Equity capital markets (ECM) activity totaled US$167.5bn for first quarter 2010, a 138% increase over first quarter 2009 when new issuance totaled US$70.4bn. This quarter marks the best annual start for global equity capital markets activity since the first quarter of 2007. Global follow-on offerings totaled US$101bn, accounting for 60% of overall activity this year and registering a 63% increase over the first quarter of 2009. The market for global initial public offerings saw its strongest opening quarter for new listings since 2000 with US$46.4bn in issues, bolstered by multi-billion dollar offerings from companies in the BRIC regions which account for 49% of IPO volume this year. JP Morgan led all equity capital markets underwriters for the second consecutive year with US$14.8bn in proceeds from 82 issues.
Overall global debt capital markets (DCM) activity totaled US$1.5tr during the first quarter of 2010, a 10% decrease over last year when volume reached US$1.7tr. First quarter activity is up on a consecutive basis, with a 37% increase over the fourth quarter of 2009. The volume of global corporate high yield debt reached US$75.5bn during first quarter 2010, breaking all quarterly records for corporate high yield debt issuance. Debt capital markets activity from Asia Pacific issuers, the only region to see positive year-over-year gains, increased 2% compared to first quarter 2009 totals. Bank of America Merrill Lynch is the lead bookrunner to global DCM issuance, with US$132bn in underwriting and 8.6% of the market.
Global syndicated lending activity continued to decline, with first quarter volume standing at US$460.6bn. Of this total, US$403bn, or 87%, saw wider syndication, while the remaining US$57.6bn were structured as club deals. Proceeds from the Americas comprised 39.7% of total first-quarter syndicated lending. This marked a departure from the first quarter of 2009 in which Europe controlled the majority of the market at 36.7%. Japanese and Asian lending stood at 19.5% and 12.7% of total global proceeds, both near historic highs.
"If the levels of activity in the first quarter are any indication, we have reason to be more optimistic for the year ahead", said Neil Masterson, Global Managing Director of Investment Banking at Thomson Reuters. "The high-yield markets are seeing record global issuance, indicating investor confidence and bolstering Investment Banking fees. Bookrunning fees continue to outpace M&A advisory fees with DCM contributing 32% to the fee pool. M&A activity is slower than the previous quarter, but up from year ago levels in the US and Asia and for private-equity related M&A. The equity capital markets continue their recovery driven largely by emerging market IPOs and a robust global pipeline."
