WEEKLY MARKET OUTLOOK MARCH 16, 2017 CAPITAL MARKETS RESEARCH Moodys 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. Less Borrowing Amid Faster Profits Trims Risk Credit Markets Review and Outlook by John Lonski Less Borrowing Amid Faster Profits Trims Risk. ¯ FULL STORY PAGE 2 The Week Ahead We preview economic reports and forecasts from the US, UK/Europe, and Asia/Pacific regions. ¯ FULL STORY PAGE 5 The Long View Check our chart here for forecast summaries of key credit market metrics. Full updated stories, The latest surge by high-yield borrowing has been driven by the refinancing of outstanding debt, as opposed to the accumulation of new debt, begin on page 10. ¯ FULL STORY PAGE 10 Ratings Round-Up by Njundu Sanneh Upgrades Hold Sway. ¯ FULL STORY PAGE 14 Market Data Credit spreads, CDS movers, issuance. ¯ FULL STORY PAGE 16 Moodys Capital Markets Research recent publications Links to commentaries on: Korea, Caa, yes, hike, VIX, rates, France, demography, boom, Japan, reform, India, Turkey, risk, UK, deregulation, potential, BAC, optimism, Portugal, DB. ¯ FULL STORY PAGE 20 Credit Spreads Investment Grade: Year-end 2017 spread to exceed its recent 120 bp. High Yield: After recent spread of 419 bp, it may approximate 475 bp by year-end 2017. Defaults US HY default rate: after February 2017s 5.4%, Moodys Credit Policy Group forecasts it near 3.1% during the three- months-ended February 2018. Issuance In 2016, US$-denominated IG bond issuance grew by 5.5% to a record $1.411 trillion, while US$-priced high-yield bond issuance fell by -3.5% to $341 billion. For 2017, US$- denominated IG bond issuance may rise by 3.2% to a new zenith of $1.458 trillion, while US$-priced high-yield bond issuance may increase by 11.2% to $380 billion, which would lag 2014s $435 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) Li 1.212.553.1404 Xian.li@moodys.com Moody's Analytics/Europe: Tomas Holinka +420 ( 221) 666-384 Tomas....