DealZone

Keeping score: big-ticket M&A drought, bond bonanza

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

Keeping score: biotech, Chinese debt and European ECM

Here are some highlights from this week’s Thomson Reuters Investment Banking Scorecard.

Medarex boosts biotechnology M&A to $5.3 billion

Bristol-Myers Squibb’s $1.9 billion acquisition of Medarex lifted the volume of biotechnology M&A to $5.3 billion for year-to-date 2009, a 90% decrease from 2008 levels. Last year’s total was bolstered by the $46.7 billion acquisition of Genentech by Roche Holding. Excluding the Genentech transaction, biotechnology M&A volume is down 22% over 2008 levels. By number of deals, mergers in the sector are up 15% over last year.

With their advisory roles on the Medarex transaction, JP Morgan and Goldman Sachs top the ranking of biotechnology advisors for year-to-date 2009.

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

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.

Capital markets make up for M&A

Its half-year review time in investment banking, when London’s top firms gather up their heavyweights and engage with the press.

Each year a different business line takes the spotlight. In the pre-crisis boom times of 2007, M&A bankers held centre stage. Everybody wanted to talk to them. They were the most popular kids in school.

This year it was the turn of capital markets bankers to shine.

As my colleagues Douwe Miedema and Jessica Hall wrote earlier, mammoth bond sales and massive rights issues kept investment banking revenue rolling in in the second quarter.