Euro pe­riph­ery high yield is­suance hits $30 bln, same un­likely in 2015

Financial Mirror (Cyprus) - - FRONT PAGE -

The record cor­po­rate high-yield is­suance of $30 bln in 2014 from Italy, Spain, Por­tu­gal, Greece and Ire­land is un­likely to be re­peated in 2015 as cau­tion re­turns to debt cap­i­tal mar­kets, Moody’s In­vestors Ser­vice said in a re­port.

“With con­cerns about the cred­it­wor­thi­ness of some of the euro area pe­riph­ery sov­er­eigns re-emerg­ing, as high­lighted by our re­cent de­ci­sion to re­view Greece for down­grade, we be­lieve new is­suer vol­umes will be lower in 2015 than in the last year,” said Pi­eter Rom­mens, au­thor of the re­port.

Moody’s ex­pects that mar­kets euro area pe­riph­ery high-yield is­suers will re­main open in 2015 as search for yield and higher re­turns in­creases in­vestors’ ap­petite for risk, as re­cently high­lighted by the re­turn of Wind and Tele­com Italia to the debt cap­i­tal mar­kets. How­ever, mar­ket ac­cess will re­main more dif­fi­cult for first-time is­suers and smaller, less well-known names with weaker credit rat­ings.

For Greece in par­tic­u­lar, un­less mar­kets re­gain con­fi­dence in its sovereign risk pro­file Moody’s does not ex­pect an im­prove­ment in new is­suer vol­umes from the coun­try.

Moody’s ex­pects that the start of the quan­ti­ta­tive eas­ing pro­gramme by the Euro­pean Cen­tral Bank will con­tinue to put pres­sure on yield across the Euro Area’s sovereign and cor­po­rate debt mar­kets. This in turn will con­tinue to at­tract in­vestors look­ing to re­duce ex­po­sure to emerg­ing mar­ket risks, while try­ing to main­tain some yield pick-up from the euro area pe­riph­ery.

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