Post 9/11 "rebound" recalls late-2000 market, say Credit Lyonnais directors

By Paul A. Harris

St. Louis, Mo., Nov. 1 - High yield market investors, traders and underwriters, recalling the halcyon days of late 1998 when "$17 billion a month was coming, for a couple of months, there," may derive little sustenance from the $2.55 billion that priced in October 2001. Nevertheless, to David Travis, director and head of the Credit Lyonnais High Yield Group, October's figures represent a "rebound."

In an interview Thursday with Prospect News, Travis said that October 2001 reminds him of conditions that prevailed in the market late in 2000 when activity picked up after a very slow year.

"If you look at the rebound we've seen, post-9/11, it has some similarities, on a week-by-week issuance, to late last year and early this year," Travis said.

"There are pretty good issuance levels over the past three weeks," he added, "Much like we saw at the beginning of this year, after a very difficult market in 2000."

The figures bear out the breadth of the rebound Travis alluded to: October saw $2.55 billion of business come to the primary market, up from $365.15 million in September, which came entirely before the terrorist attacks of Sept. 11.

Travis expressed optimism that October's rebound will generate momentum in the market through the remainder of 2001, and into the new year.

"Our expectation after Labor Day was that we were going to see very heavy issuance in the last four months of this year," he said.

"I think there's a lot of demand from the issuer side. People want to be coming to the market. That might help to keep volume relatively solid for the next several months, assuming no disruptions in the market, and so forth."

Andy Einhorn, managing director of the Credit Lyonnais High Yield Group, mentioned that the group had taken note of the upsized Westport Resources deal, which priced Wednesday - a deal that numerous syndicate sources said was two-to-three times oversubscribed. He believes that the high level of demand in that and other paper that hit the primary in recent weeks reflects building confidence, on the part of investors.

"We continue to see very good demand from accounts, Einhorn said late Thursday afternoon. "I think the equity trade-up today is really just underscoring that."

End

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