European high-yield issuance forecast to rise

Wheat fieldThe European high-yield bond market, which represents a fifth of the €1.3 trillion global market, is set to grow with record issuance predicted this year.

According to estimates from Credit Suisse, European corporates will issue €110 billion of high-yield bonds in 2014 as they begin to tap investors for the capital needed to grow.

“US corporate issuers still dominate the market, but new opportunities can be found in Europe and emerging markets,” says a report by the high-yield debt team at Candriam, formerly Dexia Asset Management.

“Investors are increasingly looking at companies from southern Europe, most of which are making their first steps into the bonds markets.”

According to ratings agency Moody's, high-yield corporate issuance from European peripheral countries such as Italy, Spain, Portugal and Greece doubled in 2013 to account for 27% of total EU high-yield issuance that year, up from 18% the year before, a result Candriam calls “a surprising yet positive sign”.

Meanwhile, high-yield issuance in the US was $324 billion (€234 billion) last year, 6% less than the record achieved the previous year.

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