Secondary Offerings Rallying Worldwide

Predictions of an IPO boom in 2010, by a host of bankers, investors, and corporate executives has thus-far failed to materialise. However, as we identified in '2010: IPO Boom Or Bust?' ( CFW February 15 2010), for companies looking to restructure their balance sheets by disposing of blocks of shares, the environment for follow-on offerings has become increasingly fertile. This has proven to be the case: the volume of secondary offerings has skyrocketed in 2010, and is up 81% globally year-on-year. Firms worldwide have raised a total of US$48.7bn, with Japan and the US leading the way with US$12.1bn and US$10.7bn of follow-on offerings, respectively - according to data from Thomson Reuters. Even in Europe, which has proven to the global laggard for secondary offerings, deal volume is four times higher than in 2009, thanks to US$4.3bn in rights offerings. In terms of sectors, finance and energy have been the breeding ground for the majority of follow-on transactions (accounting for a combined 67% of global activity this year). Japanese lender Sumitomo Mitsui has raised the most this year at US$11bn.

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