| Maturing fast This year, non-investment-grade debt will be more important to European fixed-income investors than ever before. A lesson of last year was that investors have to take Europe's M&A boom into account. Many eurozone investors lost money in 1999 by trying to be conservative and sticking to top credits only. Having discovered that caution doesn't always equal prudence, the buyside is showing a new surge of interest in lower-rated credits, including high yield. "Right now investors across Europe are increasing asset allocations to high yield by as much as four to five times from 1999 to 2000," says John Wotowicz, European head of high yield at Morgan Stanley, one of the chief sponsors of the sector in the past three years. "We are looking forward to a very, very strong 2000 for high-yield issuance," he adds. A strong 2000 would make a nice change from the mixed experience of 1999. In September Morgan Stanley pulled a $1.1 billion issue for pay-TV company Kirch. Critics said the credit story didn't convince. But Kirch is likely to try again soon. Wotowicz argues that Kirch's autumn failure "tells you more about the market than the deal. |