S&P Global Ratings’ Post

Despite wider macro volatility, CLO issuance has remained robust with close to EUR 5bn of deals pricing in Europe during April. Ytd volume is around EUR 17bn, on track to compete with 2021’s 2.0 issuance record of EUR 39bn. Demand continues to be strong as investor liquidity is supplemented by high debt coupons and favourable equity distributions. Overall, our funds demonstrate undemanding CLO equity valuations and a greater exposure to shorter debt, both of which help to reduce downside risk from a price perspective. At the same time, elevated equity cash flows and further realisation of CLO debt discounts, sets the tone for continued upside.

European #corporates find eager buyers in hyperactive #bondmarket | A wall of #liquidity among #investors has helped to drive a busy start to the year for bond issuers, as they rush to capture tight spreads | #Europe #capitalmarkets http://spr.ly/6045kmOvR

☄️ Companies are increasingly looking for faster and easier routes than traditional underwritten offerings to market their debt securities. With an annual deal flow of over US$100 billion, the debt private placement market is an attractive alternative to underwritten offerings, although nascent in the context of European high-yield issuances (with European market volume of less than €4 billion in 2022). In this briefing, we detail some of the current approaches to privately placed high-yield bonds and their practical and legal basis. Read the briefing ➡️ https://lnkd.in/e2uGBq6B #highyieldbonds

Higher-for-longer interest rates and still-weak growth will cause further divergence between European investment-grade and speculative-grade corporate issuers in 2024. The latter are at greater risk due to a higher debt quantum, greater refinancing costs and often more limited scale and diversification. #corporatefinance #investmentgrade #highyield Learn more https://lnkd.in/ehaSZPCQ

In the latest European Debt Market Monitor, DC Advisory Benelux Co-CEOs, Paul de Hek and Robert Ruiter, discuss the ongoing deal volume recovery in the region and the longer term rebound expected in 2025 and beyond. With Benelux deal volumes in Q1 2024 matching Q4 2023 according to our Lender Survey data, the team discuss why there is reason to remain optimistic. As featured in M&A Community, read the report here to discover the highlights in your region > https://lnkd.in/ewcuUzmU #DebtMarkets #DebtAdvisory #Benelux #DealVolume #MarketRecovery

With the potential to deliver double-digit returns, European high yield structured credit has been a prime focus for investors. But will this continue? M&G have looked at the drivers within the asset class and believe long-term trends could sustain this growth. Our Structured Credit team discuss in their latest white paper why they remain so confident. Capital at risk. Past performance is not a guide to future performance. https://ow.ly/mGPm30sCYhf #europeancredit #highyieldcredit #structuredcredit

Despite a record-setting January for CEEMEA new bond supply, concerns are rising among #investors about declining cash levels and outflows, which could affect demand. In January, $42.7bn of new #bonds or sukuk were issued in CEEMEA, a 17% YoY increase. Investors have shown robust demand, but they warn that the trend may not continue due to decreasing cash levels and ongoing outflows. EM fund managers note that January suffered significant outflows, impacting available cash for new bonds. While February typically sees a reduction in supply, some anticipate a busier month this year, driven by a backlog of mandates from 2023. Despite the strong start to the year, concerns linger about how long this trend can be sustained, especially as investors can still take high yields from assets perceived as safer than EM. “Where we go depends on the course of core rates and flows, how much cash people have left, and whether they need to generate new cash to participate in new issues,” said one EM fund manager in London. Sign up to read the rest of the story and comments from Philip Fielding, co-head of EM debt at MacKay Shields LLC, Mark Bodon, senior EM fixed income portfolio manager at AXA Investment Managers, investors, syndicate heads, EM fund managers, and bankers: https://lnkd.in/e9q34tVc Written by George Collard, senior emerging markets reporter, and Oliver West, US bureau chief at GlobalCapital #capitalmarkets #emergingmarkets

"I think the most compelling opportunity today is in Private Credit. And it comes in two flavors: First, the corporate credit, so lending directly to corporates, and that's in Europe, in Asia in particular, and there is a good reason for that. There is a fundamental demand-supply imbalanceas a result of the volatility in the public markets, which are either inaccessible or the price is uncertain creating anxiety for the borrowers and therefore, they'd rather deal on a bilateral basis with a private credit provider that has less volatility,either in its appetite or in its pricing.The second bucket for secondaries is following the adjustments of the normalization of interest rates because it has taken such a short period, it has created the need for some of the investors to adjust their balance sheets and divest of some positionswhich means great opportunities for buyers of LP (Limited Partnership) stakes in credit funds." Emmanuel Deblanc, Global head of Private Markets at #AllianzGlobalInvestors on 2024 Outlook and Investment Opportunities (Private Markets). More on his Private markets strategy: https://lnkd.in/dnmTHjCX More on the overall outlook: https://bit.ly/3NYW0yC #Outlook #2024 #PrivateMarketsStrategy #PrivateMarkets #NavigatingRates #EmbracingDisruption

"I think the most compelling opportunity today is in Private Credit. And it comes in two flavors: First, the corporate credit, so lending directly to corporates, and that's in Europe, in Asia in particular, and there is a good reason for that. There is a fundamental demand-supply imbalanceas a result of the volatility in the public markets, which are either inaccessible or the price is uncertain creating anxiety for the borrowers and therefore, they'd rather deal on a bilateral basis with a private credit provider that has less volatility,either in its appetite or in its pricing.The second bucket for secondaries is following the adjustments of the normalization of interest rates because it has taken such a short period, it has created the need for some of the investors to adjust their balance sheets and divest of some positionswhich means great opportunities for buyers of LP (Limited Partnership) stakes in credit funds." Emmanuel Deblanc, Global head of Private Markets at #AllianzGlobalInvestors on 2024 Outlook and Investment Opportunities (Private Markets). More on his Private markets strategy: https://bit.ly/3vxPCYK More on the overall outlook: https://bit.ly/48wC0LS #Outlook #2024 #PrivateMarketsStrategy #PrivateMarkets #NavigatingRates #EmbracingDisruption

With the potential to deliver double-digit returns, European high yield structured credit has been a prime focus for investors. But will this continue? M&G have looked at the drivers within the asset class and believe long-term trends could sustain this growth. Our Structured Credit team discuss in their latest white paper why they remain so confident. Capital at risk. Past performance is not a guide to future performance. https://ow.ly/mQqG30sCToW #europeancredit #highyieldcredit #structuredcredit