Firms raised a record $ 12.1 billion in 2021 by selling stocks, issuing debt and making new loans, amid a torrent of central bank stimulus and rapid recovery after the pandemic have propelled many global markets upward.

With a few days left in the year, fundraising is already up almost 17% from 2020, which was itself a historic year, and almost a quarter above the catch in 2019. before the coronavirus crisis, according to Financial Times calculations based on Refinitiv data.

The fierce pace of fundraising underscores how easy the financial conditions are in many parts of the world, including the United States, where over $ 5 billion has been raised.

“It has been a truly successful year,” said Chris Blum, a BNP Paribas banker who helps finance leveraged buyouts. “We expect this to continue next year. Every year you kinda think the markets are going to go down from this breakneck pace, but it will remain robust. “

Gargantuan sums have been raised as companies such as electric vehicle maker Rivian and South Korean e-commerce firm Coupang went public.

Dozens of 10- and 11-figure loans have been signed, including to finance Discovery’s merger with AT & T’s WarnerMedia unit and the Canadian Pacific freight rail operator’s takeover of rival Kansas City Southern. And investors in the roughly $ 10 billion U.S. corporate bond market have racked up deal after deal.

Massive bond buying programs launched by central banks, including the Federal Reserve and the European Central Bank at the height of the pandemic, have helped push borrowing costs to historically low levels. Coupled with the huge amounts of liquidity flowing through the financial system, the environment was extremely favorable for businesses to attract new investors and lenders, the bankers said.

As sales of high-quality corporate bonds slowed in Europe and the United States – many blue chip groups had topped up their corporate coffers by 2020 – a surge in low-quality rated corporate issuance lowered total sales of corporate bonds by less than 3% to $ 5.5. tn.

This was in part bolstered by massive private equity activity, as buyout stores such as KKR, Blackstone and Apollo borrowed from the credit markets to fund buyouts that totaled some $ 1.1 billion this year. .

The year of the debt and loan markets

10 billion dollars

The U.S. corporate bond market in 2021 reached this size for the first time


Number of corporate bond sales valued over $ 10 billion this year

$ 41.5 billion

Credit banks wrote to fund WarnerMedia’s merger with Discovery

Sales of junk bonds rose 17% from a year earlier to just under $ 650 billion, while new issues of leveraged loans – loans to heavily indebted borrowers – more than doubled to $ 614 billion, according to Refinitiv and S&P Global’s Leveraged Commentary & Data service.

“Whether you think valuations are high or not, the reality is that there is a lot of liquidity in the system and the animal spirits in the M&A market are alive and well,” said Kevin Foley, executive. of JPMorgan Chase responsible for underwriting more corporate bonds than any other in the world, according to Bloomberg rankings.

Global equity issuance broke the 2020 record, driven by increasing volumes of initial public offerings in all major markets. Total equity issuance reached $ 1.44 billion, up 24% year-on-year.

Line chart of commissions received by global investment banks by asset class (in billions of dollars) showing that Wall Street has benefited greatly from the capital raising windfall

In the United States, in particular, IPO volumes nearly doubled from what had once been a 2020 bumper, with the debuts of companies such as chipmaker GlobalFoundries, the application of meets Bumble and Nubank, the Brazilian financial technology group that includes Warren Buffett and Tencent. as investors.

“We not only broke the record, we broke the record,” said Jim Cooney, Americas Head of Equity Markets at Bank of America. “It wasn’t even close.”

Despite the high volumes and solid growth of the broader stock market, many newly listed companies have performed unusually poorly after listing. The Renaissance IPO Index, which tracks the performance of recent U.S. quotes, has fallen 8% this year, its worst performance against the S&P 500 since its launch in 2009.

The year of the stock market

$ 1.4 billion

The record amount raised from the sale of shares

$ 13.7 billion

How much Rivian raised in biggest IPO of 2021

162 billion dollars

The total money raised by Spacs around the world

For the first time ever, more money was raised by special acquisition companies in the United States than through traditional IPOs. The issue has slowed from a record first quarter, but a steady stream of blank check companies – who raise funds from investors and then seek a business to acquire – have entered the market in the last few months of the year. year, collectively raising more than $ 152 billion. year.

Brad Miller, co-head of US equity capital markets at UBS, said the Spac market “has been nothing short of extraordinary.” The result, he added, was that there were now “a considerable number of companies looking for M&A opportunities.”

More than 550 Spacs are currently looking for a target, according to Dealogic, and nearly 200 have a deadline to find one before the end of 2022. Their success or failure will determine whether the Spac phenomenon persists or whether they end. fade to become the niche product. they were before 2020.