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Issuance of European leveraged loans, high-yield bonds drops in Q3 – report

European leveraged loan and high-yield bond issuance slipped to its lowest volume in the third quarter since first quarter of 2016, the Association for Financial Markets in Europe said.

A report published Tuesday said issuance fell to €44.8 billion ($52 billion) in the three months ended Sept. 30, compared with €60.7 billion in the previous quarter and €52 billion in the third quarter of 2017.

AFME said it is the lowest issuance volume since the first quarter of 2016. Figures for that quarter were not immediately available.

Primary high-yield issuance was €17.7 billion across 46 deals in the third quarter of 2018, down from €24.9 billion across 60 deals for the three months ended June 30. In the third quarter of 2017, primary high-yield issuance totaled €19.4 billion across 51 deals, AFME said.

Leveraged loan issuance fell to €27.1 billion in the third quarter, down from €35.8 billion in second quarter and down from €32.6 billion in the third quarter of 2017. Most of the loans made in the third quarter of 2018 were first-lien loans, accounting for about 96.2% of the total. No mezzanine loans were financed in the quarter.

AFME also reported that six bond-related defaults were reported in the third quarter — four of which were in developed markets in Europe and the other two in emerging markets in Europe. The most common reason for default was a missed debt payment.