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Municipal CUSIP Requests On Pace For Record Year, Thanks To October Issuance Surge

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Municipal CUSIP Requests On Pace For Record Year, Thanks To October Issuance Surge

Highlights

While the issuance of new security identifiers (CUSIPs, CINS, etc.) can tell the market which companies are dishing out high volumes of new stock, it can also serve as an early indicator of near-term debt and capital markets activity.

Monthly CUSIP request volume was mixed in October, according to CUSIP Global Services’ October Issuance Trends report.

The report also shows that the favorable interest rate environment for debt issuers has put municipal bond CUSIP request volume on pace for a record year.

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The issuance of new CUSIP security identifiers can serve as an early indicator of near-term equity and debt issuance volume in the capital markets. As the operating body of the CUSIP numbering system, which is owned by the American Bankers Association and managed on their behalf by S&P Global Market Intelligence, CUSIP Global Services (CGS) compiles the volumes of new securities issuance every month to highlight which sectors and asset classes are creating new capital.

Monthly CUSIP request volume was mixed in October, according to CUSIP Global Services’ October Issuance Trends report. Corporate equity and municipal debt volumes increased sharply while corporate debt issuance lagged after a strong September with a sudden dip in market rates.

North American corporate requests – the broad category of equity and debt issued in the U.S. and Canada – declined 1.3% from September to October, driven by a 12.0% decrease in requests for domestic corporate debt identifiers. Other major North American corporate instruments saw increases during the month, led by U.S. corporate equities, which rose 25.1% and Canadian corporates, which climbed 16.6%. On a year-to-date basis through the end of October, the total volume for North American corporates is down 2.2%.

Source: CUSIP Global Services

Municipal volumes increased in October to maintain a strong comeback from last year. The aggregate total of identifier requests for new municipal securities – including municipal bonds, long-term and short-term notes, and commercial paper – surged 34.2% in October. On a year-to-date basis through October, total municipal CUSIP request volume is up 12.9%. Among top state issuers, Texas, California and New York were the most active in October.

Source: CUSIP Global Services

The favorable interest rate environment for debt issuers has put municipal bond CUSIP request volume on pace for a record year. The record full-year volume for municipal CUSIP requests since CUSIP Global Services began tracking issuance activity in 2009 is 16,683, which was set in 2012. While we have seen some month-to-month volatility in the municipal bond category over the course of 2019, the general trend for the first three quarters has been toward steady growth.

Requests for new international debt and equity CUSIP International Numbers (CINS) were mixed in October. International equity CUSIP requests were down 4.8% from September to October 2019 and international debt CUSIP requests were up 1.8% during the month. Year-to-date international CUSIP request volume for all international securities is down 26.9% so far in 2019.

Source: CUSIP Global Services

** Private Placement Note identifiers are assigned for non-public instruments purchased by insurance companies.

Private placement CUSIP orders jumped higher in October, with a total of 296 new orders processed, up from 276 requests last month. On a year-to-date basis, private placement CUSIP requests are up 10.7%.

For the complete details of securities issuance for the month of October and what it could portend for the capital markets, access the complimentary report.

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