In what has been an eventful start to the year, with Altice France, Intrum and Ardagh Group each giving investors headaches, European high yield primary issuance has gotten off to a hot start. We’ve taken a look at some of the key figures and trends throughout Q1 2024:

TLDR;

• European high yield companies issued €24bn in Q1 24, which is over 2x higher than the €11.6bn issued in Q1 23
• Refinancings dominated, accounting for 84% of issuance. Meanwhile, new money deals were thin on the ground, with no LBOs and few recapitalisations or acquisitions
• Spreads for risk assets are now exceptionally tighter, with the iTraxx Crossover closing Q1 at 299bps, well inside the 375bps-475bps range for most of 2023
• However, borrowers should still expect to pay up in a refinancing. Based on current yields and average coupons, Single B companies average a 1.4x uplift in funding costs when refinancing, whereas double BB rated companies are looking at only a 1.1x increase
• Sterling issuance has made a return, with €2.1bn equiv. printed in Q1 24, outperforming that seen in 2023
• We estimate €10bn has been removed from the 2025 and €4bn from the 2026 maturity wall during the first quarter