In this article, Kay McCarthy, Head of Jersey Office at TISE, explores the latest listing trends and the strategy to diversify and scale up listings on TISE’s Qualified Investor Bond Market (QIBM).
Built on a culture of responsiveness and innovation, The International Stock Exchange (TISE) is one of Europe’s leading stock exchanges for listing bond issuances aimed at professional investors. With staff operating across five international finance centres, including Jersey, our regulated market is uniquely positioned within the European time zone but outside both the UK and the EU.
As a major professional bond market, we are among the leading venues in Europe for listing high yield bonds and private equity debt securities, and we are experiencing solid growth in structured finance and securitisation transactions. We also have a pool of ‘domestic’ equities and a significant share of the market for listed UK Real Estate Investment Trusts (REITs).
Our market is now supported by a new auction trading system, NOVA. This auction platform provides an automated price discovery and transaction model which delivers even greater value to our current equity issuers. NOVA also provides us with a flexible platform which can be adapted to support new products and services, including a prospective private market offering.
Listings in 2022
The first half of 2022 comprised two very different quarters in terms of new listing volumes on TISE. Following a record 2021 and a record first quarter this year, new listings have since been subdued primarily due to a significant shift in macro-economic conditions.
There has been the much-anticipated pullback from the historic bull market run as geopolitical instability, global supply chain issues, persistent inflation and rising interest rates have combined to provide unfavourable conditions within the debt capital markets.
“There was a 11.2% rise year on year in the total number of securities on TISE’s Official List, which reached 3,815 at 30 June 2022.”
Like our competitor debt markets, TISE has not been immune to market conditions, but with the refinement of our core bond market proposition and the ongoing activity from our Listing Members we have seen further growth in the size and value of our market. There was a 11.2% rise year on year in the total number of securities on TISE’s Official List, which reached 3,815 at 30 June 2022, representing a total market value of more than £600 billion.
Despite a slowdown in new business activity, TISE remains the leading European venue for listing high yield bonds and whilst the high yield market is being particularly impacted by the wider economic backdrop, there is a relatively healthy pipeline in institutional loans and high-yield bonds earmarked for M&A and LBO transactions which should precipitate listings in the future.
Bond market trends
In August 2021, we enhanced our international bond listing offering through the introduction of our Qualified Investor Bond Market (QIBM). This market provides a dedicated all-inclusive rulebook which reflects a proportionate regulatory and disclosure regime for all bond products and structures.
The QIBM has helped to develop, diversify and strengthen our proposition as one of Europe’s leading stock exchanges for international bond listings. There were more than 1,000 newly listed bonds on QIBM in its first year.
In terms of trends, there was a 7.6% increase year on year in private equity related listings on QIBM during the first half of 2022. The private equity sector remains very strong with a significant amount of capital to be deployed and TISE remains the leading venue for the listing of securities related to this transactional activity.
“Securitisation listings increased by 10% year on year and included prominent deals from major international banks backed by a range of asset classes.”
There have also been more investment grade corporate bonds, sovereign bonds (including another bond from the States of Jersey) and securitisations listed on QIBM during the same period. Securitisation listings increased by 10% year on year and included prominent deals from major international banks backed by a range of asset classes including auto loans, credit card receivables, loans to SMEs, as well as residential and commercial mortgage-backed securities.
TISE bond listings are also including a growing number of sustainable bonds. In July 2021, we became a Partner Exchange of the United Nations’ Sustainable Stock Exchanges Initiative (UN SSE) and we launched our comprehensive sustainable market segment, TISE Sustainable.
TISE Sustainable is open to issuers and securities from across both our bond and equity markets who are independently assessed as complying with an internationally recognised framework or rating which demonstrates their environmental, social or sustainable credentials.
Since its launch, we have admitted sustainable issuers, green bonds, sustainable bonds, sustainability-linked bonds and humanitarian catastrophe bonds to TISE Sustainable. At the end of June 2022, there were more than £13 billion of listings on TISE supporting environmental, social and sustainable initiatives, which demonstrates the role we can play as a facilitator of global sustainable capital flows.
Diversification & scale
Whilst the UK has remained the largest single domicile of issuers with listed securities on TISE, more than 25% of all issuers listing securities this year were domiciled in the European Union, predominantly Luxembourg, Ireland, and The Netherlands, as well as France, Germany, Italy, and Sweden.
“Whilst the UK remains the largest single domicile of issuers… more than 25% of all issuers listing securities this year were domiciled in the European Union.”
There has also been continued growth of Member firms who facilitate business on the Exchange, with new Member firms joining from both Jersey and Ireland.
Together, these factors demonstrate the delivery of our strategy to diversify and scale up our bond listings in the UK, Europe and internationally. Indeed, with the support of our Members, and our dedicated team, we are in an excellent position to make the most of the opportunities which will emerge, not least when more buoyant market conditions return.
This article was originally published in Jersey: First for Finance, 14th Edition, Autumn 2022