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CAPITAL MARKETS

Deals of the year 2010: General Motors IPO

The numbers show that global equity capital markets volume was down a modest 1% last year compared with 2009, with a strong showing in emerging markets balancing declines of 16% in US ECM and 35% in Europe, as developed-world corporates caught their breath after the balance sheet repair in 2009. But simple numbers don’t convey the wild extremes of 2010, an extraordinary year in the equity capital markets, dominated by an IPO market that was closed one moment and absorbing very big deals the next.

General Motors IPO
Size: $23.1 billion ($18.1 billion common stock, $5 billion mandatory convertible preferred offering)
Date: November 13
Lead bookrunners: Morgan Stanley and JPMorgan

The year had been billed from the outset as one in which private equity sponsors and governments would realize assets by returning them to public stock market ownership. Yet many new issues in the US and Europe underperformed in the aftermarket, trading below issue price. And almost every week brought news of more cancellations of initial offerings scheduled in the US and international markets, with the markets all but closed for long stretches in the first two months of the year and in the early summer. Then, when the IPO market did open, it did so in spades. Three of the 10 biggest IPOs in history took place last year. Agricultural Bank of China’s $22.1 billion IPO was the biggest ever and AIA’s $20.5 billion sale the second largest. The final quarter of 2010 was the second busiest ever for IPOs, with most of the $126 billion of new flotations crammed into two highest volume months on record for global IPOs in October and November, according to Dealogic.