Keeping score: UK targets, U.S. debt, industrial equity

July 17, 2009

If it’s Friday it must be Thomson Reuters Investment Banking Scorecard day. There’s a slogan for you. Anyway, here are the highlights:

Industrial Sector ECM Shows Increase Over Last Year

Bolstered by this week’s follow-on offering from Japanese airline services provider All Nippon Airways for $1.5 billion, total equity capital markets activity across the industrials sector reached  $26.5 billion, a 2% increase from the same period last year when volume was $25.9 billion.

Other large equity offerings this week came from Asian issuers including $5.5 billion from Japan’s Mizuho Financial and $1.5 billion from India’s Sterlite Industries, bringing weekly volume for the region to $9.8 billion, the second biggest week this year.

UK Target M&A Volume Rises 39% Over Last Year

Two United Kingdom target deals fell among the biggest M&A transactions of the week including the $2.7 billion acquisition of insurance company Friends Provident by investment management services provider Resolution and the $1.7 billion purchase of oil and gas exploration company Venture Production by domestic rival Centrica Resources.

Year-to-date United Kingdom target M&A is up 39% over last year.  Deals in the financials and materials sectors account for the bulk of activity with a combined 82% of volume.

US Debt Volume Falls to Seven Month Low

US debt volume totals $5.4 billion so far this week, the slowest weekly level so far in 2009.  The largest US transaction of the week was a $1.3 billion investment grade offering from medical technology company Care Fusion followed by a $1 billion note from Fannie Mae.

Global debt volume is up 13% so far this year while activity in the US is down just 1%.  Corporate and agency debt have driven global volume, accounting for 75% of total proceeds year-to-date.”

As an aside, impressive as the leap in UK M&A volumes may be, both Resolution-Friends and Centrica-Venture are by no means done deals. In fact, as I wrote earlier, these and other situations — notably Xstrata’s proposed merger with Anglo American — point to a pickup in unsolicited and sometimes downright hostile bid activity.

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