Debt capital markets review Q1 2018: Citi takes crown

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Global debt capital markets activity falls 9%

Overall global debt capital markets activity totaled US$1.8 trillion during the first quarter of 2018, a 9% decrease compared to the first quarter of 2017 and the slowest opening period for global debt capital markets activity since 2014. First quarter global debt activity increased 16% compared to the fourth quarter of last year.

US investment grade corporate debt falls to five-year low

High grade corporate debt offerings targeted to the US marketplace totaled US$313.7 billion during the first quarter of 2018, a 22% decrease compared to 2017. Despite triple-digit percentage gains in the Retail, Materials and Consumer Staples sectors, the first quarter of 2018 marks the first year-over-year decline for the asset class since 2013.

Global high yield falls 32%

The volume of global high yield corporate debt reached US$88.8 billion during the first quarter of 2018, a decline of 32% compared to the first quarter of 2017 and the slowest first quarter for global high yield issuance in two years. United States high yield issuers accounted for 48% of the quarterly total, down from 53% a year ago. The United Kingdom and China accounted for 11% and 8%, respectively. High yield offerings from Energy & Power issuers accounted for 19% of first quarter activity, up from 9% during the first quarter of 2017.

Retail offerings surpass US$50 billion; tech, media & telecom lead decliners

Bolstered by CVS Health's $39.6 billion bond financing to fund its purchase of Aetna, DCM activity from Retail issuers totaled US$51.2 billion during the first quarter of 2018, registering an industry-leading increase of 249% compared to year- ago levels. Technology, Media and Telecom activity saw the steepest year-over-year declines, registering a combined decrease of 63%. Financials and Government & Agency issuers accounted for 73% of global debt offerings during the first quarter, a one percentage point increase from a year ago.

Emerging markets corporate debt down 17%

Corporate debt from emerging markets issuers totaled US$71.2 billion during the first quarter of 2018, down 17% compared to last year. Corporate debt issuers from India, Russia Brazil and United Arab Emirates accounted for 46% of first quarter 2018 activity. Issuance from corporations in Russia totaled US$7.5 billion, up 43% compared to levels seen during the first quarter of 2017.

Citi tops global debt league table

Citi narrowly took the top spot for global debt underwriting during the first quarter 2018 with proceeds of US$118.6 billion and 6.7% share of the market. JP Morgan fell to second place with a market share decline of 0.3 points, while Bank of America Merrill Lynch maintained third place. Morgan Stanley fell to eighth place from sixth a year ago, with an downtick of 1.2 market share points.

Overall debt underwriting fees decrease 15%

According to estimates, underwriting fees from DCM activity totaled US$6.7 billion during the first quarter of 2018, an decrease of 15% year-on-year.

Global Debt, Equity & Equity Related (A1) 2018: Thomson Reuters

Source: Thomson Reuters

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