U.S. Corporate Issuance Up In July, CUSIP Requests Show Municipal Requests Decline 30% Largely Due To State Fiscal Timing

CUSIP Global Services (CGS) today announced the release of its CUSIP Issuance Trends Report for July 2016. The report, which tracks the issuance of new security identifiers as an early indicator of debt and capital markets activity, shows an increase in corporate requests but a drop in municipal requests.

Overall, corporate requests were down 1.3% in July, due to lower CD issuance. Excluding that, U.S. and Canadian requests were up 5.25% in July. Domestic corporate debt requests totaled 836, the second best showing of the year, and domestic equity requests reached 840 in July, the best monthly showing of 2016. However, on a year-over-year basis, corporate debt and equity CUSIP request volume for the U.S. and Canada was down 12.4%, reflecting difficulties in past months.

Municipal requests were down in July, marking an end to five straight months of increases. Requests dropped from 1,754 in June to 1,218 in July, a decline of 30%, driven largely by states beginning their fiscal years. However, because of strong activity in the first half of the year, overall municipal bond CUSIP requests are still up 1% on a year-over-year basis.

As usual, Texas lead the way with muni CUSIP requests, with 1,211 so far in 2016. Next came New York, with 960, and then California, with 734.

“Recent issuance data suggest that capital markets activity is still solid, despite a lot of uncertainty” said Gerard Faulkner, Director of Operations for CUSIP Global Services. “Based on July’s data, the second half of the year is off to a good start.”

Both international debt and equity CUSIP International Numbers (CINS) fell in July. International equity CINS fell from 188 in June to 168 in July, while international debt CINS dropped from 241 to 213. On a year-over-year basis, equity requests were down 60% and debt requests were down 27%.

“With ongoing economic and political instability, particularly in Europe, it makes sense this pre-capital markets activity would continue to show softness, in comparison to the U.S.” said Richard Peterson, Senior Director, S&P Global Market Intelligence. “Given that governments have a ways to go before settling on solutions, we expect issuance to remain weak for the foreseeable future.

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 July 2016: