According to statistics from Dealogic and the Citi Capital Markets Review and 2019 Outlook, there was a modest decline in 2018 follow-on offering volume compared to 2017. The decline is likely attributable to increased volatility during the year. The Review notes several important trends in follow-on activity, citing increased reliance on marketed (versus unannounced or accelerated marketed) offerings, a larger percentage of first follow-ons following early IPO lock-up releases, an increase in acquisition financing, and increased forward sales of equity. The Review notes that in 2018, 37% of first follow-ons had an early lock-up release, up from 23% in 2017 and 8% in 2006. Another notable trend was the decline in follow-on offerings including secondary stock, perhaps as a result of financial sponsors choosing to wait for less volatile markets. Forward sales, principally in the REIT and energy sectors, increased from four in 2017 to 22 in 2018.
Originally published January 7, 2019
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