About the Report
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.
Summary
Total Issuance Increases in 2Q’15
Long-term securities issuance totaled $1.76 trillion in 2Q’15, a 3.1 percent increase from $1.71 trillion in 1Q’15 and a 10.1 percent increase year-over-year (y-o-y) from $1.60 trillion in 2Q’14. Issuance fell quarter-over-quarter (q-o-q) across three asset classes: federal agency, asset-backed and equity while the remainder recorded increases.
Long-term public municipal issuance volume came in at $110.4 billion for 2Q’15, an 6.2 percent increase q-o-q ($104.0 billion) and 32.7 percent increase y-o-y ($83.2 billion). With private placements included ($2.5 billion), long-term municipal issuance for 2Q’15 was $113.0 billion, a 5.3 percent and 25.2 percent increase, respectively, q-o-q and y-o-y.
Total gross issuance of Treasury bills and coupons, with cash management bills, Floating Rate Notes and Treasury Inflation-Protected Securities included, was $1.69 trillion in 2Q’15, which was unchanged from 1Q’15 and a 1.1 percent decrease from 2Q’14’s issuance of $1.71 trillion. U.S. Treasury net issuance, including CMBs, fell sharply to $56.6 billion in the second quarter, a 51.5 percent decrease from $116.6 billion issued in the previous quarter but a much higher outcome than 2Q’14’s net redemption of $64.50 billion. Net issuance for the second quarter was 4.1 percent below the Treasury’s May net borrowing estimate of $59.0 billion.
Federal agency long-term debt issuance was $88.9 billion in the second quarter, compared to $130.19 billion in 1Q’15 and $69.4 billion in 2Q’14.
Mortgage-related securities issuance, which includes agency and non-agency passthroughs as well as collateralized mortgage obligations (CMOs), reached $441.2 billion in 2Q’15, a 27.0 percent increase q-o-q ($347.5 billion) and a 44.7 percent gain y-o-y ($304.9 billion). Increases were driven entirely by improvements in agency issuance, as non-agency volumes declined both q-o-q and y-o-y.
Asset-backed securities (ABS) issuance reached $60.1 billion in 2Q’15, falling 2.7 percent and 14.8 percent, respectively, q-o-q and y-o-y. The auto industry continued to lead issuance totals with $27.7 billion (46.1 percent of total 2Q’15 issuance), followed by credit cards ($8.8 billion, or 14.7 percent).
Corporate bond issuance stood at $442.6 billion in the second quarter, a 1.7 percent increase from the $435.0 billion issued in 1Q’15 and 3.5 percent above 2Q’14’s issuance of $427.8 billion. Both the investment grade and high yield issuance showed quarterly increases with HY bonds’ issuance increasing at a slightly faster pace.
Equity underwriting fell 9.5 percent to $81.0 billion in 2Q’15 from $89.5 billion in the previous quarter and down 14.2 percent y-o-y, but was 13.3 percent above the five-year average of $71.5 billion. The number of equity underwriting deals dropped to 301, down 6.2 percent q-o-q and 17.5 percent from 2Q’14. The average deal size dropped to $269.2 million in 2Q’15, a decline of 3.5 percent q-o-q but a 4.0 percent gain y-o-y.
August 19, 2015