(The following statement was released by the rating agency)
Oct 5 - Despite lingering, and perhaps even escalating, global risks, investors continued to flock the credit markets in search for better yields in September, said an article published today by Standard & Poor's Global Fixed Income Research, titled "Yield Trumps Risk, For Now."
"Attractive relative returns on offer in the bond markets enticed yield-hungry investors in both the investment-grade and speculative-grade segments," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research. Global corporate new bond issuance was robust in September 2012, totaling $321 billion. This brings the new issuance total for the first three quarters of 2012 to $2.2 trillion--an amount exceeded only during the same period in 2007 and 2009.
Of the $321 billion that came to market in September, Europe accounted for 38.1% of the total, followed by the U.S. (32.7%), the emerging markets (17.6%), and the other developed region (11.6%). Investment-grade new issuance ('BBB-' and higher) made up $201 billion (or 62.7%) of the total, and speculative-grade new issuance ('BB+' and lower) represented $52 billion (16.2%). The remaining $68 billion (21.1%) comprised new bonds that Standard & Poor's Ratings Services doesn't rate.
"Even lower-rated borrowers found a willing audience in September," said Ms. Vazza. Nearly $60 billion of new bonds came to market with a rating of 'B-' or lower. Although the majority of issuers were from the U.S., there were issuers from Europe as well, where the economic landscape at the moment is more challenging, to say the least.
(Caryn Trokie, New York Ratings Unit)