High Yield Bonds - The Rise of the Fallen

Published on 21 Apr, 2015

Global high yield bond markets

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The global high yield bond markets have witnessed sentiment to risk-off mode. This has since been partially significant growth and diversification over the last few years aided by the extraordinary monetary policy accommodation provided by central banks across the world. The unprecedented liquidity made available at record low yields has thus led to a significant pick up in both primary market and secondary market activity in the asset class. Banking disinter-mediation in Europe and regulatory changes in the financial sector further contributed to the deepening and diversification of the high yield bond markets even as emerging market issuance entered the fray.

In this backdrop, Aranca’s special report - High Yield Bonds - The Rise of the Fallen - examines how liquidity concerns have increased with changing regulatory environment, rising capital requirements and declining risk appetite leading to decreasing bond inventories at both banks and other dealers even as corporate bond issuance are at an all-time high.