Douglas L. Peterson
President and Chief Executive Officer at S&P Global
Thank you, Chip. Welcome to today's earnings call. At the beginning of the quarter, we knew that the earnings in the second quarter of 2020 had been very strong due to a surge in liquidity-driven investment-grade issuance and from management actions we took to reduce spending to deal with the incredible uncertainty from the COVID pandemic. It's remarkable that the financial results we reported today surpassed those of a year ago. These results don't just happen. Our people make them happen, and I want to thank them all. Now let's turn to our second quarter financial highlights. We reported very strong financial results, with revenue increasing 8% and all four businesses delivering revenue and adjusted operating profit growth. Indices delivered the strongest revenue growth based on the large gains in ETF AUM. Adjusted expense growth was higher than normal at 9% largely due to significant cost controls in the prior period due to the pandemic and increased performance-related incentives this quarter.
After raising guidance on our first quarter earnings call, we're raising 2021 guidance again based on these strong results and our expectations for the remainder of the year. Ewout will provide details in a moment. I'd also like to share some additional highlights from the second quarter. The most important initiative of the year continues to be our upcoming merger with IHS Markit. This is an incredibly transformative opportunity for our company and our customers. Momentum for the merger with IHS Markit continues to build. Countless employees from both companies are working together on numerous integration planning work streams. We continue to engage with global regulators in anticipation of closing the merger in the fourth quarter of 2021. While we don't have any new updates on the merger to share with you today, I can assure you that considerable progress is being made. The iconic Dow Jones Industrial Average celebrated 125 years this quarter, and we introduced several new ESG-related products.
We'll provide further details on these accomplishments on today's call. And finally, CRISIL named Amish Mehta as the new Managing Director and CEO effective October 1. Amish joined CRISIL as President and Chief Financial Officer in 2014 and assumed his current responsibilities as Chief Operating Officer in 2017. He has over two decades of diverse experience across telecommunications, oil and gas and business advisory services. Amish will succeed Ashu Suyash, who has decided to move on to set up her own venture. Over the last six years, Ashu has led CRISIL's transformation to become a leading, agile and innovative global analytics company. Under her leadership, CRISIL has not only consolidated its ratings leadership position but also grown its global business. Ashu has been at the forefront of the ESG agenda for CRISIL and the launch of several new offerings and platforms in India and the global markets. I'd like to express our deep appreciation of Ashu's leadership and contributions. To recap the financial results for the second quarter, revenue increased 8% to $2.1 billion. Our adjusted operating profit increased 8%, and our adjusted operating profit margin declined 40 basis points to 58.3%.
As you know, we measure and track adjusted operating profit margin on a trailing 4-quarter basis, which increased 90 basis points to 54.5%. As a result, our adjusted diluted EPS increased 6%. Each quarter, we highlight a few key business drivers and important projects underway. This quarter, let's start with ratings bond issuance trends. During the second quarter, global bond issuance decreased 9%. In the U.S., bond issuance in aggregate decreased 19% as investment-grade decreased 51%, high-yield decreased 8%, public finance decreased 7%, while structured finance increased 229% due to large increases in every category, particularly CLOs, which increased 580%. European bond issuance decreased 11% as investment-grade decreased 32%, high-yield increased 104%, and structured finance increased 74% with gains in every asset class except ABS. Of particular note were CLOs, which increased more than 300%. In Asia, bond issuance increased 8% overall. The data on this slide only depicts bond issuance. When we include bank loan volumes, overall global issuance decreased 2%. One of the first questions investors ask whenever there is a strong quarter of issuance is how much of this was pull-forward? On this slide, we show the profile of bond maturity data from different points in time.
As you can see, the upcoming maturities in the second half of this year and in the next few years have not changed much in the past six months. So despite the flurry of issuance in the last few months, there doesn't appear to have been much pull-forward activity. Since bank loan ratings are an important element of ratings revenue, and they're not included in our bond issuance slide, we like to disclose our bank loan rating revenue each quarter. The bank loan market continues to see strong demand amid the reopening of the economy and the vaccination rollout as potential inflation puts the floating rate asset class in focus. With an incredibly strong CLO market and retail investors continuing to pour money into loan ETFs and mutual funds, the market has easily digested these elevated volumes. In fact, assets at leverage loan funds jumped to an 18-month high at the end of June. All of this has contributed to an unprecedented level of bank loan rating revenue this year, with the first half of 2021 already exceeding all last year. Second quarter revenue was $157 million, more than triple the second quarter of 2020.
The next two slides look at the combined high-yield issuance and leveraged loan volume for the U.S. and Europe. Data is not readily available for the rest of the world. This slide shows that the combination of global leveraged loan and high-yield issuance in the first and second quarters of 2021 has dramatically exceeded any quarterly total in the past three years. This slide depicts the combination of high-yield issuance and leveraged loan volume by the use of proceeds of the funds raised. The category with the largest increase in the second quarter was M&A and LBO activity. The leveraged loan market and the CLO market are dependent on one another as many of the leveraged loans end up in CLOs. The CLO market continued at a torrid pace in the second quarter. Investor demand for floating rate investments, their search for yield and the relatively strong CLO performance during the 2020 pandemic have contributed to increased CLO issuance this year. There are not a lot of companies in the world still selling a product they created 125 years ago.
