Debt Capital Markets Review - Dimon geezers remain top

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Global debt capital markets activity up 3%

Overall global debt capital markets activity totaled US$4.5 trillion during the first nine months of 2014, an uptick of 3% compared to 2013 and the strongest nine-month start for global debt capital markets activity since 2009. Third quarter global debt activity decreased 29% compared to the second quarter of 2014, marking the slowest quarter for global debt offerings since the fourth quarter of 2011.

US investment grade corporate debt extends record pace

High Grade corporate debt offerings targeted to the US marketplace totaled US$864.3 billion during the first nine months of 2014, an increase of 6% compared to a year ago and the strongest start for the asset class since records began in 1980. Companies based in the United States accounted for 59% of issuance, down from 64% during the first nine months of 2013. Issuers based in the United Kingdom accounted for 5% of US marketplace issuance during the first nine months of the year, followed by Canada and Japan, each with 4%.

Quarterly high yield volume falls 42%

The volume of global high yield corporate debt reached US$93.9 billion during the third quarter of 2014, a 42% decline compared to the second quarter of this year and the slowest quarter for global high yield issuance since the second quarter of 2012 (US$54.8 billion). High yield issuance from issuers in the U.S., the United Kingdom and France accounted for 64% of proceeds during the first nine months of 2014.

Financials account for 50% of DCM activity

Debt capital markets activity in the financials sector totaled US$2.2 trillion during the first nine months of 2014, accounting for 50% of all new issuance this year. Consumer products and healthcare activity saw the strongest year-over-year growth, each registering an increase of 16%, over a year ago. Average deal size in the telecom sector led all industries this year, with the average deal totaling US$1 billion.

Emerging markets corporate debt down 18%

New corporate debt from emerging markets issuers totaled US$244.1 billion during the first nine months of 2014, an 8% decrease from last year at this time. 54% of all emerging markets corporate debt during the half was raised by issuers in Brazil, India, Mexico and Malaysia. Corporate debt from issuers in Russia totaled US$12.4 billion, down 76% compared to the first nine months of 2013.

JP Morgan tops global debt league table

JP Morgan maintained the top spot global debt underwriting during the first nine months of 2014, with total proceeds of US$316.6 billion and a decrease of 0.6 market share points. Deutsche Bank maintained the second position, while Citi moved to third place from fourth. Barclays and Bank of America Merrill Lynch rounded out the top five.

Overall debt underwriting fees flat

According to Thomson Reuters/Freeman Consulting, estimated fees from DCM activity totaled US$17.9 billion during the first nine months of 2014, an increase of 3% year-on-year. Fees from high grade debt totaled US$8.1 billion (a 45% share), while fees from high yield debt totaled $4.9 billion (a 27% share). High yield fees decreased 1% compared to 2013, while global investment grade fees declined 3%.

Global Debt Equity Related (A1) Jan - Sep 2014: Thomson Reuters

Source: Thomson Reuters

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