EQUITY CAPITAL MARKETS are back on track - at least if the furious activity of the last week of June is anything to go by. In the US alone 23 deals came to market, according to Dealogic. Of these, 11 were convertible bonds. They included the second largest of the year to date, a $4 billion single-tranche offering from General Motors as part of a bumper pension plan refunding that also included a $13.5 billion multi-tranche, multi-region bond issue.
There were also 11 US-registered common stock secondary offerings, and even two US-registered IPOs. That week was the culmination of a marked increase in the number of equity deals since the start of May, once investors and issuers were no longer distracted by the invasion of Iraq. "It almost feels like bubble territory in terms of the number of deals being done," says Doug Baird, head of US equity capital markets at Deutsche Bank in New York.
But don't break out the champagne just yet. It's much less easy to make money on secondary offerings and convertibles than it was even two years ago. The non-IPO equity capital markets business now demands more capital, more risk-taking, more deal-sharing and lower fees than ever before.