Bigger, better, longer and riskier – that was the motto of Europe’s high-yield bond market in 2013. The region saw its highest ever issuance of speculative grade-rated bonds at €87bn, more than €26bn ahead of the previous record year. Volumes were boosted by debut issuers refinancing their bank loans in the capital markets, as well as by investor appetite for higher yields and thus more aggressive structures and lower products.
More than 60 first-time issuers graced the market in 2013 from a host of new sectors and countries. For many the move to the bond market has been accelerated because of historically low yields, which helped the European market move closer to its US counterpart. But with the end of quantitative easing in the US, the artificially created rate environment is set to end. How will the market react?
