It was a rather soft week in the high-yield credit markets with both the iTraxx Crossover and our Nordic High-Yield Index widening by 14bp (DBM HY index return last week: -1.5%). While most fundamentals and technicals are in favour of credit, we believe the heavy issuance is taking its toll on the markets.
Net supply in 2015 YTD is already on par with all of 2014 (and larger than the three previous years) driven by subordinated debt (financials) and high yield. This makes it difficult for investors to digest the new issue pipeline.
According to Bloomberg > 50% of the European leveraged loans arranged so far in 2015 is originated with limited covenant protection (up from 36% in 2014), illustrating the strong investor appetite YTD for riskier credits.
Please contact your sales representative in Danske Bank Markets in case you need to obtain quoted prices on corporate bonds wihin our Nordic high yield universe.
To Read the Entire Report Please Click on the pdf File Below