CUSIP Global Services’ (CGS) CUSIP Issuance Trends Report for June 2018, which tracks the issuance of new security identifiers as an early indicator of debt and capital markets activity, has revealed a found a fourth straight monthly increase in requests for new municipal bond identifiers, while CUSIP request volume for corporate equity and debt decreased in June.
CGS says this is suggestive of steady improvement in municipal issuance and continued volatility in corporate issuance for the second half of 2018.
CUSIP identifier requests for the broad category of US and Canadian corporate offerings, which includes both equity and debt, totalled 5,034 in June, up 12 per cent from May, mainly due to continued strength in bank certificate of deposit issuance. On a year-over-year basis, corporate identifier request volume for the first half of 2018 is 3.6 per cent higher than the same period in 2017. Overall corporate request volume was driven by 895 new requests for US corporate equity identifiers, 809 new requests for US corporate debt identifiers, and 384 requests for combined Canadian corporate debt and equity identifiers.
Municipal CUSIP requests showed a fourth consecutive monthly increase in volume in June, largely in part to mid-year peak notes issuance. The aggregate total of all municipal securities – including municipal bonds, long-term and short-term notes, and commercial paper – logged a 14.1 per cent increase over May levels. On a year-over-year basis, total municipal identifier request volume is down 17 per cent versus the same period last year. Prior to March, municipal bond issuance had been trending downward following the implementation of the Tax Cuts & Jobs Act, which repeals advanced refunding of municipal bonds.
“Municipal issuers have driven CUSIP request volume to a level we haven’t seen since November of last year,” says Gerard Faulkner, Director of Operations for CUSIP Global Services. “The increase is likely driven by a combination of pent up demand and a desire to secure funding before the Federal Reserve raises interest rates again.”
International debt and equity CUSIP International Numbers (CINS) both decreased in June. International equity CINS were down 25.2 per cent during the month, while international debt CINS decreased 4.9 per cent during the month. On a year-over-year basis, international equity requests were up 25 per cent and international debt requests were up 8.4 per cent, reflecting continued volatility in international markets.
