CUSIP Global Services saw a sharp increase in requests for new security identifiers in October, suggesting that there could be a surge in new corporate and municipal bond issuances over the next few weeks.
The report tracks requests for, and issuances of, new security identifiers, and acts as an early indicator for debt and capital markets activity.
October saw a total of 1,111 requests, 20 percent more than in September, and 22.2 percent more than October 2014. The jump follows five months of steady decline.
Municipal bond issuers in Texas, New York and California requested the highest volume of new CUSIP identifiers in October, collectively accounting for 30 percent of all municipal bond activity.
Requests for new US and Canadian corporate equity and debt also increased by 3 percent on September, with a total of 1,755 new identifiers requested.
Overall, in October corporate CUSIP requests reached the highest monthly volume seen in 2015 so far, which was largely attributed to growth in federal agency program offerings. Year-on-year, however, corporate CUSIP request volumes still fell by 8.3 percent.
Both international debt and CUSIP international numbers declined in October, by 4 percent and 22 percent, respectively.
Gerard Faulkner, director of operations for CUSIP Global Services, said: “Several factors have driven the turn-around in new CUSIP request volume this month, including the start of the Q4 and a new fiscal year for municipal issuers.”
He added: “Guidance from the Federal Reserve has also played a role, giving issuers a clearer window of opportunity to issue new debt while interest rates remain low.”
Richard Peterson, senior director of global markets intelligence at S&P Capital IQ, which manages CUSIP Global Services on behalf of the American Bankers’ Association, said: “What we’re seeing in the current CUSIP issuance numbers is a ‘dash for debt’ among US corporate and municipal issuers who are looking to raise fund ahead of an interest rate increase from the Federal Reserve.”
He added: “CUSIP request volumes will be instructive as we draw closer to a rate rise, offering us an early look at how capital markets might respond in a rising rate environment.”
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