USA - Nationwide: A Capital Markets: Debt & Equity: Eastern United States Overview

US capital markets activity was robust in the first quarter of 2026, as strong debt issuances coincided with mixed equity markets, in which IPO activity was more selective, while follow-on and convertible activity remained consistent. Investment-grade debt issuances surged, supported by strong demand for high-quality corporate credit amid elevated all-in yields. On the regulatory front, the Securities and Exchange Commission (the “SEC”) continued its deregulatory pivot under Chair Atkins, proposing significant reforms to periodic reporting, shelf registration and filer classification as part of an agenda to streamline capital formation.

Recent Market Activity*

US equity capital markets delivered a mixed first quarter of 2026, with 25 initial public offerings raising approximately USD10.2 billion compared to 33 IPOs raising approximately USD13.4 billion in the fourth quarter of 2025. Although the number of new listings declined, proceeds per offering remained elevated, reflecting continued investor demand for larger offerings.

The IPO pipeline has been shaped by persistent uncertainty around US trade policy and broader macro volatility, as well as the Federal Reserve’s decision to hold rates steady since its last rate cut in December 2025. These conditions contributed to a more selective IPO market, with some transactions postponed and others proceeding during windows of market receptivity. Follow-on offerings totaled 119 offerings, raising approximately USD37.4 billion in the first quarter of 2026, compared to 130 offerings raising approximately USD31.6 billion in the fourth quarter of 2025. Although the transaction count dipped modestly, aggregate proceeds remained elevated, suggesting that established issuers and selling shareholders continued to access markets successfully during open issuance windows. Investor appetite has been concentrated in larger, more established issuers with resilient fundamentals, as investors grew increasingly focused on the quality and valuation of new issuers amid rising macro uncertainty.

Debt markets were particularly active in the first quarter of 2026. High-yield debt issuances totaled approximately USD85.6 billion across 89 transactions compared to approximately USD69.9 billion in the fourth quarter of 2025, reflecting an active market supported by M&A/LBO-related issuance and growth investments. In the broader leveraged finance market, refinancing activity also moderated. The first quarter also benefited from a period of relative credit spread tightening, which supported issuance before volatility increased later in the quarter. Investment-grade debt issuances rose to approximately USD662 billion across 338 transactions compared to approximately USD351.4 billion in the fourth quarter of 2025. This surge followed a favorable January backdrop for US dollar credit, including strong demand from yield-seeking investors, tight spreads and robust supply that was readily absorbed by the market.

Convertible bonds continued their strong run, with 39 issuances totaling approximately USD31.7 billion in the first quarter of 2026, slightly ahead of the 37 issuances totaling approximately USD30.4 billion in the fourth quarter of 2025. Convertible bonds continued to demonstrate their appeal in a higher-rate environment, offering issuers a way to reduce cash interest expense through lower coupons while giving investors a combination of equity upside and bond-like downside protection.

Activity in the first quarter of 2026 showed significant strength in debt markets, with investment-grade issuances surging and high-yield volumes rebounding sharply from the fourth quarter. Equity markets were more nuanced, as IPO transaction counts declined but proceeds remained healthy and follow-on proceeds increased, reflecting selective but robust investor participation. Looking ahead, tariff uncertainty, the war against Iran, geopolitical developments and the Federal Reserve’s rate path will continue to shape issuance windows. Increased market volatility could, however, further bolster the convertible bond market. Convertible bonds provide downside protection through fixed-income features, including the bond floor and coupon payments, while preserving the upside potential of equity conversion. They may also offer issuers a lower-cost financing alternative to straight high-yield or investment-grade debt by monetizing equity volatility through the embedded conversion option.

Regulatory Developments

The SEC has continued to reorient its regulatory posture under Chair Atkins, pursuing a generally deregulatory rulemaking agenda.

Chair Atkins directed the Division of Corporation Finance to conduct a comprehensive review of Regulation S-K, for which public comments were due April 13, 2026. The stated goal is to refocus disclosure requirements on what a reasonable investor would find important. The review follows the SEC’s prior focus on Item 402 executive-compensation disclosure, while related rulemaking proposals would expand scaled disclosure accommodations for certain issuers; the next phase of the Regulation S-K review turns to other disclosure requirements. In December 2025, Chair Atkins separately called for substantial reform of executive-compensation disclosure rules, arguing the current system forces companies to produce detailed disclosures not materially useful to investors.

In May 2026, the SEC proposed amendments to expand shelf registration by removing eligibility requirements tied to seasoning and public float, which would broaden issuer access to Form S-3 shelf registration. The registered offering reform proposal was issued alongside a simplified filer status proposal as part of Chair Atkins’s “Make IPOs Great Again” agenda, with a 60-day public comment period. Also in May 2026, the SEC proposed changes to its filer status taxonomy that would:

• reduce filer categories to two: large accelerated filers and non-accelerated filers;
• raise the large accelerated filer threshold to USD2 billion in public float; and
• extend existing smaller reporting company and emerging growth company accommodations to non-accelerated filers.

Additionally, in May 2026, the SEC proposed allowing Exchange Act reporting companies to elect semiannual reporting on a new Form 10-S in lieu of filing three quarterly reports on Form 10-Q. Companies would make the election annually by checking a “semiannual” box on the Form 10-K cover, while still being permitted to issue quarterly earnings releases, hold earnings calls and provide earnings guidance. The proposal also includes Regulation S-X amendments to simplify the rules on the age of financial statements.

*All statistical and market data referenced in this article is sourced from the London Stock Exchange Group.