Moody’s 1Q17 Earnings Call Notes

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Mark E. Almeida – Moody’s Corp

There is going to be anxiety around elections throughout the year

“there is going to be a level of anxiety around each of these elections throughout the year and they are spaced out throughout the year So, I imagine, we’re going to be having periods of relative optimism and then periods where market participants pull back, awaiting the outcome of these various elections.”

Raymond W. McDaniel, Jr. – Moody’s Corp.

These are good conditions for debt issuance

I think it’s each of the items you identified and right now, rates and spreads are very attractive. So, it is a good opportunity for issuers to be in the market, whether it’s refinancing or new money or upping their outstanding debt. These are attractive conditions and looking ahead to potential interest rate increases going forward. And again some of the uncertainty that comes with the geopolitical situation and the elections in Europe. Yeah, we do think issuers are taking advantage and we’re certainly not anticipating a weak second half of the year, as I said earlier, but the kind of growth we’ve seen early in this year, we just don’t think is going to be sustained.

CLO spreads are at multi year lows

“In CLOs, similarly to the strength in the leveraged loan market, spreads there continue to tighten, again at multi-year lows. We’ve seen very heavy refinancing activity. That continued all the way into April. I would think that will slow down a bit, probably pick back up again sometime in the third quarter and we are seeing some new CLO issuance in the pipeline. So, it’s not just going to be weighted towards all of that refi activity.”