AFME is pleased to circulate its European High Yield and Leveraged Loan quarterly data report for the third quarter of 2024. The report provides detailed data and analysis on the issuance and credit performance for the high yield and leveraged loan markets.
Among the main findings of this report:
-
European leveraged finance issuance (leveraged loans and high yield bonds) reached €75bn in proceeds in Q3 2024, a 63% increase from €46bn in Q3 2023.
-
The European share of high yield issuance increased to 32% in Q3 2024, up from 17% in Q3 2023.
-
-
High yield bond issuance totaled €33bn in Q3 2024, a 92% increase from Q3 2023.
-
In the first three quarters of 2024, high yield bond issuance reached a total of €121bn, the second highest amount in our records, just below the amount issued in the first three quarters of 2021 following the recovery from the COVID-19 pandemic (€124bn).
-
High yield bond proceeds in Q3 2024 were mainly used for refinancing (25% of the total), general corporate purposes (23% of the total), and repayment of the debt (13% of the total). In Q3 2024, 16% of high yield instruments were used to finance LBOs and acquisitions, an increasing amount compared to the previous quarters.
-
-
Leveraged loan origination stood at €42bn in Q3 2024, a decrease from €77bn in Q2 2024, but a 46% increase from Q3 2023.
-
Institutional spreads (3-month rolling average) showed consistent stability, starting from 400bps in July to 398bps in September 2024.
-
Food & Beverage has become the leading sector by loan origination amount in Q3 2024, while Healthcare, professional Services, and Computers & Electronics have slightly decreased compared to the previous quarter.
-
-
Credit Quality: S&P reported the trailing 12-month speculative-grade bond default rate at 4.7% in September 2024. Moody’s reported a rate of 3.6% in September 2024, a slight increase from the previous quarter's value.
-
Moody's and S&P reported 12 bond defaults during Q3 2024, mainly due to distressed exchanges and missed payments.
-
Fitch reported a trailing 12-month European leveraged loan default rate at 2.3% in September 2024, down from 3.6% in June 2024.
-
According to Octus (formerly Reorg), 97% of the European leveraged loan deals examined in the first three quarters of 2024 were covenant-lite.
-
