A quarterly report containing brief commentary and statistics on the U.S. capital markets, including but not limited to: municipal debt, U.S. Treasury and agency debt, short-term funding and money market debt, mortgage-related, asset-backed and CDO debt; corporate bonds, equity and other, derivatives, and the primary loan market.
US Research Quarterly, First Quarter 2014 (Full Report)
Summary
Total Issuance Stays Flat in 1Q’14
Long-term securities issuance totaled $1.42 billion in 1Q’14, a 0.6 percent increase from $1.41 billion in 4Q’13 but a 12.7 percent decrease from $1.63 billion in 1Q’13. Issuance rose across four asset classes: Treasury, corporate bonds, federal agency, and asset-backed securities (ABS), while municipal bonds, mortgage-related issuance, and equity under-writing recorded declines.
Long-term municipal issuance volume totaled $60.4 billion in the first quarter of 2014, a decline of 17.7 percent and 25.7 percent, respectively, quarter-over-quarter (q-o-q) ($73.4 billion) and year-over-year (y-o-y) ($81.3 billion).
Total gross issuance of Treasury bills and coupons, including cash management bills (CMBs), was $1.74 trillion in 1Q’14, a 10.5 percent decrease from $1.94 trillion issued in 4Q’13 and an 11.7 percent decrease from 1Q’13’s issuance of $1.96 trillion. Including CMBs, issuance increased to $264.7 billion in Treasury securities in the first quarter, a slight increase from $263.8 billion in the previous quarter but a 24.3 percent decrease from $349.9 billion issued in 1Q’13.
Federal agency long-term debt (LTD) issuance was $84.12 billion in the first quarter, compared to $75.7 billion in 4Q’13.
Issuance of mortgage-related securities, including agency and non-agency passthroughs and collateralized mortgage obligations (CMOs), totaled $269.1 billion in the first quarter, a 28.4 percent decline from 4Q’13 ($375.6 billion) and a 53.9 percent decline y-o-y ($582.4 billion). The continued decline in issuance was in both agency issuance and non-agency volumes.
Asset-backed securities (ABS) issuance totaled $55.1 billion in the first quarter, an increase of 28.8 percent and 16.2 percent respectively, q-o-q ($42.8 billion) and y-o-y ($47.5 billion). The auto sector continued to lead issuance totals with $26.9 billion (48.8 percent of total issuance in 1Q’14), followed by credit cards ($14.8 billion, or 26.8 percent).
Corporate bond issuance totaled $374.1 billion in 1Q’14, 25.2 percent up from the $298.8 billion issued in 4Q’13 and 21.7 percent below 1Q’13’s issuance of $372.9 billion.
Equity underwriting decreased to $62.8 billion in the first quarter, 22.2 percent below the $80.7 billion in 4Q’13 and 17.5 percent below the $76.2 billion in 1Q’13. Secondary market issuance decreased to $43.6 billion on 276 deals in 1Q’14 from $52.8 billion on 256 deals in 4Q’13 (a decrease of 17.4 percent in volume but an increase of 7.8 percent in number of deals). “True” initial public offerings stood at $12.1 billion on 75 deals, a 51.2 percent decrease from $24.8 billion but a 2.8 percent increase from 73 deals in the previous quarter.