Near Perfect Equity Market Firms Credit (Capital Markets Research)

WEEKLY MARKET OUTLOOK MARCH 30, 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. Near Perfect Equity Market Firms Credit Credit Markets Review and Outlook by John Lonski Near Perfect Equity Market Firms Credit. ¯ 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, Yearlong 2017s sum of bond issuance and new bank loan programs from high-yield companies may top 2013s zenith if defaults drop as expected, begin on page 12. ¯ FULL STORY PAGE 12 Ratings Round-Up by Njundu Sanneh Positives Reassert. ¯ FULL STORY PAGE 16 Market Data Credit spreads, CDS movers, issuance. ¯ FULL STORY PAGE 18 Moodys Capital Markets Research recent publications Links to commentaries on: Eurozone, hike, global, profits, Korea, Caa, yes, hike, VIX, rates, France, demography, boom, Japan, reform, India, Turkey, risk, UK, deregulation, potential. ¯ FULL STORY PAGE 22 Credit Spreads Investment Grade: Year-end 2017 spread to exceed its recent 122 bp. High Yield: After recent spread of 404 bp, it may approximate 480 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 5.6% to a record $1.412 trillion, while US$-priced high-yield bond issuance fell by -3.5% to $341 billion. For 2017, US$- denominated IG bond issuance may rise by 2.4% to a new zenith of $1.446 trillion, while US$-priced high-yield bond issuance may increase by 14.8% to $391 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.ho...