According to a note from Morgan Stanley analysts on Thursday, merger and acquisition volumes in North America moderated in May to $157 billion.
This was down from the $186 billion in April, says the bank. At the same time the pipeline of announced deals with potential investment grade (IG) funding implications decreased modestly to $424 billion, down from $429 billion in April.
"There was $12.6bn of M&A-related IG issuance in May, from $8.1bn in April, $9.4bn in March and a high $54.9bn in February," says BofA.
The bank acknowledges that the deal pipeline is a bit elevated. The pipeline of pending M&A deals with IG funding implications currently sits at $424 billion, close to a six-year high.
"Levels so far in 2024 have averaged $416bn, notably higher than the 2023 average of $327bn and the 2022 average of $346bn," adds BofA.
"Implications for M&A-related supply are to the upside. The historical relationship between the M&A deal pipeline and supply implied M&A-related supply over the next eight months of $125, up from 15% from $108bn in M&A-related supply over the prior eight months."