Highlights from this week’s Thomson Reuters Investment Banking Scorecard:

·Nine Consecutive Weeks of IPO Filings in the US
Since late June, 32 Companies have filed to go public on US stock exchanges, marking nine consecutive weeks of IPO filings and the longest streak in over a year.  Notable names include Hyatt Hotels, Dole Foods, Dollar General and Ancestry.com.

·US Debt Capital Markets Activity Breaks Even
The volume of new debt offerings from US issuers totals $1.5 trillion for year-to-date 2009, exactly even with volume last year at this time.  US High Yield activity is up 139% over 2008 levels, totaling $72.4 billion from 166 offerings.

·Porsche-Volkswagen Tie-up Boosts M&A Rankings
As Porsche and Volkswagen prepare to merge operations, eight investment banks secured advisory roles in the transaction, boosting worldwide M&A rankings.  Most notably, Citi moved up one spot to third, while UBS moved to seventh from ninth.

·Switzerland Sells 9% Stake in UBS
The Swiss government sold a 9% stake in UBS on Thursday, raising $5.1 billion in proceeds and topping the week’s list of biggest equity offerings.  European follow-on common stock activity totals $125.1 billion, a 15% increase over last year at this time.

·Investor Group Raises Stake in Cathay Pacific Airlines
An investor group comprised of Air China and Swire Pacific acquired an additional 14.5% stake in Hong Kong-based Cathay Pacific Airlines in a deal valued at $948.2 million.  Year-to-date, Hong Kong target M&A totals $14.1 billion, a 76% decrease from 2008.

·Japanese Lending Down 1% from 2008
Taisei Corp, a Tokyo-based construction and engineering concern, secured a $1.6 billion revolving credit facility via Mizuho and Mitsubishi UFJ Financial Group, bringing Japanese syndicated lending activity to $168.9 billion, a 1% decline from last year.

Thomson Reuters data for July show the so-called “mid-market”, of deals below $500 million, has come off slightly compared to the month before, and steeply compared to the same month a year ago.

Year-to-date, JPMorgan is the busiest bank by dollar value of deals, displacing Credit Suisse, which falls from 1st to 6th. Freshfields overtakes Clifford Chance as the busiest legal outfit. A few highlights from the report:

“Global Mid-Market deal activity for July at US$40.8bn from 2,940 deals, down 6% from US$43.3bn from 3,284 deals in June. Down 42% compared to US$70.2bn from 3,627 deals in July 2008

“EMEA Mid-Market M&A activity for July at US$10.6bn (26% of total global mid-market activity), down 8.5% from June’s US$11.6bn, but down 54% compared to July 2008.

“JP Morgan topped the European Mid-Market M&A rankings, up from second position for the same period in 2008.

“Freshfields Bruckhaus Deringer ranked top legal adviser with 5.2% market share, up from second position for same period 2008″

Highlights from this week’s Thomson Reuters Investment Banking Scorecard:

“Islamic Financing Reaches $10.9 billion

“Malaysia state oil company Petronas lifted the volume of Islamic financing for year-to-date 2009 with a $1.5 billion sukuk offering that was part of a $4.5 billion global financing package via CIMB Securities, Citi and Morgan Stanley. Year-to-date, Islamic financing volume has reached $10.9 billion, a 30% decline from last year at this time when new offerings totaled $15.7 billion.

“Issuers from Malaysia, Saudi Arabia and Pakistan have accounted for over 80% of this year’s Islamic financing activity, while Energy & Power companies have raised just over 40% of the overall proceeds in the market this year.

“Infineon Offering Marks Biggest EMEA Tech Deal

“A $1.0 billion secondary offering from Germany’s Infineon Technologies marked the biggest high technology equity offering in Europe, Middle East and Africa this year, bringing activity in the sector to $2.4 billion, a 52% increase from last year at this time.  Excluding financials, EMEA follow-on activity totals $78.5 billion for year-to-date 2009, an increase of 72% over 2008.

“Including financials, secondary offerings in EMEA total $118.3 billion, 3% decrease from the same period a year ago.

