CROSS-SECTORSECTOR COMMENT 15 June 2016ContactsBenjamin S. Garber 1.212.553.4732 Asst Dir-Economist benjamin.garber@moodys.comABOUT CAPITAL MARKETS RESEARCHAnalyses from Moodys Capital Markets Research, Inc. (CMR) focus on explaining signals from the credit and equity markets. The publications address whether market signals, in the opinion of the groups analysts, accurately reflect the risks and investment opportunities associated with issuers and sectors. CMR research thus complements the fundamentally-oriented research offered by Moodys Investors Service (MIS), the rating agency.CMR is part of Moodys Analytics, which is one of the two operating businesses of Moodys Corporation. Moodys Analytics (including CMR) is legally and organizationally separated from Moodys Investors Service and operates on an arms length basis from the ratings business. CMR does not provide investment advisory services or products.View the CMR FAQ Contact the CMR team Follow us on TwitterMoodys 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.Market CommentECB Injects Rocket Fuel into Euro Corporate Bonds The European Central Banks stimulus policies have had tremendous effects in lowering yields and boosting issuance of euro-denominated corporate bonds. The recent implementation of the banks corporate debt purchasing program will likely reinforce these trends well beyond this year. In light of the regions limp inflation outlook, policymakers will perhaps persist in acting to boost corporate borrowing and economic demand toward the end of the decade. Looking ahead, these actions may serve to lessen investor sensitivity to credit risk while continuing to encourage borrowers from around the world to issue in euros.MOODY'S ANALYTICS CROSS-SECTOR2 15 June 2016 Market Comment: ECB Injects Rocket Fuel into Euro Corporate BondsBond buying announcement catapulted issuance higher Since the March 10 announcement of the ECBs Corporate Sector Purchase Program (CSPP), issuance of euro-denominated corporate debt has rebounded sharply. As part of the increase of monthly ECB asset purchases from ª60 billion to ª80 billion, as of June 8 the bank has started buying investment grade nonbank bonds of companies operating in the Eurozone. Such purchases will likely total billions of euros per month. Firms have rushed to meet the heightened demand for top quality euro debt, with global euro-denominated investment grade corporate issuance of $421 billion year-to-date up 12% year-over-year to the most over the comparable period in four years (Figure 1). That increase occurred despite euro-denominated high grade issuance being limited to $141 billion in January and Februarythe poorest such total for those two months in 13 yea...
