Bangkok--15 Feb--Standard & Poor's
So far this year, U.S. companies have come to the high-yield market with 35 debt issues worth a combined $14 billion, said an article published today by Standard & Poor's, titled "U.S. High-Yield Market Conditions Improve Along With Issuers' Credit Quality (Premium)."
January's debt volume of $13.4 billion is the second-highest monthly total in the 40-year history of our data series (it trails the 38 issues, worth $15.4 billion, in January 2001). This follows a strong showing of 314 issues, worth $132 billion in debt, that came to market in 2009--the fourth-highest annual tally on record. This past year's performance is in stark contrast to the 103 issues, worth $38 billion, in 2008.
Such changes are a result of several factors, including strong refinancing needs among speculative-grade-rated issuers, a combination of monetary accommodation and an improved economic outlook, which spurred a rally in risky assets in the latter half of 2009, as well as speculative-grade issuers regaining access to the bond market at prices near five-year averages.
"We currently expect economic growth to support the glut of refinancing needs among speculative-grade-rated issuers in the next few years, but the stakes are quite high given the $852 billion in speculative-grade debt that will come due from 2012-2014," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research. "However, an unexpected weakening of economic conditions in the next several years could push the issuers at the lower end of the ratings spectrum, especially those rated 'B-' and lower, into bankruptcy or out-of-court restructurings."
This article is part of our premium Global Fixed Income Research content, which is available to premium subscribers to RatingsDirect on the Global Credit Portal at www.globalcreditportal.com and to RatingsDirect at www.ratingsdirect.com. Ratings information can also be found on Standard & Poor's public Web site by using the Ratings search box located in the left column at www.standardandpoors.com. Members of the media may request a copy of this report by contacting the media representative provided.
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