THE fall in asset prices and increase in financial market volatility in Q3 had a significant negative impact on global issuance of debt securities, says Moody’s Investors Service in a new report published.
The report “Financial Market Sell-off Hit Global Debt Issuance in Q3”, is now available on www.moodys.com. Moody’s subscribers can access this report via the link provided at the end of this press release.
Moody’s notes that global primary issuance of debt securities by financial institutions (FIs) and non financial corporations (NFCs) totaled $804 billion in Q3 2014, compared with $1.1 trillion in Q2.
“Primary issuance markets have been negatively affected by growing concerns about the global growth outlook and uncertainty about the timing, pace and economic impact of future US monetary policy tightening,” notes Marie Diron, a Senior Vice President in Moody’s macroeconomic unit.
Moody’s says that the fall in issuance was broad-based across regions and sectors. Issuance decreased by about 38% from the previous quarter in both advanced economies and emerging markets. At the sector level, issuance by both NFCs and FIs was significantly lower than in the
previous quarter.
In particular, high-yield (HY) issuance in Europe was nearly two-thirds lower than the record high levels in Q2. Due to high levels of issuance in the first half of the year, year-to-date issuance by NFCs is broadly unchanged from 2013, while issuance by FIs is $290 billion higher.
“Financial market tensions have continued at the beginning of Q4,pointing to even lower issuance this quarter than the high levels seen during the first half of the year,” continues Ms Diron.
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