The first three quarters of 2020 have seen the highest level of equity capital markets and debt capital markets activity since 1980.
Debt capital markets (DCM) and equity capital markets (ECM) have continued their exceptionally busy run this year, with the first nine months of 2020 showing the highest ever level of issuance activity according to Refinitiv, which began compiling data in 1980.
Global DCM activity reached a record-breaking $8.1tn during the first nine months of 2020, a 32% year-on-year increase compared with 2019. The number of new offerings brought to market during the first nine months of 2020 surpassed 20,000 for the first time on record. However, there were signs of the market beginning to slow, with issuance during the third quarter decreasing by 21% compared with the second quarter.
US investment-grade corporate offerings continued to be a major driver of activity. September – along with April, May and June – was one of the four busiest months on record for issuance in this category, with $163.6bn-worth of capital raised. There was a small increase in emerging markets corporate debt issuance, which totalled $269.3bn, up 3% on 2019 and reaching an all-time high.
This has also been a busy period for high-yield issuance, which reached $415.2bn globally over the opening nine months of the year, the highest total on record. As with investment-grade offerings, the US market has been a major contributor to these totals, accounting for 66% of overall 2020 activity.
US investment-grade corporate offerings continued to be a major driver of activity.
ECM activity has also been booming, totalling $750.7bn during the first nine months of 2020, a 59% increase compared with the same period in 2019. By number of issues, more than 4200 ECM offerings were brought to market during the first nine months, a 29% increase compared with a year ago and another all-time record.
Increases in issuance were not limited to any one particular region, with activity up 61% by US issuers, a 71% spike in Asia-Pacific and a 56% increase by Europe, the Middle East and Africa issuers.
The overall total includes $137.1bn-worth of convertible offerings, the highest level during the first nine months of a year on record, with 51% of activity accounted for by technology, industrials and healthcare companies.
The wave of issuance also included a record number of secondary offerings worth $476.7bn during the first nine months of 2020, a 78% increase compared with a year ago and the strongest first nine months on record.
Following a relatively slow start to the year, global initial public offering (IPO) activity continued to pick up in the third quarter reaching $76.7bn, more than doubling the volume of activity seen during the second. Across the full nine-month period, globally, there were $137bn-worth of IPOs, a 26% increase on 2019.
This article first appeared in the November edition of The Banker.