“US “Blank Check” Acquisitions down 53% from 2008

“This week’s $582 million acquisition of Resolute Natural Resources by Hicks Acquisition Co marks the second biggest acquisition by a blank check company this year, behind Liberty Acquisition Corp’s $794 million offer for Pearl Group Ltd in June.  The volume of acquisitions by US blank check companies totals $2.4 billion from 34 deals for year-to-date 2009, a 53% decline from last year at this time.

“Since 2004, US blank check companies have raised over $18 billion in the equity capital markets from 117 offerings.”

It would be hard to describe July as a banner month for mergers and acquisitions.

Friday’s data from Thomson Reuters shows it was the first month since Sept. 2004 where announced deals totalled less than $100 billion, and the first month in almost six years without a single $5 billion-plus deal. But top executives are starting to talk M&A again, and bankers are starting to lay the groundwork for future deals. As Michael Erman and I wrote earlier:

“Bankers are pointing to early signs of a pick-up in mergers and acquisitions (M&A), with stronger stocks and easier credit conditions helping company bosses regain the confidence to do deals.

“Global announced M&A totaled $968 billion in January to June — little more than 40 percent of pre-crisis volumes in 2007 — and financiers do not expect a sudden return to the hectic dealmaking of the boom years.

“But they say an August holiday lull could be followed by an upswing toward the end of the year, based on more active discussions with clients and in some cases growing pipelines of future deals.”

Full story here. For full details of Deloitte’s recent CFO survey, which we referred to in our piece, click here.

Highlights and low points — syndicated loans, for example, at their lowest since 1993 — from the July Thomson Reuters Investment Banking Snapshots:

DEBT CAPITAL MARKETS

Asia Pacific & Chinese Issuers Reached New Corporate Bonds High in July - Asia Pacific issuers raised a record US$41bn in July, up 11% from June 2009 (US$43.3bn) and double the level of July 2008 (US$24.1bn). Chinese issuers accounted for 49% of the regions’ activity with a record US$23.4bn raised, up 3% from June 2009 (US$22.7bn) and up 218% from July 2008 (7.4bn). Financials (US$16.2bn, 70%) and Materials (US$4.7bn, 20%) were the main sectors driving the surge in China.

European High Yield Bonds Hit 2 Year High - Global issuance of high yield bonds reached US$12.3bn in July 2009, down 27% from June 2009 (US$16.7bn) but up 270% from July 2008 (US$3.3bn). This marked the third highest level of activity for a month of July on record and the best since 2003 (US$18.6bn). European issuers accounted for 44% of total with US$5.4bn raised, the highest monthly volume since June 2007. European activity consisted of two issues, Wind Acquisition Finance (US$3.7bn), the second largest HY bond of the year globally and the second largest European bond ever issued after NXP Semiconductor (US$5.95bn, 2006) and Fiat Finance & Trade ($US$1.8bn).

EQUITY CAPITAL MARKETS

Global ECM Up 22% in July as IPO Reached 14 Month High - Global ECM reached US$78.7 billion for the month of July up 22% when compared to the same month last year. Global IPO volumes reached a 14 month high with US$9.2bn, and account for 12% of the total ECM market for July. Global follow-on Issuance reached US$61.3bln for July this year, and accounts for 78% of ECM activity for this month. The largest ECM Issue of July was the US$12.27bln rights issue by Rio Tinto in the UK

BRIC Issuers Raised 26% of Global Equity in July - BRIC ECM accounts for 26% of global ECM issuance for July 2009 this is the largest level of activity for this region in 20 months, BRIC follow-on issuance has also reached an all time monthly high of 36 issues for July. BRIC market IPOs account for 93% of the total IPO activity for this month, which is due to one issue in particular — the China State Construction Engineering IPO worth US$7.3bln

Global ECM Pipeline for 2009 Currently Stands at US$93.9bln - Follow-ons (US$72bn) and IPOs (US$19bn) account for 77% and 20.2% of the pipeline respectively. Emerging market issuers could raise up to US$48.1bln or 51% of the total ECM pipeline.

