To embed, copy and paste the code into your website or blog: The European debt and equity markets shrugged off the impact of a nearly total shutdown due to COVID-19 at the end of the first quarter of 2020 to rebound with strong performances in the second half of the year. As activity resumed in the late spring, a number of key trends emerged, involving covenant flexibility in high-yield bonds as well as resilient equity markets in the face of both COVID-19 and the impact of pending Brexit regulation. High-Yield Debt: The strong start to 2020 for the European high-yield market, in which bonds regained their market share from the loan market, came to an abrupt halt in March 2020, when governments imposed restrictions due to the COVID-19 pandemic. Markets began returning to life in May and June, leading to a very strong year for European high-yield issuance. An increase in default rates in 2020 reflects at least in part the impact of COVID-19 and the measures taken in response to the outbreak, but this increase did not dampen market enthusiasm for high-yield issuance. Strong volumes in the second half of 2020 were due in part to central bank bond repurchase activities intended to mitigate the impact of the pandemic and the search by investors for yield in a low-interest-rate environment. For issuers, low interest rates presented an opportunity to refinance bonds and loans, and increase liquidity.