Moody's: Europe records $16 billion high-yield issuance in January despite Greece and Russia concerns

High-yield issuance volumes hit $16 billion in January, a record for the month since the financial crisis and an indication that markets have largely shrugged off concerns about Greece and Russia so far, says Moody's Investors Service in the February edition of its "High Yield Interest -- European Edition" publication.

"At $16 billion, high-yield issuance volumes for January 2015 more than doubled the $7 billion posted same time last year, despite the ongoing concerns related to Greece and Russia" says Peter Firth, a Moody's Associate Managing Director in the leveraged finance team. "However, issuance remains chunky with high volumes from repeat issuers while greater investor discrimination for lower credit quality continues."

The edition also comments that, for the first quarter of 2015, Moody's expects a continuation of the trends seen in January. The historical decision of the ECB to embark on a quantitative easing programme in Europe will likely further support liquidity in high-yield markets. However, the operating environment for many companies has become more unpredictable on the back of volatile currency and commodity prices.

Although credit quality remains stable, downgrades visibly exceeded upgrades in January including three fallen angels and rating actions on a number of Russian corporates. Moody's continues to expect broadly stable credit quality for 2015 on the back of solid liquidity and extended maturity profiles for many high-yield issuers.

The report also discusses leveraged loan issuance of $8 billion in January, which was lower than bonds in January, for the first-time since June 2014, but nonetheless healthy.

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