WEEKLY MARKET OUTLOOKFEBRUARY 18, 2016CAPITAL 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.Very Wide Spreads Warn of Danger AheadCredit Markets Review and Outlook by John Lonski Very Wide Spreads Warn of Danger Ahead. ¯ FULL STORY PAGE 2Topic of the Week returns next weekThe 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 slump in capital formation is broad based according to the anticipated -15% year-over-year drop by Q1-2016s US$ denominated investment-grade bond issuance begin on page 14. ¯ FULL STORY PAGE 14 Ratings Round-Up by Njundu Sanneh Yet Some Companies Benefit from Falling Energy Prices. ¯ FULL STORY PAGE 17 Market Data Credit spreads, CDS movers, issuance. ¯ FULL STORY PAGE 19 Moodys Capital Markets Research recent publications Links to commentaries on: Citi, Hess, CoCos, Anadarko, Apache, T-bonds, MRO, EDF, Encana, Devon, UK, spreads, bank risk. ¯ FULL STORY PAGE 23Credit SpreadsInvestment Grade: Year-end 2016 spread to be less than its recent 182 bp. High Yield: After recent spread of 872 bp, it may approximate 750 bp by year-end 2016.Defaults US HY default rate: after January 2016s 3.1%, Moodys Credit Policy Group forecasts 4.7% by January 2017.Issuance In 2015, US$-denominated investment-grade (IG) bond offerings advanced by 17.5% to $1.297 trillion, while US$-priced high-yield bond issuance sank by -19.5% to $289 billion. For 2016, US$-denominated IG bond issuance may sink by -1.8.% to $1.302 trillion, while US$-priced high-yield bond issuance may drop by -19.7% to $288 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: Tomas Holinka +420 ( 221) 666-384 Tomas.holinka@moodys.com Anna Zabrodzka +420 ( 221) 666-388 anna.zabrodzka@moodys.comMoody's Analytics/Asia-Paci...
