U.S. High Yield Bond Market
The boom in high yield bond issuance that began in 2012 coincided with a steady downward trend in the average underwriting fee paid to banks. New issuance consistently topped $200b from 2012 to 2015, partially shielding underwriters from the squeeze of a 25 to 30 percent drop in average fees per deal. Now that the market is appearing to slow – LTM issuance was only $153
b – underwriters will have to cope with the twin headwinds of fee compression and declining issuance.