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CUSIP request volume signals strong pace of US corporate equity and debt issuance in Q1

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CUSIP Global Services’ (CGS) latest CUSIP Issuance Trends Report for January 2018 reveals an increase in CUSIP request volume for new US corporate equities and debt, but sharp decreases in the municipal bond market.

This is suggestive of a strong pace of new corporate issuance and a slowdown in new muni issuance in the early weeks of 2018.
CUSIP identifier requests for the broad category of US and Canadian corporate offerings, which includes both equity and debt, totalled 4,728 in January, up 12 per cent from December, driven by an 8 per cent increase in requests for new US corporate equity identifiers and a 10 per cent increase in new US corporate debt identifiers. Requests for Canadian corporate debt and equity identifiers declined 19 per cent in January, bringing the year-over-year performance for the combined category to a 2 per cent decline.
By contrast, municipal CUSIP requests were more than halved in January, falling 57 per cent from December volumes, with just 732 new muni identifiers requested during the first month of the year. On a year-over-year basis, muni request volume was down 26 per cent versus January 2017.
“We’re still seeing fallout from the Tax Cuts & Jobs Act in our muni request volumes,” says Gerard Faulkner, Director of Operations for CUSIP Global Services. “While lawmakers are currently reviewing a new bill that would restore the tax exemption for advance refunding bonds, for now, the marketplace is reacting to the tax reform by dramatically curtailing their pre-trade activity.”
International debt and equity CUSIP International Numbers (CINS) were mixed in January. International equity CINS were down 26 per cent during the month, while international debt CINS increased 29 per cent during the month. On a year-over-year basis, international equity requests were up 29 per cent and international debt requests were up 37 per cent, reflecting continued volatility in international markets.

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