Equity deals rise in Q1, debt activity slumps

Amid surging market volatility and tighter financial conditions, global equity issuance rose in the first quarter, while debt offerings declined, according to new data from Refinitiv.

Total equity issuance came in at US$132.2 billion to start the year, up 8% from the same period last year, and 10% higher than in the fourth quarter, the firm reported.

The volume of deals was just over 1,100, essentially flat from the first quarter a year ago.

Strong secondary offering activity powered the equity markets, with US$85.5 billion worth of deals in the first quarter, up 37% from the same period in 2022, Refinitiv reported.

However, global initial public offerings (IPOs), excluding special purpose acquisition companies (SPACs), dropped 41% year over year to just US$24.0 billion in the first quarter.

Global convertible offerings were also solid, with US$22.7 billion of new issuance, up 15% year over year.

At the same time, global debt activity was down by 11% in the first quarter to US$2.4 trillion — marking the slowest opening quarter since 2019. The number of deals was also down 13% from last year, Refinitiv said.

Still, the first quarter total represented a bounce back for debt markets compared with the very weak fourth quarter of 2022. Issuance was up 48% from that period.

Investment grade corporate debt contributed about half of the deal value in the first quarter (US$1.2 trillion), down 13% from last year, and high yield issuance was down about 16% year over year to US$51.2 billion.

However, high yield offering activity was almost triple fourth quarter levels, Refinitiv noted, and investment grade issuance was up 39% from the fourth quarter.

Green bond issuance also hit record levels in the first quarter, Refinitiv said, citing data it compiled with The Climate Bonds Initiative. Total green bond issuance reached US$133.7 billion in the quarter, up 25% from last year, and up 78% from Q4, marking the largest quarter on record.

Goldman Sachs edged out Morgan Stanley for top spot in the equity underwriting league tables, followed by CITIC, BofA Securities and JP Morgan.

RBC Capital Markets was the only Canadian firm to rank in the top 25 globally, climbing one spot from last year to 21st place overall.

On the debt side, JP Morgan was the top underwriter in the first quarter, followed by Citi, BofA, Barclays and Goldman Sachs.

RBC ranked 11th, up from 16th place last year, and TD Securities took 18th place, up one spot.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.