SYNDICATED LOANS

Monthly Loan Issuance at its Lowest Since 1993 - Global issuance of syndicated loans in July 09 reached US$34.6bln, down 88% from July 08 (US$278bn) and marks the lowest level of monthly activity since October 1993 (US$28.7bn). On the year to date global issuance stands at US$820bn, down 54% from the same period last year (US$1,788bn). European loans issuance reached US$7.7bn in July 09, down 93% from July 08 (US$115bn) whilst US issuance reached US$11.6bn, down 90% from July 08 (US$115bn). The largest loan for July is US2.2bln US Georgia-Pacific Corp issue

MERGERS & ACQUISITIONS

First sub-$100 billion Month for Worldwide M&A since September 2004 -  Worldwide M&A totals $1.1 trillion for year-to-date 2009, a 43% decrease over 2008 levels.  With just $96 billion in announced deals this month, merger activity in July marks the first monthly period since September 2004 with less than $100 billion in volume.

Mid-Market M&A Bolsters July Activity; Shutout for Deals over $5 billion - For the first time in nearly six years, not one worldwide M&A transaction over $5 billion was announced in a monthly period.  Deals under $500 million accounted for 40% of overall activity in July, with 22% of mid-market deals coming from companies in the United States, 12% from deal activity in China and 7% from Japan.

Financials & Energy Power Top Sectors - Comprising 21% of overall activity for the month, financial target M&A was driven by activity in the insurance and banking sectors, while energy and power targets were lifted by activity in the oil & gas space.

Morgan Stanley Leads Worldwide Rankings; JP Morgan leads Mid-Market; Evercore moves into Top 5 in the US

The so-called “mid-market”, of mergers and acquisitions (M&A) valued at less than $500 million, is showing tentative signs of life.

On an initial reading, first-half deal data from Thomson Reuters suggests a market still struggling, with deals down 45.7 percent from a year earlier in dollar terms, to $213.3 billion. But on closer inspection, the second quarter reveals itself to have been busier than the first, and in fact home to a stronger rebound than the overall M&A market.

Granted, second-quarter M&A plunged 43 percent in dollar terms and 12 percent by number of deals, compared to the same period a year earlier. But compared to the first quarter, the number of deals actually rose 4 percent, while the dollar value of deals struck bounced 20 percent. (In the wider M&A market, the number of deals rose quarter-on-quarter by a similar amount, but dollar values fell 2 percent.)

So what’s going on? Corporate confidence may well have been lifted by big stock-market rallies starting in March, as the worst fears about the crisis have receded. And perhaps for bigger companies, the mid-market is where they can acquire bite-sized rivals without depending on the big bank loans that are now so hard to come by.

Alternatively, the light at the end of the tunnel may just be a gleam of summer sun: midmarket deals, measured by both deal numbers and dollar value, also bounced in the second quarters of both 2007 and 2008, compared to the first quarter of those years.

Among advisers, JPMorgan was the first half’s busiest mid-market adviser by value, UBS the busiest by number of deals, and Rothschild no.1 by estimated fees.

The Thomson Reuters Investment Banking scorecard lands again. Here are the highlights:

BAAT Offers Largest Auto Loan Securitization of 2009

A US asset-backed offering fell among the top global debt deals of the week, as Bank of America Auto Trust (BAAT) offered a $3.9 billion TALF-eligible auto loan securitization, the largest such ABS offering this year.  In total, auto loan backed issues have accounted for 35.7% of US ABS, the largest share of the approximately $80 billion so far in 2009.

As a whole, securitizations are down 30% in the US and 39% globally over 2008 levels.  This week marks the third largest week for ABS activity in the US during 2009 with $9.7 billion of issuance.

Bankruptcy-related M&A at Five Year High

Five bankruptcy-related M&A deals were announced this week, including the acquisition of venture-backed public company Nanogen by French investment holding company Financiere Elitech for $25.7 million.  Year-to-date, 173 bankruptcy-related deals have been announced, the highest level since the same period of 2004 when there were 202.

In 2009 the most bankruptcy-related M&A deals have occurred in the Industrials sector with 23.1%, followed by the media and entertainment sector with 16.2%.  By nation, US targets represent 83 deals or 48.0% of bankruptcy M&A.

