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In This List

Corporate Borrowers Ramp up Access to Liquidity with Surge in New CUSIP Requests

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Corporate Borrowers Ramp up Access to Liquidity with Surge in New CUSIP Requests

Highlights

Based on identifier request data from CUSIP Global Services (CGS), corporate borrowers took to the securities market to boost liquidity. CGS’ issuance infographic below shows that this move increased CUSIP issuance in March and for Q1 2020 in total.

CUSIP identifier requests for the broad category of North American-issued equity and debt increased 5.9% from February to March, and 22.8% from Q1 2019 to Q1 2020.

Despite the surge of corporate debt offerings at the onset of the crisis, it remains to be seen if the volume can be sustained under the current volatile market conditions.

Overall CUSIP request volume in March showed a significant surge in activity among corporate issuers accessing the debt markets, while municipal issuance slowed as the COVID-19 pandemic gripped the financial markets. March’s broad volume increase pushed the tally for Q1 2020 requests higher than the figure for Q1 2019. As noted in the infographic available in this blog post, the total volume of CUSIP requests for Q1 2020 surged 18.5% higher from Q1 2019.

CUSIP identifier requests for the broad category of U.S.- and Canada-issued equity and debt totaled 5,667 in March, up 5.9% from February and 22.8% versus the same period in 2019. The increase in volume was driven largely by an 18.8% monthly increase in requests for new U.S. corporate debt identifiers, the bulk of which came from investment grade issuers of large public and private debt offerings. CUSIP Global Services also saw a 59.1% monthly increase in requests for bank certificates of deposit with maturities greater than one year. Volume of longer-term CDs was particularly high during the first week of the COVID-19 crisis, as investors moved out of equities to seek safer havens.

Municipal CUSIP request volume decreased in March. The aggregate total of all municipal securities – including municipal bonds, long-term and short-term notes, and commercial paper – declined 21.6% versus February totals. Municipal ID request volumes increased 11.3% in Q1 2020 compared to Q1 2019. There were also nearly 70 requests for bank bond CUSIPs for failed or anticipated failed remarketings of variable rate demand notes in March as the weekly reset rate soared. Many recent requests have included language in offering documents regarding the COVID-19 pandemic and its impact on economic and financial performance as an additional risk factor. One bright spot has been that some postponed municipal deals have been restructured in anticipation of possible issuance in the future.

“Corporate and municipal issuers have been closely monitoring their liquidity needs as the COVID-19 pandemic has gripped the financial markets,” said Gerard Faulkner, Director of Operations for CUSIP Global Services. “There was a surge of corporate debt offerings at the onset of the crisis, but it remains to be seen if such lofty issuance volume can be sustained under the current volatile market conditions.”

Requests for international equity and debt CUSIPs were mixed in March. International equity CUSIP requests jumped 3.2% higher from February to March, while international debt CUSIPs decreased 20.4% on a monthly basis. Quarter over quarter, the broader tally of international securities requests climbed 14.5%. International equity requests slid -10.58% from Q1 2019 to Q1 2020, but international debt requests increased 23.72% in that period.

To see all CUSIP request volumes by asset class from Q1 2020 vs. Q1 2019, download the complimentary CUSIP Global Services infographic. For March totals by asset class, access the full report. Sign up here to receive the monthly Issuance Trends report as soon they’re released.

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Download CUSIP Global Services’ Q1 2020 Issuance Infographic

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COVID-19’s Impact on the Capital Markets: Identifier Issuance for Municipal Securities Sinks, but Corporate Requests Stable

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CUSIP 101: Who We Are & What We Do

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