CUSIP Requests Pull Back In April Signaling Possible Slowdown In Corporate And Muni Bond Issuance Volume - Decline Follows Two Straight Months Of Surging Volume

CUSIP Global Services (CGS) today announced the release of its CUSIP Issuance Trends Report for April 2017. The report, which tracks the issuance of new security identifiers as an early indicator of debt and capital markets activity, found a slowdown in the pre-trade market for corporate and municipal bonds in April. This reduced demand for new CUSIP IDs for corporate and municipal bonds is suggestive of a possible slowdown in new security issuance volume over the coming weeks.

CUSIP identifier requests for U.S. and Canadian corporate debt and equity offerings totaled 2,043 in April, an 18% decrease from March 2017 totals. So far this year, demand for new CUSIPs for both corporate debt and equity offerings are up 38% over the same period in 2016, reflecting the strong pace of request volume observed during February and March of this year.

Municipal bond requests also decreased in April. A total of 930 muni identifier requests were made during the month, a decrease of 13% over March.  On a year-over-year basis, municipal bond request volume was down 24% through the end of April 2017.

“There are definitely some technical factors at play in this data, notably, reduced demand from mutual funds who had to issue new classes of shares to get into compliance with the Fiduciary Rule in January and February, but are now no longer required to do so,” said Gerard Faulkner, Director of Operations for CUSIP Global Services. “Whether April will turn out to be a technicality or a harbinger of trends to come remains to be seen.”

International debt and equity CUSIP International Numbers (CINS) volume also fell in April.  International equity CINS decreased 31% and international debt CINS decreased 24% during the month. On a year-over-year basis, international equity requests were down 15% and international debt requests were up 99%, reflecting continued volatility in international markets.

“We’re starting to see a pattern of on-again, off-again volume in new CUSIP requests as issuers juggle a great deal of uncertainty about the macroeconomic environment, the regulatory picture, and market volatility,” said Richard Peterson, Senior Director, S&P Global Market Intelligence. “Based on the relatively healthy volume of CUSIP requests that we’re still seeing, issuers still sees a window of opportunity, but they are approaching this marketplace with caution.”

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 April 2017: