Page 22 - Aequitas Europa
P. 22
21
European high yield debt:
why do investors like it and
where does its future lie?
W
ith a combination of debt prices peaking and riskier corporate debt, the level of
uncertainty in the European high-yield credit market is ever increasing. The credit
rating agency Fitch advised in November 2017 that this continuing trend will likely
see a marked change in the European high-yield debt market.
In Q4 2017 yields on the most prominent European junk bond benchmark (ICE BAML Euro High
Yield Debt Market) fell to almost two percent for the first time. But how much of this is down to
the recent calm in the market and the European Central Bank’s (ECB) monetary policy drive
potentially distorting the risk/reward for investors in the high-yield debt market?
Economic data – Federal Bank of St Louis
