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Leveraged Finance Issuance Reaches Record High in January

Despite the year-over-year increase in January's leveraged finance issue in Europe, Middle East and Africa (EMEA), Moody's Investors Service predicts the rising stock market volatility will bring numbers back down in February.

Leveraged finance issuance was recorded at a record high for the month of January, which Moody's reported was thanks to new issuers coming into the market. The January 2018 volume reached nearly $22.5 billion, up $3 billion from the prior year. High-yield bond volume was also up $1 billion year-over-year in January.

Moody's Associate Managing Director Peter Firth said in the Feb. 20 report that January issuers were encouraged by the stable market and willing to take on "riskier investments."

"Issuance could slow somewhat in February as equity market volatility may spill over into leveraged finance issuance activity," Firth explained in the report. "Transactions could be delayed or postponed and we expect the high-yield bond market to remain more susceptible compared to leveraged loans."

Rising interest rates and tightening monetary policies in the U.S., U.K. and Europe also remain risks, Moody's said.

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Monday, 11 December 2023

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