A slight let-up in energy downgrades facilitated a modest decline in Moody’s liquidity stress index (LSI) to 10.2% in April from 10.3% in March, Moody’s Investors Service announced on Tuesday.
The easing in the overall LSI was accompanied by an improvement in the energy sector, as the energy LSI fell to 29.5% in April from 31.6% in March, the New York City-based credit rating agency says..
April also saw renewed market activity, Moody’s adds, including an increase in high-yield bond issuance. “While year-to-date new volume is well below last year’s, improved market access is helping issuers proactively refinance 2017 maturities and amend financial covenants,” says John Puchalla, senior vice president at Moody’s, in a statement.
However, the underlying liquidity trend remains negative, Moody’s notes. Excluding the energy sector, the LSI increased to 5.3% in April from 4.8% in March.
The improvement in the LSI also reflects the bankruptcy-related withdrawal of three issuers from the ratings universe, Moody’s adds.