Disappointing Economy Menaces Credit's Benign Outlook (Capital Markets Research)

WEEKLY MARKET OUTLOOKMAY 21, 2015CAPITAL MARKETS RESEARCHMoodys Analytics markets and distributes all Moodys Capital Markets Research, Inc. materials. Moodys Capital Markets Research, Inc is a subsidiary of Moodys Corporation. Moodys Analytics does not provide investment advisory services or products. For further detail, please see the last page.Disappointing Economy Menaces Credits Benign Outlook Credit Markets Review and Outlook by John Lonski Disappointing Economy Menaces Credits Benign Outlook.¯ FULL STORY PAGE 2The Week Ahead We preview economic reports and forecasts from the US, UK/Europe, and Asia/Pacific regions. ¯ FULL STORY PAGE 4 The Long View Check our chart here for forecast summaries of key credit market metrics. Full updated stories, Second-quarter 2015s worldwide issuance of corporate bonds is likely to show year-over-year setbacks of -1% for investment-grade and -36% for high-yield, begin on page 15.¯ FULL STORY PAGE 15Ratings Round-Up by Njundu Sanneh Moodys Bank Ratings Review Upgrades Many US Banks.¯ FULL STORY PAGE 18Market Data Credit spreads, CDS movers, issuance.¯ FULL STORY PAGE 22Moodys Capital Markets Research recent publications Links to commentaries on: Best Buy, Lat Am, Exxon, HY covenants, euro bonds, Comcast, JetBlue, Greece, risk, Monsanto, Toyota, Genworth, Ally, bank risk, Jamaica, AXA. ¯ FULL STORY PAGE 26Credit Spreads Investment Grade: Year-end 2015 spread to be under its recent 136 bp.High Yield: Recent spread of 451 bp could dip to 445 bp by September 2015.Defaults US HY default rate: April 2015, 1.7%; 2.9% average in 1Q/2016Issuance For 2015, US$ IG bond offerings may grow by 12% to $1.263 trillion, while US$ HY bond issuance dips by -3% to $410 billion. In 2014, US$ IG bond issuance rose by 0.9% to $1.129 trillion, while US$ HY bond issuance dropped by -2.3% to $421 billion.Click here for Moodys Credit Outlook, our sister publication containing Moodys rating agency analysis of recent news events, summaries of recent rating changes, and summaries of recent research.Moodys Capital Markets Research, Inc.Weekly Market Outlook Contributors: David W. Munves, CFA 1.212.553.2844 david.munves@moodys.com John Lonski 1.212.553.7144 john.lonski@moodys.com Ben Garber 1.212.553.4732 benjamin.garber@moodys.com Njundu Sanneh 1.212.553.4036 njundu.sanneh@moodys.com Yukyung Choi 1.212.553.0906 yukyung.choi@moodys.com Irina Baron 1.212.553.4307 irina.baron@moodys.com Franklin Kim 1.212.553.4419 franklin.kim@moodys.com Xian (Peter) Li1.212.553.1404 Xian.li@moodys.comMoody's Analytics/Europe: Zach Witton 44 (20) 7772-1678 Zach.witton@moodys.comMoody's Analytics/Asia-Pacific: Katrina Ell 1.612.9270.8144 Katrina.ell@moodys.com Faraz Syed 1.612.9270.8146 Farad.syed@moodys.comEditor Dana Gordon 1.212.553.0398 dana.gordon@moodys.comCAPITAL MARKETS ...