The further erosion of investor protections is
set to define this year’s high-yield market. Here
are the covenants giving issuers even greater
In an article published in IFLR last July, we reflected on
the record volume of European high-yield issuances during the
early part of 2013, and the issuer-friendly terms that were
appearing as a result. This increase in activity continued
throughout the year, and market expectations for 2014 are
similarly positive. With issuance continuing at a pace, and the
inclusion of more issuer-friendly terms showing no signs of
abating, it's timely to consider the features that are defining
this year's market.
The vast majority of features highlighted last July continue
to appear in recent issuances. A few points, however, have
developed further, and have given investors more to ponder.
These changes merit further consideration and analysis.
Enhancements from 2013
To recap, high-yield bonds typically contain...