Jefferies

Actionable Ideas for Companies and Sponsors

The Return of a Robust European Follow-on Market

On the back of strong fund inflows, $25 billion of equity issuance occurred in Europe in July and August, an 80% increase over last year, and in September, $17 billion of overnight follow-on offerings priced, the highest monthly volume in over two years. This volume included six $1+ billion transactions successfully completed in France, Germany and the Netherlands, pricing at an average discount of 2.2%, tighter than the 3.7% average for $1+ billion transactions in the first eight months of 2017. Numerous sectors contributed to this strong issuance volume, including financials, real estate, technology, power, telecom and retail. We expect this European trend of overnight follow-on offerings to continue, as investors look for alpha in follow-on transactions amidst a favorable backdrop for European equities.