annual record.

FINANCIALS ACCOUNT FOR 50% OF 2012 DCM ACTIVITY

Debt capital markets activity in the financials sector totaled US$2.8 trillion during full year 2012, accounting for 50% of all new issues this year. Consumer products and real estate debt capital markets activity saw the strongest year-over-year growth, registering increases of 64% and 62%, respectively, over full year 2011, while new issues in the high technology sector saw year-over-year declines of 7%. Average deal size in the healthcare sector led all industries during full year 2012, with the average deal totaling US$957.4 million.

EMERGING MARKETS CORPORATE DEBT UP 32%, SETTING ALL-TIME RECORD

New issuance of corporate debt from emerging markets issuers totaled US$305.9 billion during full year 2012, a 32% increase from full year 2011 and the strongest annual period for emerging markets corporate debt since records began in 1980. Activity was led by issuers from Russia, India and Brazil which account for 52% of all emerging markets corporate debt this year.

JP MORGAN TOPS GLOBAL DEBT LEAGUE TABLES

Bolstered by strength in global investment grade and high yield corporate debt underwriting, JP Morgan took the top spot for full year 2012 debt underwriting with total proceeds of $438.6 billion and an increase of 1.0 market share point. Deutsche Bank moved into the number two spot during full year 2012, with 6.7% market share, while Barclays fell to third place with a 0.5 market share decline compared to full year 2011. Based on underwriting fees for full year 2012, JP Morgan topped all other underwriters with an estimated $1.9 billion, or 8.6% of overall fees this year.

28% INCREASE FOR DEBT UNDERWRITING FEES

According to Thomson Reuters/Freeman Consulting, estimated fees from debt capital markets activity totaled US$21.7 billion during full year 2012, up 28% from full year 2011. Fees from investment grade debt underwriting totaled US$10.4 billion, or 48% of the overall total, while fees from high yield debt totaled $6.1 billion or 28% of overall DCM fees. High yield underwriting fees increased 37% compared to full year 2011.

Source - Thomson Reuters

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