ANALYSIS: At-the-Market Offerings Rise in the Pandemic

At-the-market (ATM) offerings surged in the second quarter of 2020, driven by a need for cheap capital and encouraged by continued investor buying during the pandemic downturn. The value of ATM deals far outpaced any other quarter since Q2 2009.

Already through Aug. 10, ATM offerings have raised nearly $33 billion on 251 deals valued at least $1 million, exceeding 2019’s entire haul by $5.5 billion on 15 fewer deals.

ATM offerings permit companies to raise capital inexpensively and manage volatility risk: An issuer determines the timing and number of shares sold to the public. By way of comparison with the above graphic, IPOs have completed 186 offerings through Aug. 10, which raised a total of $65.9 billion. IPOs have raised double the capital versus ATM offerings on 65 fewer deals over the same period.

The second quarter recorded 108 at-the-market deals, raising $14.2 billion. The next closest quarter by either count or value over the last 10 years was Q1 2020, which saw 80 deals raise $9.1 billion. The current quarter is on pace to surpass Q2.

This year has already seen seven ATM offerings of $1 billion or larger, compared with five in all of last year. The largest three are Prologis Inc. ($1.5 billion), Sprott Physical Silver Trust ($1.5 billion), and Healthpeak Properties Inc. ($1.25 billion).

All industry sectors have utilized ATM offerings this year. Through Aug. 10, these are the rankings by capital raised: financial ($14.8 billion raised, 46 offerings), consumer, non-cyclical ($7.9 billion raised, 139 offerings), utilities ($3.4 billion raised, 8 offerings), consumer, cyclical ($2.0 billion raised, 16 offerings), energy ($2.0 billion raised, 12 offerings), basic materials ($1.3 billion raised, 16 offerings), industrial ($518.7 million raised, 16 offerings), technology ($302 million raised, 6 offerings).

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