Thomson Reuters Global Debt Capital Markets Review Jan

Overall global debt capital markets activity totaled US$4.2 trillion during the first nine months of 2012, a 4% increase from the comparable period in 2011. Bolstered by a resurgent corporate debt market, third quarter global debt activity totaled US$1.3 trillion, a 9% increase compared to the second quarter of 2012 and 30% increase from the third quarter of 2011, which ranked as the slowest quarter for global debt activity since the fourth quarter of 2008.

STRONGEST QUARTER FOR GLOBAL HIGH YIELD DEBT ON RECORD

The volume of global high yield corporate debt in the third quarter reached US$110.3 billion, more than doubling second quarter 2012 activity and marking the strongest quarter for high yield debt activity since records began in 1980. High yield issuance for the first nine months of 2012 increased 12% over 2011 levels. Issuers in the United States accounted for 72% of overall volume, up 28% from a year ago. Financial companies led issuance during the first nine months of 2012, with 18.7% of overall activity, an increase of 24% compared to 2011, while companies in the consumer products sector saw the strongest year-over-year increase, up 53% compared to 2011 activity. The average coupon for fixed rate global high yield new issues during the third quarter of 2012 fell to 7.354%, ranking as lowest quarterly percentage on record.

FINANCIALS ACCOUNT FOR 50% OF 2012 DCM ACTIVITY

Debt capital markets activity in the financials sector totaled US$2.1 trillion during the first nine months of 2012, accounting for 50% of all new issues this year. Consumer products and consumer staples debt capital markets activity saw the strongest year-over-year growth, registering increases of 61% and 51%, respectively, over the first nine months of 2011, while new issues in the high technology sector saw year-over-year declines of 35%. Average deal size in the healthcare sector led all industries during the first nine months of 2012, with the average deal totaling US$850.9 million.

QUARTERLY EMERGING MARKETS DEBT UP 27%

New issuance of corporate debt from emerging markets issuers totaled US$104.4 billion during the third quarter of 2012, a 27% increase from second quarter levels. For the first nine months of 2012, emerging markets corporate debt increased 19% compared to 2011 levels. Activity was led by issuers from India, Brazil, and Russia, which accounted for 42% of all emerging markets corporate debt this year.

JP MORGAN TOPS GLOBAL DEBT LEAGUE TABLES

Bolstered by strength in global investment grade and high yield corporate debt underwriting, JP Morgan took the top spot for the first nine months of 2012 with total proceeds of $329.4 billion and an increase of 0.9 market share points. Deutsche Bank fell to the number two spot during the first nine months of the year, with 6.7% market share, while Barclays retained third place with a 0.3 market share decline compared to the first nine months of 2011. Based on underwriting fees for the first nine months of 2012, JP Morgan topped all other underwriters with an estimated $1.4 billion, or 8.7% of overall fees so far this year.

15% INCREASE FOR DEBT UNDERWRITING FEES

According to Thomson Reuters/Freeman Consulting, estimated fees from debt capital markets activity totaled US$15.7 billion during the first nine months of 2012, up 15% from the first nine months of 2011 and up 28% from the second quarter of this year. Fees from investment grade debt underwriting totaled US$7.8 billion, or 50% of the overall total, while fees from high yield debt totaled $4.2 billion or 27% of overall DCM fees.