CUSIP Global Services (CGS) today announced the release of its CUSIP Issuance Trends Report for December 2016. The report, which tracks the issuance of new security identifiers as an early indicator of debt and capital markets activity, found a notable slowdown in the pre-trade market for corporate securities and municipal bonds for the second straight month of December.
CUSIP identifier requests for U.S. corporate debt and equity offerings totaled 1,647 in December, a 3% decrease from November totals. Across the corporate securities category, December marked the slowest month for new identifier request volume since May of 2016. On a year-over-year basis, corporate debt and equity CUSIP requests for the Americas was flat with 2015 year-end totals.
Municipal bond requests also fell in December, with 900 muni identifier requests processed in the month, a 27% decline from November levels. Still, total municipal bond request volume was up 6% on a year-over-year basis, reflecting a strong appetite for new issuance throughout the majority of 2016.
“The new issuance market is clearly signaling a sense of uncertainty about future issuance volume as we head into 2017,” said Gerard Faulkner, Director of Operations for CUSIP Global Services. “With all signs pointing to a higher rate environment this year, it will be interesting to see whether issuers resume the frenetic pace we saw throughout 2015 and 2016 or whether they will revert to more historically normal volumes.”
International debt and equity CUSIP International Numbers (CINS) volume were mixed again in December. International equity CINS increased 3%, while international debt CINS decreased 24% during the month. On a year-over-year basis, international equity requests were down 51% and international debt requests were down 1%, reflecting a volatile year of new instrument issuance activity in international markets.
“The combination of a strong stock market response to the election, a Fed rate rise and collective uncertainty about the transition of power in the White House, it is of little surprise that issuers have signaled a pause during the month of December,” said Richard Peterson, Senior Director, S&P Global Market Intelligence. “We will continue to watch the CUSIP indicator as a key temperature gauge for new issuance volume as we head into the New Year.”
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 December 2016:
|
Asset Class |
2016 ytd |
2015 ytd |
YOY Change |
|
Long Term Municipal Notes |
483 |
349 |
38.4% |
|
CDs < 1 yr Maturity |
4489 |
3808 |
17.9% |
|
Municipal Bonds |
15,714 |
14,802 |
6.2% |
|
Private Placement Securities |
2816 |
2724 |
3.4% |
|
U.S. & Canada Corporates |
22,855 |
22,872 |
0.0% |
|
CDs > 1 yr Maturity |
8138 |
8438 |
-3.6% |
|
International Debt |
2771 |
2808 |
-1.3% |
|
Short Term Municipal Notes |
1150 |
1410 |
-18.4% |
|
International Equity[1] |
2138 |
4332 |
-50.6% |
[1] “International” Equity refers to market requests for CUSIP International Numbers (“CINS”) for non-U.S. equity offerings
