US Research Quarterly, Third Quarter 2016

Total issuance increased in 3Q’16 quarter-over-quarter and year-over-year.

Long-term securities issuance totaled $1.94 trillion in 3Q’16, a 1.1 percent increase from $1.92 trillion in 2Q’16 and a 19.4 percent increase year-over-year (y-o-y) from $1.62 tril-lion. Issuance rose quarter-over-quarter (q-o-q) across all but municipal, treasury, corporate, and asset-backed debt classes; growth was positive y-o-y in all asset classes.

Long-term public municipal issuance volume, including private placements, totaled $114.4 billion in the third quarter of 2016, a decline of 8.7 percent from the prior quarter ($125.2 billion) but an increase of 24.1 percent y-o-y ($92.2 billion).

Total gross issuance of Treasury bills and coupons, including cash management bills, Floating Rate Notes and Treasury Inflation-Protected Securities, was $2.14 trillion in 3Q’16, up 12.0 percent from $1.91 trillion in 2Q’16 and a 23.0 percent increase from 3Q’15’s issuance of $1.81 trillion. U.S. Treasury net issuance, including CMBs, increased to $222.4 billion in the third quarter, compared to net redemptions of $24.6 billion in the previous quarter and net issuance of $132.9 billion in 3Q’15.

Federal agency long-term debt issuance was $229.3 billion in the third quarter, a 17.8 percent increase from $194.8 billion in 2Q’16 and 79.5 percent above $127.8 billion issued in 3Q’15.

Issuance of mortgage-related securities, including agency and non-agency passthroughs and collateralized mortgage obligations, totaled $524.0 billion in the third quarter, a 21.9 percent increase from 2Q’16 ($429.8 billion) and a 15.0 percent increase y-o-y ($455.6 billion).

Corporate bond issuance totaled $420.3 billion in 3Q’16, down 3.7 percent from the $436.5 billion issued in 2Q’16 but 34.5 percent above 3Q’15’s issuance of $312.5 billion. The investment grade sector recorded a quarterly increase in issuance while high yield issuance recorded a quarterly decrease.

Equity underwriting increased by 2.5 percent to $51.1 billion in the third quarter from $49.8 billion in 2Q’16 and was 12.3 percent above the $45.5 billion issued in 3Q’15. “True” initial public offerings, which exclude closed-end mutual funds, decreased to $6.0 billion on 35 deals in 3Q’16 from $6.1 billion on 35 deals in 2Q’16.

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.

Credits

SIFMA Research

  • Managing Director, Director of Research: Kyle Brandon
  • AVP, Research: Sharon Sung
  • Senior Associate, Research: Justyna Podziemska
  • Intern, Research: Yina Qiao

SIFMA Business Policies and Practices

  • VP: Joseph Cox
  • VP: Craig Griffith