Investment grade, high yield totals climb in first half

Thomson Reuters data indicates a strong first half for US credit markets.

Asset backed securities in the US had their biggest opening half of the year since 2007, totaling $138.6 billion across 238 transactions, according to Thomson Reuters data released this week.

The total volume beat 2012’s first half by 18.2 percent thanks to a revival of the collateralised debt obligation market. CDOs accounted for 25 percent asset backed securities, according to the report.

Overall, US investment grade debt rose by 7.2 percent over the course of the first half compared to the same period last year, with total volume in the second quarter reaching $251.7 billion.

“Despite a decline from the first quarter, the second quarter’s total volume of $251.7 billion ranked within the top ten quarters on record (10th), as issuers continued to take advantage of historically low interest rates,” according to the report.

High yield debt increased by 25.4 percent over 2012’s first half totals, with proceeds registered at $173.9 billion across 329 transactions. The high yield boom was driven by “increased demand from investors seeking a larger yield compared to the record=breaking low coupons in the investment grade market”.

Despite strong performances from US debt markets, global debt capital market activity declined slightly to $3 trillion in the first half. That performance was the lowest first half for global debt capital markets activity since 2008, according to the report.