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European Debt and Equity Markets Resilient in Face of Turbulent Year | Skadden, Arps, Slate, Meagher & Flom LLP


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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 respons ....

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