Investors buoy up US high-yield
Strong demand kept US high-yield new issues flowing fast through the usually quiet end-of-year period. But with the market open to issuers from all sectors with often untested track records, are buyers riding for a fall? Kathryn Tully reports.
THE END OF December is customarily a time when the primary markets are winding down in advance of the holidays. It's when syndicate heads have a chance to get together for a pre-Christmas celebration and look forward to taking some time off work.
There was no such luxury for those working in the US high-yield market at the end of last year. The market tends to get quieter after Thanksgiving but this time the pace of new issues accelerated.
"December is usually a moderate month but it could end up being the busiest of the year," said Mike Meyer, managing director and head of leveraged finance debt capital markets at Bank of America, in mid-December. "The previous high was $15 billion in a month, but we've done well over $10 billion this month, we're doing more deals this week and there are more coming next week right up until Christmas." And that's not the end of it. "January could be very busy and could break all records," he added.
All this unaccustomed activity marked a storming end to the biggest ever year in the US high-yield market. As Euromoney went to press, total volumes of new issuance had already surpassed the previous record volume years of 1998 and 2003, when the market clocked up $140 billion-worth of deals.