Issuance slowdown raises refinancing fears for high yield borrowers

Corporate bond issuance plummeted in May, with issuers and investors wary of the effects of the ongoing sovereign crisis on the credit markets. Faced with an unprecedented refinancing wall, it may be high yield borrowers who suffer most.

Delaying the day of reckoning: high yield borrowers face refinancing worries

While it was becoming increasingly apparent early on this year that all was not well in the Eurozone, the credit markets continued to build on the momentum generated throughout 2009. The high yield sector, usually the first to suffer whenever there is a flight to quality, was particularly strong. According to Dealogic, first-quarter issuance in the US market totalled $85.6 billion – a record for any quarter – while the €9.3 billion of deals completed in Europe was the second highest quarter on