McDermott Comment | High Yield Market Developments In Europe And The US


Mark Fine, partner at law firm McDermott Will & Emery, said:

“The market trends in 2021 such as unprecedented government and central bank support coupled with investor demand and low borrowing costs have led to a huge swell of primary issuances this year. Both the high yield and leverage loan markets, to date, have been operating somewhat in contrast to the macro reality across Europe. With the US 10 year bond rallying and having a knock on effect to the equity markets, it is not surprising, that there are some early signs of jitters in the market. This combined with increased talk of inflation may now lead to a slight cooling off period in the high yield and leverage loan markets. As the earning’s season continues we may well see the secondary market beginning to open up again albeit, given what we saw last year, it is not clear for how long.”

Ranajoy Basu, partner at law firm McDermott Will & Emery, added:

“While there seems to be indications of price adjustments following the tremendous push for issuances since the start of the year, there still are very strong signs when one considers the pipeline of transactions coming through to suggest that the market will be resilient and that there is momentum for issuers, at least in the European high yield markets. This certainly holds true for numerous issuances that are being structured from refinancing or broader restructuring purposes. Corporate Trustees have also seen an extremely busy period with both “new money” issuances and refinancing of existing high yields.”