The issuance of leveraged loans and high-yield bonds in Europe Middle East and Africa [EMEA] declined in June, contributing to a $67bn first-half total, the lowest since 2016, according to a leading rating agency.
In report for its clients, Moody’s said: "On average, second-half issuance tends to be around 75% lower than first-half issuance, but given the various macro causes of volatility affecting issuance, we expect leveraged finance volumes in the second half to be similar to those of the first half and that issuance for 2019 will be around $130bn, compared with $180bn last year."
Bond issuance fell to $4.0bn in June from $9.2bn in May, while loans dropped to $6.8bn from $8.4bn.
Although there are a few sizable loans on the immediate horizon, such as Nestle Skin Care, bond issuance appears weaker in the short term at least. And while central bank monetary policies may have become more accommodating for the market, geopolitical risks remain including Brexit, compounded by the slowdown in macroeconomic growth,” said Kristin Yeatman, Vice President and Senior Analyst at Moody's.
The UK was by far the strongest country of issuance in June, featuring in 10 out of the 18 transactions recorded, evenly split between loans and bonds. In the first half of 2019 only 19% of newly rated issuers came to the market with bonds, Moody’s concluded.
Disclosure:
I have no positions in any of the securities referenced in the contribution
I do not use any non-public, material information in this contribution
To the best of my knowledge, the views expressed in this contribution comply with UK law
I agree with the terms and conditions of ReachX
This contribution is for informational purpose and does not constitute investment advice nor is it an offer to sell or buy, nor is it a recommendation for any security.
ReachX T.
