Market Trends 2017/18: High Yield Debt Offerings


Summary

Overall, 2017 was a strong year for high yield issuance in the United States. High yield volume improved significantly from $239.6 billion in 2016 to $283.9 billion in 2017, ending the recent trend of four consecutive years of decline since 2013. In addition, despite a number of looming macroeconomic and geopolitical issues and the generally unpredictable geopolitical and macroeconomic policies (and tweets) of the Trump administration, 2017 was also one of the most stable years in recent memory. While the past five years have been marked by month-to-month (or even week-to-week) volatility in the debt markets, 2017 was relatively consistent, registering eight separate months with at least $20 billion in new high yield issuance (including a stellar $46.2 billion in March 2017), driven largely by opportunistic refinancing activity. Throughout the year, strong economic fundamentals—in particular, strong corporate revenue and cash flows, historically low default rates, and steady commodity ...