US Research Quarterly, Second Quarter 2014


Long-term securities issuance totaled $1.45 trillion in 2Q’14, a 2.1 percent increase from $1.42 trillion in 1Q’14 but a 14.1 percent decrease from $1.69 trillion in 2Q’13. Issuance rose across four asset classes: Treasury, corporate bonds, federal agency, and asset-backed securities (ABS), while municipal bonds, mortgage-related issuance, and equity under-writing recorded declines.

Long-term municipal issuance volume totaled $88.1 billion in the second quarter of 2014, a increase of 38.7 percent quarter-over-quarter (q-o-q) (from $63.5 billion) and a decline of 7.8 percent year-over-year (y-o-y) ($95.6 billion).

Total gross issuance of Treasury bills and coupons, including cash management bills (CMBs), was $1.71 trillion in 2Q’14, a 3.6 percent decrease from $1.77 trillion issued in 1Q’14 and a 12.3 percent decrease from 2Q’13’s issuance of $1.95 trillion. The U.S. Treasury net issuance including CMBs decreased significantly to a net redemption of $64.5 billion in the second quarter, a much different outcome than net issuance of $264.7 billion in the previous quarter but a similar result 2Q’13’s redemption of $10.7 billion in securities.

Federal agency long-term debt (LTD) issuance was $53.3 billion in the second quarter, compared to $93.8 billion in 1Q’14.

Issuance of mortgage-related securities, including agency and non-agency passthroughs and collateralized mortgage obligations (CMOs), totaled $276.2 billion in the second quarter, a 2.0 percent increase from 1Q’14 ($270.6 billion) and a 50.5 percent decline y-o-y ($558.3 billion).

Asset-backed securities (ABS) issuance totaled $59.2 billion in the second quarter, an increase of 29.8 percent and 8.9 percent respectively, q-o-q ($54.4 billion) and y-o-y ($29.8 billion).

Corporate bond issuance totaled $411.15 billion in 2Q’14, 9.6 percent up from the $375.1 billion issued in 1Q’14 and 21.1 percent below 2Q’13’s issuance of $339.6 billion.

Equity underwriting increased to $93.6 billion in the second quarter, 48.8 percent above the $62.8 billion in 1Q’14 and a 16.5 percent increase from the $80.3 billion in 2Q’13. Secondary market issuance increased to $55.0 billion on 237 deals in 2Q’14 from $42.2 billion on 254 deals in 1Q’14 (an increase of 30.5 percent in volume but a decrease of 6.7 percent in number of deals). “True” initial public offerings, which exclude closed-end mutual funds, increased in 2Q’14 to $22.9 billion on 89 deals, an 89.1 percent increase from $12.1 billion and a 18.7 percent increase from 75 deals in the previous quarter.

The Fed reaffirmed that the exceptionally low range for the target Fed Funds rate of 0-0.25 percent will remain appropriate. With the unemployment rate nearing 6.5 percent, changes to the target range for the federal funds rate will be determined based on the progress, both realized and expected toward the Committee’s objectives of maximum employment and 2 percent inflation.

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.

Table of Contents

US Research Quarterly, Second Quarter 2014 (Full Report)

  1. Capital Markets Overview
  2. Municipal Bond Market
  3. Treasury Market
  4. Federal Agency Debt Market
  5. Funding and Money Market Instruments
  6. Mortgage-Related Securities
  7. Asset-Backed Securities
  8. US Collateralized Loan Obligations (Creditflux)
  9. Corporate Bond Market
  10. Equity and Other Markets
  11. Derivatives
  12. Primary Loan Market (Thomson Reuters LPC)
  13. Secondary Loan Market (Thomson Reuters LPC)

Total Issuance Rises Slightly in 2Q’14


SIFMA Research

  • Managing Director, Director of Research: Kyle Brandon
  • AVP, Research: Sharon Sung
  • Senior Associate, Research: Justyna Podziemska
  • Intern, Research: Dillon Rupp
  • Municipal ULF Intern: Binghui Jiang
  • Municipal ULF Intern: Suxian Lin

SIFMA Capital Markets

  • Senior Associate: Joseph Cox
  • AVP: Craig Griffith