Singapore Company Follow-On Activity at Record High

Among the largest equity deals of the week was a $984.6 million follow-on offering by Singapore-based Neptune Orient Lines.  Year-to-date, Singapore follow-on volume totals $7.8 billion from 20 issues, nearly 11 times higher than the same period in 2008 when volume was $707.3 million and the highest year-to-date volume ever.  Total equity and equity related volume in Singapore is also at all-time record levels in 2009, reaching $8.1 billion.

Equity and equity related volume in Asia Pacific stands at $75.6 billion so far this year, a 6% decrease from last year.

EMC on Monday increased its offer for Data Domain by 12 percent to $33.50 a share, valuing the specialty storage maker at $2.4 billion and raising stakes in a bidding war against rival NetApp.

EMC also removed a breakup fee from its offer for Data Domain and said it was ready to complete a deal within two weeks.

The battle for Data Domain, which began with an offer of $25 a share from NetApp,  has grown increasingly acrimonious. Last month, EMC took out a full-page ad in The San Jose Mercury News explaining to Data Domain’s employees why a deal with EMC is better than one with NetApp.

Data Domain, for its part, has maintained that a deal with NetApp makes more sense and raised questions about EMC’s motives. In an interview with The Mercury News, NetApp’s chief marketing officer called EMC’s bid a “defensive move to try to limit Data Domain’s growth.”

In an environment where getting any deal done is proving to be very difficult, this is a rare bidding war. And given the shaky markets, investors might prefer a cash bid.

Additionally, as the amount of data that companies store — and the cost to store it — is on the rise, demand for data-reduction technology, which boosts the efficiency of data storage equipment by deleting duplicate pieces of information, is likely to increase as well. This bidding war could drag on.

This week’s Thomson Reuters “Investment Banking Scorecard” is out. Here are the highlights:

“BHP/Rio Tinto Deal Changes Global M&A Landscape

“The announcement of a joint venture between Australia’s BHP Billiton and domestic rival Rio Tinto last Friday ranks as the second largest worldwide deal this year and may prove fruitful for some investment banks.  Advisors Gresham Partners, Lazard, Morgan Stanley, and Goldman Sachs will advise on the deal, translating to valuable deal activity in a year where M&A volume is down 43%.  Earlier this year, Chinalco announced a multi-continent $19 billion investment in Rio Tinto, which was withdrawn as a result of the new mega-deal.  Of the seven banks on the initial Chinalco deal, only Morgan Stanley, ranked first for worldwide M&A year-to-date, secured a role on the BHP deal.

“Real Estate Equity Capital Markets Activity up 85%

“Equity capital markets offerings from real estate issuers have soared so far in 2009, while activity in the M&A, DCM, and loans segments remains down from 2008.  Real estate ECM volume is up 85% over last year at $36.5 billion.  Activity in the Americas accounts for 44.7% of the total volume across the sector, followed by Asia (including Japan) with 36.6% and Europe with 18.4% share of the market.

“The recent follow-on offering from real estate investment trust Boston Properties for $862.5 million contributed to this total.

“Rising Interest Rates Slow Investment Grade Debt

“With rising US interest rates concerning investors, investment grade debt volume so far this week totals just $31.4 billion, the slowest weekly volume in nearly two months.  For the week, European activity accounted for 53% of volume, 19% from issuers in the Americas, 16% from Asia, and 12% from Japan.

Several large Asian and Japanese corporate deals this week contributed to a booming year for debt capital markets in Asia, where volume totals $172.5 billion year-to-date 2009, a 45% increase in over 2008.”

A few nuggets from the weekly Thomson Reuters “investment banking scorecard”:

U.S. investment-grade debt is enjoying a busy May (and the month’s not even over yet). Offerings total $70.9 billion from 61 issues so far this month, the largest monthly volume since last May’s record $143.3 billion.

Bolstered by energy and power companies, Indian syndicated lending volume totals $14.1 billion year-to-date. That makes it one of the few nations to experience a year-over-year volume increase, up 9% over 2008.

M&A’s still in the doldrums. Global M&A is down 38% year-on-year, at $693.1 billion. The decline is even more pronounced for European M&A (down 47%) and cross-border deals (54%), to say nothing of private equity (off 77%).

The full pdf is here: weekly_scorecard_052109