Table 1

Global Issuance Summary And Forecast
(Bil. $)	Industrials¶	Financial services	Structured finance*	U.S. public finance	International public finance	Annual total
2010	1,286.3	1,484.5	895.0	433.3	306.9	4,406.0
2011	1,339.5	1,332.1	942.4	287.7	336.3	4,238.0
2012	1,778.4	1,563.6	786.1	379.6	338.7	4,846.4
2013	1,911.5	1,499.3	803.5	334.1	316.2	4,864.7
2014	2,072.2	2,012.8	905.3	339.0	339.8	5,669.2
2015	2,025.8	1,752.6	905.0	397.7	446.0	5,527.0
2016	2,263.8	1,931.0	807.6	444.8	739.0	6,186.1
2017	2,285.9	2,099.8	901.8	448.6	541.4	6,277.5
2018	2,032.3	1,988.4	1,062.0	338.9	480.5	5,902.2
2019	2,457.1	2,225.9	1,159.0	426.3	763.0	7,031.4
2020	3,319.2	2,594.6	866.8	474.0	1,051.9	8,306.6
2021 full-year forecast (% chg, YoY)	(8.6)	3.5	2.5	(5.0)	(7.0)	(3.2)
2021 ranges (%)	-14 to -4	0 to 6	0 to 5	-10 to 0	-10 to 0	-11 to 3
¶Includes infrastructure. *Structured finance excludes transactions that were fully retained by the originator, domestically rated Chinese issuance, and CLO resets and refinancings. Sources: Refinitiv, Green Street Advisors, and S&P Global Ratings Research.

The Slow Return To Normal

As we've noted throughout the pandemic, issuance growth has proceeded in atypical ways. This has culminated with a year in which nearly all asset classes hit record highs despite the global economy facing a once in a hundred year stressor characterized by periodic economic lockdowns across most countries. Normally, issuance and GDP are positively correlated: as GDP rises (or falls), so does bond issuance. However, over the course of 2020, this relationship has reversed. Certainly, the significant liquidity support central banks have provided has made a difference, particularly in rejuvenating market confidence by providing a backstop. This has enabled many companies to issue extraordinary amounts to shore up cash amid high uncertainty while an effective vaccine was still distant.

Markets were so supportive that some of the corporate sectors that saw the largest increases in bond issuance relative to the prior five years were those most negatively affected by economic lockdowns (see chart 2). This has raised leverage for many, which will likely act as a headwind to issuance this year as firms try to lower leverage now that effective vaccines are starting to be deployed and hope of the economy returning to normal rises.

Not only have many issuers been able to issue new debt, but markets have been so receptive that yields are hitting all-time lows on new issues, both in the corporate and public finance sectors (see charts 3-4). Alongside very low yields, maturities have been lengthening, particularly for investment-grade (rated 'BBB-' or higher) corporations in developed countries.

These favorable conditions could see some reversal this year. GDP contractions in many countries reached decades-long lows in 2020, particularly in the second quarter. Other major economic variables such as unemployment rates also experienced quick changes, and fiscal and monetary policies in many countries expanded dramatically. In some cases, certain measures have been reversing course fairly quickly, but it will likely take a while for most economies to return to their 2019 levels (see table 2).

Table 2

Global GDP Growth Forecasts And Recovery Timelines
						--Recovery to year-end 2019--
(%)	2019	2020	2021	2022	2023	GDP	UN
U.S.	2.2	(3.9)	4.2	3.0	2.1	Q3 2021	> 2023
Eurozone	1.3	(7.2)	4.8	3.9	2.2	Q2 2022	Q4 2023
China	6.1	2.1	7.0	5.0	5.0	Q2 2020	Q4 2020
India*	4.2	(9.0)	10.0	6.0	6.2	Q2 2021	n/a
Japan	0.7	(5.5)	2.7	1.3	0.9	Q1 2023	> 2023
Russia	1.3	(3.5)	2.9	2.7	2.0	Q4 2021	Q2 2023
Brazil	1.1	(4.7)	3.2	2.6	2.6	Q3 2022	Q1 2023
U.K.	1.3	(11.0)	6.0	5.0	2.4	Q4 2022	> 2023
World**¶	2.8	(4.0)	5.0	4.0	3.6	N/A	N/A
*India: Fiscal year is April of the reference year to March the following year. ¶Constructed using PPP exchange rates. N/A--Not applicable. Sources: S&P Global Economics and Oxford Economics.

