New European High-Yield Default Index
Fitch has created a new high yield default index specific to the European non-investment grade bond market. The new index complements Fitch’s existing US default series, which spans from 1980 to the present, essentially the entire modern history of high yield in the US, and includes both market and industry-specific default rates. Fitch believes that the dynamic growth of high yield issuance in Europe in the past several years has created a need for a local measure of default risk and a unique benchmark to gauge market performance. The high yield eurobond market has grown from negligible in size to US$42.7bn (Euro43 bn) in approximately three years, and Fitch expects that it will continue to grow as more companies tap high yield bonds to finance restructurings, mergers and acquisitions, leveraged buyouts (LBOs), and other corporate activities in an effort to boost growth and profitability.