The Wall Street Journal reports,"riskier companies are issuing debt at their fastest-ever clip in Europe, and now the market looks set to welcome its biggest offering on record.
Monday, French cable operator Numericable Group SA started meeting with investors as it prepares to raise an equivalent of about €6 billion ($8.33 billion) from three chunks of high-yield, or junk, debt, denominated in both dollars and euros.
Demand for high-yield bonds has remained rampant in Europe this year, reflecting record low interest rates that prompt investors to load up on riskier debt that offer chunkier returns. Junk-rated companies have raised about €17 billion from euro-denominated deals since January, the most at this stage of the year on record and almost a third more than at this time in 2013, the previous fastest start to a year, according to Dealogic".
"That demand is also allowing companies with sub-investment grade credit ratings to snag their lowest ever borrowing costs. The average yield for euro-denominated junk bonds hit 4% last week, a record low, according to a Markit index".
"It's a very favorable environment to issue debt," said Arnaud Tresca, head of debt capital markets for high yield at BNP Paribas in London.
Numericable—a subsidiary of Luxembourg-based telecommunications group Altice SA—is seeking to raise funds to help finance Altice's €17 billion acquisition of Vivendi SA 's telecoms business SFR.
Altice, controlled by cable-tycoon Patrick Drahi, earlier this month won a fierce bidding war over SFR, France's second-largest mobile operator.