As the economic recovery progresses, particularly in the second half of the year once vaccine deployment becomes more widespread (as we currently expect), the need for large fiscal and monetary stimulus should start to wane. Private- and public-sector borrowers should find less motive to rush to markets to secure funds to wait out a pandemic as well. In the issuance surge of 2020, many corporations have also stocked up all-time high levels of cash and marketable securities during the pandemic, leaving less need for additional funding in the near term (see charts 5-6).

Though full economic recovery may take some time, financial markets seem to be confident the recovery has already begun. Secondary market yields are also at historic lows, while (in the U.S.) Treasury yields have finally started to rise from their record lows earlier in 2020 (see charts 7-8)

Similar to the experience of the financial crisis, corporate and Treasury yields quickly diverged in March once the virus became a pandemic with no known vaccine, nor news of any pending one. This is a typical "flight to safety." After the Fed announced its suite of liquidity programs in late March, confidence returned to corporate debt markets, and yields began falling. In recent months, falling corporate yields were joined by rising Treasury yields. If prior experience repeats itself, the gap between Treasuries and corporate bonds should stabilize with yields generally showing smaller changes, and with both moving more or less in parallel. Inflation expectations in the U.S.--as measured with yields on five-year Treasuries and TIPS--have recently risen past 2%. We feel it is unlikely that inflation will rise much beyond 2% this year, or for any protracted period. Certainly, not likely enough for the Fed to start raising interest rates. Meanwhile, five-year inflation expectations in Europe remain below 2% and consistent with their 2019 level of roughly 1.7%.

Despite continued caseloads resulting from newer, more contagious strains of the virus, and more economic lockdowns in Europe, the arrival of a vaccine likely signals relief is within reach. That said, the first quarter is starting off with challenges, but ultimately, normally functioning economies should slowly start to return, and issuance growth should stabilize toward a more modest but largely positive direction.

Issuance Projections

We expect global bond issuance to contract roughly 3.2% in 2021 (see chart 1). Levels of economic activity across most regions that are still below pre-pandemic levels, combined with difficult comparisons from last year for most sectors, will likely return bond issuance to its pre-2020 long-term compound annual growth rate of roughly 5%. That said, this would put 2021's total roughly 14% above 2019 in our base case.

We Expect Nonfinancial Issuance To Contract 4%-14% This Year

Global nonfinancial issuers saw impressive issuance totals in 2020, coming in at $3.3 trillion (up 35%). As a starting point, this presents a difficult total to match in 2021, and the use of this debt thus far is also an important consideration.

The extent to which issuers have fully tapped the market remains to be seen, though we estimate that a high proportion of the debt issued thus far in 2020 is being stored as cash, particularly for investment-grade companies in the U.S. and Europe. This, when combined with high percentages of both investment-grade and speculative-grade (rated 'BB+' or lower) bond issuance in 2020 that's being used for refinancing, shows that the need for additional funds is diminished. Similar observations appear in Europe as well, though somewhat more muted as refinance activity has come in strong, and currency and deposit balances have increased at their greatest pace (18%) to roughly €3.3 trillion through the first half of 2020.

During the first and second quarters of 2020, firms also employed new tactics with their debt usage and mix: by initially drawing down roughly $340 billion in revolvers in the U.S. and Europe, and (in the U.S.) letting commercial paper (CP) expire at maturity. Much of the revolver debt was estimated to be paid back from the proceeds of subsequent bond issuance, while expiring CP was believed to be replaced with longer-term debt. Since June, there has only been roughly $2 billion in revolver draws, and outstanding CP in the U.S. is rebounding after losing roughly $100 billion between March and September. It is likely that the substitution of these tools with long-term debt in 2020 was a limited boom to issuance, which will likely not repeat itself this year.

