JUST OVER A month ago when Euromoney was interviewing US debt capital markets heads about prospects for the primary markets in May, pretty well everyone was gloomily predicting a quiet month. After a strong start to the year, US issuance in March and April had been disappointing. A lot of banks were predicting that the US primary business would be be down year on year, reasoning that with no immediate prospect of economic growth, a spurt of new funding was unlikely. Predictions for 2003 as a whole were that issuance would be as much as 20% down on 2002. "Five per cent to 10% down on the year could be optimistic at this point," was one managing director's bleak assessment.
Be wary of following these bankers' forecasts.
A month on and the situation couldn't be more different. In May there was a rush of new deals in the US markets as issuers took advantage of treasury bond yields at 45-year lows and historically narrow fixed-rate credit spreads. Total corporate issuance for the month was standing at $62.8 billion at press time and even in Europe, where supply has held up better all year, May also produced a bumper crop of new issues.