Keeping score: U.S. bonds, European convertibles, Chinese IPOs
· US CORPORATE DEBT TOPS $20 BILLION, BREAKS RECORD
For the second consecutive week, the volume of corporate investment grade debt in the US market topped the $20 billion mark, bolstered by benchmark names in the energy & power and financial sectors. Shell International Finance raised $5 billion via Morgan Stanley, Bank of America Merrill Lynch and Deutsche Bank, while Canada’s Cenovus Energy raised $3.5 billion this week.
Investment grade debt activity from non-financial issuers totals $372.3 billion for year-to-date 2009, already besting the previous all-time record for annual non-financial activity set in 2001 when $360.5 billion in new corporate issues were brought to market.
· EUROPEAN CONVERTIBLE BONDS UP 50%
While global convertible bond activity is down 46% over 2008, the market for convertible bonds in Europe has picked up dramatically, with $24.1 billion in new convertible offerings – a 50% year-over-year increase. Issuers in the materials, financial and industrial sectors account for nearly 60% of this year’s volume in Europe. Deals from Anglo American, Arcelor Mittal and Alcatel Lucent top the list of convertible offerings this year.
Morgan Stanley leads the year-to-date European convertible bond league table with $4.6 billion or 19.2% of overall activity from 17 new issues this year. BNP Paribas and Calyon round out the top three underwriters.
· CHINESE IPOs UP 7% OVER 2008
With two multi-billion dollar initial public offerings this week, Chinese IPO activity totals $17.9 billion for year-to-date 2009, a 7% increase over last year at this time and one of the few markets to see gains over 2008. China Metallurgical Construction Corp raised $2.4 billion in the second largest Chinese IPO this year, while China National Pharmaceutical Group (Sinopharm) raised $1.1 billion on the Hong Kong Stock Exchange.
IPO activity in the industrials sector comprises 57% of year-to-date volume in China this year, followed by materials with 15% and healthcare with 10%.