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EMEA leveraged finance issuance volumes nosedived in 2018

Publication Date: 22 Jan 2019 - By ReachX Team By ReachX T.

Macro Multi Asset Convertibles Middle East UK EU


Leveraged finance volumes in Europe, the Middle East and Africa (EMEA) “dropped significantly” in 2018 and came to a virtual halt in December, according a leading rating agency. 

In a note to clients, Moody's Investors Service said issuance volumes has slumped 33% on an annualised basis. 

The key driver was the negligible EMEA leveraged finance issuance in December, with bonds virtually stopping from mid-November. Total 2018 issuance plunged to $181bn from $270bn in the previous year.

"The 33% shortfall in leveraged finance issuance compared to 2017 was even larger than expected," says Peter Firth, Associate Managing Director at Moody's.

Bond issuance was down the most at 36%, or $66bn versus $104bn in 2017, while loans were down 31% and shared a larger share of the pie (i.e. 63% versus 61% in 2017).

The European covenant quality indicator fell to 3.83 in the fourth quarter of 2018, its lowest recorded level, partially due to a very weak third quarter attributable to eight bonds scoring in Moody's weakest protection category. 


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