Moody's: EMEA high-yield bond market slow to resume after summer break

The high-yield bond market in Europe, the Middle East and Africa is returning slowly after August summer break, with issuers waiting on the sidelines for it to fully resume, says Moody's Investors Service in the September edition of "High Yield Interest -- European Edition".

High-yield bond issuance remained muted in July and August with $4.5 billion and $0.4 billion, respectively, which is below the $6.7 billion recorded in June and a sharp contrast to a record $11.3 billion issuance in July 2014 alone.

"After limited activity in August and a slow start into September, the second half of September and early October are likely to be good indicators for high-yield bond activity for the rest of this year," says Peter Firth, a Moody's Associate Managing Director. "However, high-yield bond markets are only slowly gearing up amid a difficult environment with equity market volatility, fund outflows from the asset class and mixed secondary markets."

Overall, muted activity in the first few weeks of September is creating challenges to find the right price points for many deals. The US Fed's meeting on interest rates could relieve some of the uncertainty on the demand side, at least in the short term, boosting issuance in EMEA.