The European High-Yield Market: Drivers and Constraints
Feb 22, 2000
Thomas Hall

Will the next decade for Europe be characterized by leveraged buyouts and high-yield debt issuance similar to the corporate restructuring experience of the United States in the 1980s and 1990s?

It is now commonplace to assert that Europe is on the threshold of similar restructuring as a result of economic integration (e.g., the launch of the euro in 1999) and heightened competition. At the same time, however, it is unlikely that the European high-yield market in the next decade will exactly duplicate the U.S. experience in the 1980s and 1990s. Differences in legal systems and other institutions mean that constraints on the fundamental drivers toward competition and capital-market development will attenuate the growth of the high-yield market.

The purpose of this policy short is to explore these drivers and constraints and examine how they will affect this market in Europe during the next five to 10 years.