Bond-to-Bond Refis to Rise by Over 70% in 2022: Spread Research

By Giulia Morpurgo
(Bloomberg) — Bond-to-bond refinancings in 2022 are
expected increase by more than 70% from this year to EU55b,
according to analysts at Spread Research.
* With many high yield notes trading at or close to their next
call price and below current coupons, issuers will seize the
opportunity to lower their interest expenses, analysts say
* Loan-to-bond issuances should be slightly higher than 2021 at
EU53b, as banks continue to exit credit risks and
sustainability-linked notes strengthen their foothold in
European markets
* Next year will set a record for high yield, as issuance is
expected to reach levels of about EU135b, although with lower
net supply as many bank debt refinancings have already happened
this year
* The pipeline for LBO-related high yield bond issues is thinner
than this time last year, but issuance should remain strong and
could be boosted by jumbo deals such as KKR’s potential
acquisition of Telecom Italia
* Inflation should not come as a problem to most European high-
yield issuers, but those with limited pricing power and no pass-
through clauses in contracts will remain exposed