With volume topping $24.8bn, May was the busiest month for equity issuance since November 2021. Kenvue’s (KVUE) blockbuster IPO and a burst of 78 FOs/blocks were the top stories of ECM. Healthcare and consumer defensive were the most active sectors, accounting for more than half of total issuance volume. In the broader market, stable earnings and continued hype surrounding generative AI contributed to the Nasdaq’s 5.8% gain.

 

JNJ’s consumer products business KVUE listed shares in the largest US IPO since November 2021, pricing at $22 (range $20-$23) and raising $4.4bn. Shares rose 22% day-one (5/4) and held steady to close the month up 14% from the deal price. Post-shoe, JNJ retains approximately 90% ownership of KVUE and is planning to make a tax-free distribution of shares to reduce its ownership by year end. Other notable IPOs included Atmus Filtration Technologies (ATMU), which went public in a carve-out style IPO from CMI, pricing its $275m deal at $19.50 (range $18-$21). In Biotech, Acelyrin (SLRN) priced an upsized $621m IPO at $18 (range $16-$18).

 

Looking ahead, Mediterranean fast-casual restaurant chain Cava Group publicly filed an S-1 for the first time while Savers Value Village, Turo and Intermedia Cloud Communications all filed amendments to keep information up to date.

 

Follow-On volume surged to $19.2bn in May (LTM avg. $7.6bn, May 2022 $5.1bn). Deals greater than $50m priced at an average discount of 6.9%, rising an average 3.6% day-one. Sizeable deals included a $2bn overnight FO of AGL, a $1.5bn overnight FO of RE, $1.4bn marketed FO of RNR, and a $1.2bn registered block of LCID (concurrent with a $1.8bn private placement by the Saudi PIF).

 

In the private capital markets, Shein raised $2bn in funding, valuing the Chinese fast-fashion retailer at $66b. This post-money valuation reflects a significant decrease from its previous Series F funding round in October, where the company was valued at $100bn. It is reported Shein is considering a US IPO, and the valuation reset positions the company to enter the market at a more appealing valuation amidst rising competition and geopolitical tensions.

 

With the debt ceiling issue coming to an end, inflation, a potential recession and international conflict continue to dominate discussions on the Macro front. Heading into June, we await the May inflation figures (6/13) as well as the FOMC rate decision (6/14).