Secondary Public Offerings Are Generating Significant Interest

$49 Billion Has Been Raised So Far This Year by Public Companies

February 23, 2010 – While the level of general corporate finance activity so far this year has been off to a slow start, a large number of secondary public offerings have resulted in a busy 2010 for many investment bankers and corporate finance advisers.  This high level of financing activity by existing public companies confirms the benefits that a stock market listing can provide a company that is seeking equity capital, especially in a difficult economic environment.

As of last week, secondary offerings, in which publicly-traded companies raise additional capital by selling shares publicly, were up 82 percent for the 2010, over the same period of 2009.  According to data released by Thomas Reuters, public companies have raised almost $49 billion so far in 2010, with secondary offerings in Japan and the United States accounting for 47 percent of the total amount.

While European corporate finance activity has been in the doldrums, due to both questions about the European economic recovery, as well as most recently, the Greek sovereign debt problem, the amount of European rights offerings made to existing shareholders totaled $4.3 billion.  With the rights offerings being included, the amount of European secondary offerings so far this year was four times higher than the same period in 2009.