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Global capital markets answer 2020’s distress call

The uncertainty and disruption of the COVID-19 pandemic during 2020 sent organizations rushing to access liquidity. As Refinitiv data shows, this resulted in an unprecedented transfer of capital between savers and borrowers. For others, the change in behavior created opportunities. Both trends drove global capital markets to all-time highs, as Matthew Toole explains.


  1. During 2020, global debt capital markets topped $10 trillion for the first time. This included $4.8 trillion from global investment grade corporate debt, $500 billion from global high-yield debt, and $222.2 billion from green bonds.
  2. An initial public offerings (IPOs) resurgence helped equity capital markets top $1 trillion — a 56 percent increase on 2019 — from 6,100 issuances. Both of which were the highest since records began.
  3. M&A’s year of two halves had bankers playing catch-up. While H1 was quieter for M&A, both Q3 and Q4 surpassed $1 trillion in deals. However, global M&A was 5 percent lower than 2019.

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2020 marked the busiest annual period for global capital markets since records began, as corporates, sovereigns and financial institutions tapped liquidity in order to sustain them through the economic lockdowns of 2020.

Records broken in global capital markets

Debt issuance reached $10.2 trillion from more than 25,000 offerings, the highest levels by both volume and value since records began in 1980. The first three quarters of the year were each record-breakers, with overall debt capital markets surpassing 2019 levels by about a third.

Global investment grade corporate debt saw $4.8 trillion raised, a 22 percent increase year-on-year, and an all-time record. Issuance from top-quality borrowers was consistent, with 2020 witnessing five of the ten all-time busiest months for investment-grade issuance. This was driven, in particular, by the U.S. dollar market, which saw a 62 percent increase in debt issuance, to $1.9 trillion.

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Meanwhile, global high-yield issuance topped $500 billion. Following a 52 percent spike in issuance, U.S. borrowers accounted for around two-thirds of the high-yield market in 2020.

In addition, $222.2 billion was raised by green bonds, a 26 percent increase on 2019 and an all-time high, according to figures from Refinitiv and The Climate Bond Initiative.

Trillion-dollar global equity capital market

Global equity capital markets also reached new highs.

The amount of equity issued increased 56 percent to $1.1 trillion, while the number of issuances were a third larger than 2019, to reach 6,100 — both being the highest since records began, more than 40 years ago. The year ended on an upward trend, with Q4 seeing more than $300 billion raised.

More than 4,000 follow-on issuances came to market to hit $663 billion, the biggest secondary market tally since 2009, and a 72 percent increase on 2019. Meanwhile, convertible offerings jumped 50 percent year-on-year to $188 billion, the largest amount since records began in 1980.

But this equity market renaissance was much more than a hunt for extra capital reserves.

Initial public offerings (IPOs) increased 25 percent to $222 billion during 2020, as investor sentiment about future growth opportunities contrasted starkly with the ongoing crisis. (This figure excludes ‘special-purpose acquisition’ vehicles, which constituted a mini-equity boom all of their own.) Indeed, IPO activity also ended on a high, with $83 billion raised in Q4 2020, the largest amount in any three-month period since Q4 2010.

It’s interesting to note that this reflects quite accurately Refinitiv’s Deal Makers Sentiment Study, published in January 2020, where twice as many respondents were bullish on IPOs as were bearish, driven by growth in technology.

Equity issuance was up by about a third in the U.S. and EMEA, but this pales in comparison to Asia-Pacific, which increased 67 percent to become the world’s largest equity capital market (ECM).

Issuers in the region borrowed a record $370 billion during 2020, driven by China, which saw a 90 percent increase in ECM proceeds to $281 billion. Japan also enjoyed an 82 percent increase in equity proceeds, to hit $39 billion.

M&A’s year of two halves

M&A advisers would have been well advised to take their annual leave before June. After a six-month hiatus, both Q3 and Q4 surpassed $1 trillion in deals, a 90 percent increase on the first half of the year. But even this was not enough, as global M&A finished the year 5 percent lower than 2019.

Without doubt, the year was saved by a strong technology sector — a clear winner from the COVID-19 pandemic, with tech deals totaling $684 billion, up 50 percent on 2019 and an all-time high.

Meanwhile, the private equity industry sped up deployment of its illiquid war chests, taking a 16 percent slice of global M&A — a quarter higher than last year, and an all-time record.

Regionally, U.S.-target M&A ended the year down 21 percent at $1.4 trillion, Asia-Pacific was up 16 percent and EMEA was the big M&A winner, up 36 percent on the year, albeit bolstered by technical deals such as the $106 billion share unification of Unilever PLC.

But what headline figures may hide (and the chart below reveals) is that smaller deals were more resilient. For instance, mega deals fell 21 percent, but those between $5 billion and $10 billion increased 36 percent.

Europe overtaken in fee-rush

Global investment banking fees reached $128 billion during 2020, an 18 percent increase on 2019 and the best year since records began in 2000. The second quarter of 2020 was the most lucrative for investment banking fees in history, at $35.7 billion.

But there was a significant trans-Atlantic divide: U.S. companies paid out 24 percent more than 2019, while EMEA saw a 5 percent uptick, held up by gains in Germany and Central Europe.

Asia-Pacific ended the year 20 percent up, driven by North Asia, and surpassed deal making fees from Europe for the first time on record.

In 2020, the top five banks increased their market share by 2.3 points, led by JP Morgan (7.2 percent) and Goldman Sachs (6.5 percent).

In private-equity land, KKR & Co paid out $530 million in fees, while Goldman Sachs was the top banker to private equity sponsors, bringing in $917 million.

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