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Ryan Nauman
VP, Product and Market Strategist
Stephen Berei
VP, Client Services & Implementation
Jeremy Poulin
Senior Client Consultant

Q4 2015 Fixed Income Quarterly

Jan 8, 2016 Ryan Nauman

2015 has earned its spot at the top of the record books.  With assistance from our colleague Drew Jamner, Credit Analyst of Informa Global Markets (IGM), we take a look back at the record setting year within the investment grade corporate credit capital market space. 

New issues in the investment grade corporate credit space during 2015 surpassed the trillion dollar mark for just the third time ever, while easily surpassing the previous issuance record set in 2014 by nearly 15%.  2015 new issue volume finished at a staggering $1.252.495 billion from 839 deals/1544 tranches (ex-SSA).  In comparison, 2014 which held the previous record, had a volume of $1090.231 billion (ex-SSA).

Total volume during the fourth quarter came in at $260.647 billion (186 deals/318 tranches), which was relatively quiet compared to the first three quarters of the year.  November provided the most deals (87/142 tranches), while October had the most volume ($105.026 billion). The second quarter was the largest quarter by volume, coming in at $359.081 billion, while quarter one followed at $351.569 billion.  Not only were the first two quarters of 2015 the busiest, they were also the top two quarters ever, surpassing the previous quarterly high of $307.405 billion set during quarter one of 2014.

Merger & acquisition (M&A) activity was the biggest game changer throughout the year.  Volume from M&A related deals in 2015 came in at an astounding $275.025 billion, which made up 22% of the total volume.  How does that compare to previous years?  In 2014, M&A activity ($97.300 billion) made up 9% of the total volume during the year.

Actavis highlighted the year with a $21.000 billion ten-part deal, which hit in March and places second for the all-time largest deals.  Not far behind the Actavis deal comes AT&T.  AT&T brought a $17.500 billion six-part deal to the market in April.  Other noteworthy deals during the year include: Abbvie $16.700 billion (May), Charter $15.500 billion (July), and CVS $15.000 billion (July).  Visa paced quarter four with a $16.000 billion six-part deal in December, while Microsoft followed with a $13.000 billion seven-part deal that hit in October.

This record setting year may be attributed to corporations taking advantage of unprecedented low interest rates.  What will 2016 have in store for the investment grade corporate credit capital markets now that the U.S. Federal Reserve has started increasing the federal funds rate?  Will 2016 continue the record setting trend or will we see a decrease in total volume from the previous year, which hasn’t happened since 2008?

To learn more about Drew Jamner, Credit Analyst (Drew.Jamner@informagm.com) and the services provided by Informa Global Markets visit http://www.informagm.com.

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