But on May 26, 1896, the Dow Jones Industrial Average was launched. Still serving as Wall Street's bellwether, at the end of 2020, $37 billion of ETF AUM was indexed or benchmarked against this iconic Dow Jones Index. At the time of the Dow's introduction, investing in the stock market was considered highly speculative activity. And so in its early years, the Dow achieved little prominence outside of Wall Street. Ironically, it was the market crash of 1929 that brought the Dow's reputation to the attention of everyday investors as the index lost nearly 30% of its value over the course of two days. Before that, investors had been more focused on their individual stocks. But after the crash, investors were more interested in following general market conditions that Dow made that possible. Each year, S&P Dow Jones Indices releases the annual survey of assets. This chart depicts the highlights of that survey for 2020. Asset levels in actively managed funds that benchmark against our indices increased 23% to $11.4 trillion. Assets and passive funds invested in products indexed to our indices increased 17% to $7.5 trillion. Numerous indices support the $7.5 trillion, including the S&P 500, the largest with $5.4 trillion in assets.
There are several other notable categories with considerable AUM growth, including sector indices that increased 24%, global indices that increased 62% and fixed income indices, which grew 86%. Just over a year ago, we featured the launch of the S&P Global Marketplace on our earnings call. Today, I'd like to share with you the tremendous reception it has received by our clients. The site currently features 139 tiles of content and solutions, representing all four divisions and Kensho. So far, we have booked 189 deals, and there have been 600,000 page views. We also recently launched Marketplace Workbench in partnership with Databricks, allowing clients access to a modern cloud-based platform for big data testing and analysis. This slide also depicts the most popular categories and the client types with the most active users. Congratulations to all those involved in creating a site that uses unique technology to simplify our clients' ability to identify, access, evaluate and utilize unique data and solutions. If you haven't visited marketplace.spglobal.com yet, I encourage you to do so. Turning to our investments in ESG. We continue to launch new products and grow our ESG franchise across the company.
After recording ESG revenue of $65 million in 2020, we delivered revenue of $43 million in the first half of this year, with second quarter revenue increased over 50% to $22 million versus the prior period. With the launch of social and sustainability framework alignment opinions that we introduced on our call last quarter, Ratings now has four products. Overall, Ratings completed 13 ESG Evaluations, 11 Green Evaluations, 16 SAM benchmark engagements and 10 social and sustainability framework alignment opinions in the quarter. Market Intelligence launched electric quarterly reports tracking U.S. power purchase agreements. These provide our clients with broad new insights in how energy revenues and renewable power purchase agreement pricing are trending. Market Intelligence also entered into an agreement to provide Trucost carbon and environmental data to State Street's clients. These clients will access functionality, including mapping carbon footprint and other environmental data portfolios, TCFD reporting features, applying Trucost Carbon's Earnings at Risk, Paris alignment and physical risk data intelligence. We launched a climate credit analytics product in partnership with Oliver Wyman to help banks comply with climate stress testing regulations.
And we launched an SFDR data solution that allows firms operating in the European Union to meet newly formed sustainable finance disclosure regulation requirements by drawing on a wide range of ESG data sets from across S&P Global. In Indices, we had $25.8 billion of ESG ETF AUM at the end of the second quarter. This is an increase of 290% since the end of the second quarter of last year. Our Indices business also launched ESG Dividend Aristocrats Index series, partnered with Evolve, for the launch of index ETFs that offset the carbon footprint of stocks and worked with a German federal pension plan that reallocated EUR nine billion of assets to equity indices utilizing our EU climate transition benchmark. Platts began publishing daily carbon credit price assessments, reflecting nature-based carbon credit and household device carbon credit projects that are intended to bring additional transparency to carbon prices and carbon trading activity. Platts launched the world's first daily carbon neutral LNG price assessment, which involves offsetting the carbon emissions through the purchase and retirement of carbon credits. Platts also strengthened its global suite of hydrogen prices with new hydrogen price assessments for the U.K. and a new 2-degree warming scenario to the market-leading global integrated energy model.
Let me now turn to our outlook for global issuance and GDP. After issuance growth of 15% in 2019 and 17% in 2020, our Ratings Research Group's prior 2021 forecast called for a decrease of 2%. The latest forecast was issued earlier this week and calls for a decrease of 1% without international public finance. The level of issuance in 2020 remains, in aggregate, hard to beat, but the 2021 total should still come in at a historically high total, likely surpassing 2019. The two largest changes compared to the forecast last quarter include structured finance, which went from a 6% gain to a 20% gain; and nonfinancials, which went from a 7.5% decrease to a 12% decrease. Please note that this is a bond issuance forecast. This is not a revenue forecast. For example, it doesn't address nontransaction revenue and doesn't include leveraged loan activity.
The peak of the pandemic appears to be behind us, particularly for the most advanced economies as vaccinations become widely available, severe COVID-19 cases fall and economies reopen. But we still see inevitable fits and starts with COVID risk still elevated. This is happening earlier and faster than previously assumed, driving both growth and inflation. The macro outlook continues to improve. We have raised our global growth forecast by 40 basis points to 5.9% in 2021. This reflects stronger performance across the board in the first half of the year. Our 2022 to 2024 outlook shows a stronger U.S. but lagging emerging markets. Risks are shifting from the pandemic to the pace of the recovery. In particular, rising inflation in the U.S. and some emerging markets points to a possible bumpy transition from the ultra-low rates and easy financing conditions to the post-COVID-19 steady state. And with economies on demand, policy normalization and sustainability are coming into sharper focus. Finally, Platts is forecasting that oil will remain above $65 a barrel through 2021. This is positive for the health of the oil industry.
I will now turn the call over to Ewout Steenbergen, who is going to provide additional insights into our financial performance and outlook. Ewout?
