March NA CUSIP Volume Climbs 6% During COVID-19 Crisis

CUSIP Global Services (CGS) announced the release of its CUSIP Issuance Trends Report for March 2020. The report, which tracks the issuance of new security identifiers as an early indicator of debt and capital markets activity over the next quarter, found a significant surge in request volume for new corporate debt identifiers.

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 last month and 5.2% 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 in longer-term CDs was particularly high during the first week of the crisis, as investors moved out of equities to seek safer havens. Requests for new U.S. corporate equity identifiers fell 18.7% from February to March.

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. On an annualized basis, municipal ID request volumes are up 7.7% through March. Perhaps more telling, municipal deals submitted by underwriters on the CUSIP electronic platform decreased 49% in March vs. February 2020. There were also nearly 70 requests for bank bond CUSIPs for failed or anticipated failed remarketings of variable rate demand notes as the weekly reset rate soared. Many 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 has been a surge of corporate debt offerings at the onset of the crisis, however, 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 increased 3.2% versus February and decreased 11.2% on a year-over-year basis. International debt CUSIPs decreased 20.4% on a monthly basis and increased 22.2% year over year.

To view the full CUSIP Issuance Trends report for March, please click here.

Following is a breakdown of new CUSIP Identifier requests by asset class year-to-date through March 2020:

Asset Class          2020 YTD     2019 YTD     YOY Change

International Debt 892 730 22.2%

Municipal Bonds 2,618 2,261 15.8%

U.S. & Canada Corporates  7,393 6,495 13.8%

CDs > 1-year Maturity 1,994 2,237 -10.9%

International Equity 262 295 -11.2%

Private Placement Securities  751 918 -18.2%

Short-Term Municipal Notes 203 259 -21.6%

Long-Term Municipal Notes 67 88 -23.9%

CDs < 1-year Maturity 1,715 2,624 -34.7%