LatAm high-yield issues drop in first quarter
April 30, 2020 |
Moody's expects bond sales to stay "subdued" in the second quarter as the coronavirus takes an economic toll
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High-yield bond sales by issuers in Latin America came to $3.9 billion in the first quarter this year, down from $5.2 billion in the same period last year but still in line with figures from the fourth quarter of2019, Moody's said in a report.
Corporate bond sales started strongly with $3.8 billion in January this year, but the coronavirus outbreak put the brakes on new issues in February and March, according to Martina Gallardo-Barreyro, a senior analyst in the corporate finance group at Moody's.
"We expect regional high-yield issuance to remain subdued in the second quarter of this year as the coronavirus crisis weakens countries' economic performance," Gallardo-Barreyro said in a press release.
Corporate refinancing needs, however, will remain low through the end of 2020 with $800 million in high-yield bond maturities for the rest of the year, Moody's said.
The rating agency downgraded nine issuers in the first quarter this year, including seven in March due to weaker-than-expected market conditions during the coronavirus pandemic, it said.
The three high-yield bonds from Latin America that Moody's rated in the first quarter were so-called lite bonds, which automatically received the lowest covenant quality of score of 5, the rating agency said.
Moody's rates 97 high-yield issuers in Latin America with $120 billion in outstanding bonds, it said.