Clifford Chance

High Yield Outlook 2020 - Keep On Keepin' On

January 31, 2020

Spurred by an improved global macroeconomic environment, the European High Yield ("HY") market had a strong performance in the second half of 2019. The current HY rally is poised to continue through the first half of 2020 supported by continued macroeconomic and near-term political certainty in Europe. Against this favourable economic and political backdrop, trends seen in the second half of 2019 are likely to persist, such as the prevalence of HY refinancing deals (including loan-to-bond and bond-to-bond), US companies opportunistically accessing the European HY market and the continuous evolution of HY covenant terms. This year is also likely to see an increase in HY-financed M&A mandates, a growing share of the global HY market represented by Emerging Markets issuers and a sustained focus on ESG by HY investors alongside continued financing competition from direct lenders.

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