High-Yield Market May Close to Some Borrowers in 2nd Half
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Some companies may be shut out of Europe’s high-yield bond market in the second half as investors demand higher coupons amid concerns the region’s debt crisis will worsen, according to Fitch Ratings.
Demand for junk-graded bonds “has slowed considerably” after European companies including Fiat SpA and Renault SA issued a record 36.8 billion euros ($52 billion) of debt in the six months to June 30, analysts Mathias Volkmer and Ed Eyerman wrote in a report. Companies may hesitate to sell securities as the debt crisis and slower global economic growth saps investor confidence, according to the report.