High yield bond issuance outpaces year-ago period

US Chart of the Week, 7 March 2019

The high yield bond market is on a firm footing again in 1Q19, having bounced back from market volatility in 4Q18.

Issuance has topped the year-ago level, while prices have climbed in the secondary market on the back of inflows into high yield bond funds. The more dovish interest rate stance from the Federal Reserve and improved bond investor sentiment helped buoy the bond market so far in 1Q19, overcoming worries about global growth and high corporate leverage.

High yield bond volume slipped in February to USD 16.1bn from USD 19.3bn in January, but year-to-date volume is still above the USD 31.4bn posted in the same period last year. A feature of the market this year is the popularity of secured bonds, and this trend continued in February as borrowers took advantage of investor appetite and the relatively attractive pricing on offer. Secured bond issuance totaled USD 18bn in the first two months of 2019, accounting for just over half of overall high yield bond volume.

From a performance viewpoint, high yield bonds posted a return of 1.69% in February, following a large gain of 4.59% in January, according to ICE. This took the year-to-date return to an impressive 6.36%, putting the losses recorded in 4Q18 firmly in the rearview mirror.

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Colm (C.J.) Doherty Global Head of Primary Market Analysis Debtwire

Colm Doherty is Debtwire’s Global Head of Primary Market Analysis. He is responsible for leading the production of primary market analysis and reports focused on the leveraged loan and high yield bond markets. Prior to joining Debtwire, Colm was Director of Analysis at Thomson Reuters LPC covering leveraged loans, CLOs and high yield bonds.

Colm has a B.A. in Economics & Legal Science from National University of Ireland Galway and an MSc. in Accounting & Finance from Ulster University.

Colm (C.J.) Doherty Global Head of Primary Market Analysis Debtwire

Colm Doherty is Debtwire’s Global Head of Primary Market Analysis. He is responsible for leading the production of primary market analysis and reports focused on the leveraged loan and high yield bond markets. Prior to joining Debtwire, Colm was Director of Analysis at Thomson Reuters LPC covering leveraged loans, CLOs and high yield bonds.

Colm has a B.A. in Economics & Legal Science from National University of Ireland Galway and an MSc. in Accounting & Finance from Ulster University.

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