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RPT-Fitch Publishes Second Edition of Leveraged Finance 'Annual Manual for the Americas'
April 8, 2013 / 10:06 AM / 5 years ago

RPT-Fitch Publishes Second Edition of Leveraged Finance 'Annual Manual for the Americas'

April 8 (Reuters) - (The following statement was released by the rating agency)

Fitch Ratings today published the second edition of its ‘Annual Manual for the Americas,’ providing market constituents a comprehensive overview of the leveraged finance market.

First published in May 2012, Fitch’s ‘Annual Manual,’ contains both quantitative data and qualitative analysis covering the high yield bond and leveraged loan markets, private equity and the collateralized loan obligation (CLO) sector. While focused primarily on the U.S. market, it also summarizes data and key trends in the Latin American and Canadian markets.

Key topics covered in the report include:

--Fitch’s rating criteria, in particular the linkage between a parent company and its subsidiaries and bondholder recovery projections

--Macroeconomic cyclicality and growth trends

--Review of and outlook for the high yield bond, leveraged loan, private equity and CLO markets

--Recovery implications of U.S. pension liabilities

--U.S. bankruptcy law

--Bond and loan covenants

--Fitch’s approach to rating ABL-inclusive capital structures and second-lien debt

--High yield default commentary and projections

The report also provides data and commentary for issuers in Fitch’s non-investment grade portfolio.

In 2012, issuance in both the high-yield bond and leveraged loan markets hit new annual highs and marked the fourth consecutive year issuance exceed their annual long-term averages. Similar trends have continued into the first quarter of 2013, with high-yield bond and leveraged loans each posting solid quarters. Fitch projects that default activity in 2013 will remain in line with 2012 results. Fitch has forecasted a default rate of 2% by the end of 2013, barring a bankruptcy filing from Energy Future Holdings, which, due to its large size, has the potential to push the rate above 3%. The U.S. high yield default rate is expected to remain low - supported by good corporate fundamentals and strong funding conditions.

Fitch’s U.S. Corporates group covers more than 95% of the dollar volume of the top 200 corporate debt issuers in the leveraged finance market. Fitch’s Leveraged Finance team participates in the market through a coordinated effort across other analytical and research departments. Fitch also has a strong presence in Latin America, rating the majority of the largest and most active issuers. Canada is a generally nascent market with annual high-yield issuance equal to a high volume week in the U.S. However, Fitch believes Canada’s market will continue to grow over the next decade.

The full ‘Annual Manual for the Americas’ is available at ‘’.

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