US Research Quarterly, 2012 Q4

Total Issuance Rises in Fourth Quarter 2012

Long-term securities issuance totaled $1.93 trillion in the fourth quarter of 2012, a 3.9 percent increase quarter-over-quarter (q-o-q) and a 31.5 percent increase year-over-year (y-o-y). For the full year, securities issuance reached $7.3 trillion, a 16.5 percent increase from 2011. Gains by dollar amount were concentrated in mortgage-related and corporate issuance while asset-backed securities issuance increased by percentage, but all categories except federal agency issuance increased from 2011.

In its December 12, 2012 release the Federal Open Market Committee (FOMC) maintained its position that economic conditions continued to warrant exceptionally low levels for the federal funds rate through mid-2015, but added new guidance that such rates would be maintained at least as long as: 1) the unemployment rate remains above 6.5 percent; 2) inflation over a 1-2 year time horizon is projected to be no more than 2.5 percent; and 3) long-term inflation expectations remain ‘well anchored’. The FOMC also announced additional Treasury purchases of $45 billion per month upon the expiration of ‘Operation Twist’ at end-2012, but altered purchase trends in order to maintain the same duration impact.

Total gross issuance of Treasury bills and coupons, including cash management bills (CMBs), was $2.07 trillion in 4Q’12, a 7.5 percent increase from $1.92 trillion issued in 3Q’12 and 17.8 percent increase from 4Q’11’s issuance of $1.75 trillion. During 2012, the U.S. Treasury issued $7.74 trillion in bills, CMBs, and coupons, a 4.7 percent increase from $7.39 trillion in the previous year.

Federal agency long-term debt (LTD) issuance was $136.8 billion in the fourth quarter compared to $187.2 billion in the 3Q’12, and fell 28.0 percent y-o-y. For the full year, federal agency issuance was $677.4 billion, a 19.3 percent decline from 2011 ($839.2 billion).

Long-term municipal issuance volume, including taxable and tax-exempt issuance, totaled $97.3 billion in the fourth quarter, an increase of 16.4 percent from the prior quarter ($83.6 billion) but a decline of 3.8 percent y-o-y. For the full year 2012, municipal issuance totaled $379.0 billion, just shy of the 10-year average ($381.3 billion) and a 28.6 percent increase from 2011.

Issuance of mortgage-related securities, including agency- and non-agency pass-throughs and collateralized mortgage obligations (CMOs), totaled $566.6 billion in 4Q’12, a 4.8 percent increase and 23.6 percent increase, respectively, from 3Q’12 ($540.4 billion) and 4Q’11 ($458.6 billion). For the full year, issuance was $2.1 trillion, a 24.3 percent increase from $1.7 trillion in 2011.

Asset-based securities issuance totaled $44.8 billion in the fourth quarter, a decline of 12.4 percent from 3Q’12 ($51.2 billion) but a 48.3 percent increase from 4Q’11 ($30.2 billion). For the full year 2012, issuance was $199.4 billion, a 58.0 percent increase from $126.2 billion in 2011.

Total corporate bond issuance totaled $364.6 billion in 4Q’12, 5.0 percent above the $347.1 billion issued q-o-q and 88.8 percent above the $193.1 billion issued in 4Q’11. For the full year, $1.34 trillion in corporate debt was issued, 33.8 percent above $1.01 trillion issued in 2011 and the highest annual issuance on record.

Equity underwriting was $63.6 billion in 4Q’12, 27.5 percent below the $87.8 billion in 3Q’12 but double the $31.5 billion in 4Q’11.

About the Report

A quarterly report containing brief commentary and statistics on the U.S. capital markets, including but not limited to: municipal debt, U.S. Treasury and agency debt, short-term funding and money market debt, mortgage-related, asset-backed and CDO debt; corporate bonds, equity and other, derivatives, and the primary loan market.


SIFMA Research

  • Managing Director, Director of Research: Kyle Brandon
  • Vice President, Director of Statistics: Charles Bartlett
  • Director: Sharon Sung
  • Analyst: Justyna Podziemska

SIFMA Capital Markets

  • Manager: Joseph Cox
  • Manager: Timothy Cummings
  • Manager: Craig Griffith