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2021/09/16 / Erste Group Research

High Yield credit metrics improving

As expected, the announcement of the ECB to slightly reduce the volume of bond purchases as part of the PEPP did not trigger any widening of spreads. In fact, in the high-yield segment, spreads even narrowed. In the corporate bond segment, the monthly purchase programme based on the PEPP (most recently about EUR 1.3bn per month) is already clearly below the CSPP specs (about EUR 4bn in August). The latter one continues without changes. Until the December meeting at the very least, the ECB should not be the source of any significant impulses for the credit market.

After the end of the reporting season we can see, as expected, that the interest coverage ratio and debt payoff period have improved further in the high-yield rating categories BB and B in Q2. The cyclical sectors recorded the most significant improvements; this is where the economic recovery was reflected the most noticeably. The weakest rating category, i.e. the CCC segment, was the only one where credit metrics deteriorated.

Special topic:

Issuer in focus: ASFINAG

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General information

AuthorErste Group Research
Date2021/09/16
Languageen
Product nameCredit News
Topic in focusCredits/ Corporate bonds
Economy in focusAustria, Eurozone
Currency in focusEuro
Sector in focus-
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