European High-Yield Bonds 2024 Half-Year Wrap: Resurgent Market Yields Mixed Covenant Terms in Value Leakage, Calculation Flexibilities

Legal Analysts: Bart Capeci, Aditya Khanna Data Visualizations: Elisabeth Campbell Key Takeaways European high-yield bond volumes increased significantly in the first half of 2024, rising to €59.3 billion, a 71% increase over the first half of 2023. Maturities were longer and coupons smaller, reflecting a general increase in market confidence. Aggressive covenant terms had a mixed showing, with some terms increasing in prevalence and others retreating. Overall, aggressive terms were driven by a relatively small number of sponsor deals and were restrained by the large percentage of refinancings. Where we saw increases in aggressive terms, they tended to be concentrated in value leakage and calculation flexibilities. Pushback on covenants during marketing was relatively muted in the first half of 2024 and where successful, was mainly focused on calculation flexibilities, debt incurrence and value leakage. Our H1 2024 analysis for the European restructuring market is available HERE. Our H1 2024 leveraged loans wrap will be available soon. H1 2024 Primary Market Issuance Analysis Volumes Increase Significantly The total volume of European high-yield bond deals reached €59.3 billion in the first half of 2024, a 71% increase over the €34.7 billion in the same period last year, and even eclipsing the €57.5[...]