Still, financing conditions and market appetite remain quite favorable, with yields in primary and secondary markets hitting all-time lows at the end of 2020 in many sectors and areas. The global merger and acquisition (M&A) pipeline has rebounded markedly since last May; however, thus far the monthly totals for 2020 are averaging just under the typical monthly amounts in 2018 and 2019--suggesting (at this time) a return to normal levels of activity, rather than a boom (see chart 9). And with so much cash on hand, available funds for M&A may already exist, likely lowering reliance on future debt issuance somewhat. That said, with corporate yields so low and--in the case of the U.S. --Treasury yields rising alongside a growing expectation of an uptick in inflation this year, the early part of the year may see a glut of acquisition-based activity while financing conditions are still optimal. This should support more leveraged loan activity, though this is not included in our bond issuance projections.

Outside of the U.S. and Europe, issuance growth in 2020 was much more in line with prior years, so we expect less difficult comparisons acting as a challenge this year. For now, we still expect the largest non-U.S./European country--China--to see issuance increase in 2021 despite some tightening in financing conditions for most nonfinancial corporates. It is expected that authorities will encourage some macroprudential policies, including lowering leverage, particularly for the largest sector: real estate/homebuilders. But there's also a very large potential refinancing pipeline. Roughly $1.3 trillion of bonds have been issued that are coming due in 2021-2023, and the stock of outstanding corporate debt there has been rising by about 14% annually in the last few years. If consumer demand remains sluggish and the government targets GDP growth of around 8% for this year, loosening of some of these policies may be needed, which could prompt more new debt.

Financial Issuance Could Increase Modestly In 2021

Global financial services also saw a boost to issuance in 2020, making for a difficult act to follow this year. Upside potential largely stems from issuance outside of the U.S. and Europe, which could push the global total up between 0% and 6%.

Excess reserves U.S. banks hold with the Fed increased substantially in 2020, and this has tended to be a leading indicator of bank issuance. U.S. financial services companies reached $616 billion in issuance this year, which was generally the same pace as the increase in excess reserves. In the latter part of the year, reserves have declined, and plateaued. If this trend continues, this could imply flat to small issuance growth for next year, particularly after such a strong total in 2020.

In Europe, the European Central Bank's (ECB) third round of targeted longer-term refinancing operations (TLTROs) are expected to cut into bond issuance by banks in the region. In the ECB's December meeting, the timeframe for these loans was extended to mid-2022, and the effective carry-trade that exists by taking out these loans for -100 basis points (bps) and storing the proceeds as deposits with the ECB at -50 bps still exists. Prior rounds of TLTROs were largely considered less effective than perhaps desired, or only needed by countries with weaker credit profiles. We feel that this third round of loans will not carry the same level of stigma and be attractive to a wider swath of European banks.

The potential for market volatility this year remains high despite some positive (or concluded) news in the fourth quarter. A hard Brexit was avoided; however, little has been settled with certainty. The U.S. election has concluded, with all avenues for legal challenges in the past. But other stressors remain, such as delayed deployment of COVID-19 vaccines and new variations of the disease, which are proving to be particularly contagious. It is our assumption that most countries will see widespread vaccination by midyear, which should help calm markets.

Issuance growth from China has been very strong in recent years, with roughly $200 billion in increases in both 2019 and 2020. This equates to 46% and 33% annual growth rates for 2019 and 2020, respectively. A healthy refinancing pipeline exists, too, with over $1.26 trillion of bonds due 2021-2023, which should support issuance in 2021. 2020 marked the first year in which China accounted for the largest proportion of global financial services issuance (29.7%), just surpassing Europe.

Global Structured Finance Issuance Likely To See Modest Growth In 2021

As the major outlier in 2020, global structured finance saw a 25% decrease to $895 billion. However, despite the full-year global total coming in under $1 trillion for the first time since 2016, levels are still in line with pre-2017 figures. Looking ahead, we expect issuance to increase modestly, between 0% and 5%.

We expect the U.S. to account for the majority of any rise in global volume in 2021. The asset-backed securities (ABS) sector is poised for growth in the coming year across most subsectors. We expect the auto loan ABS sector to increase given our projection for U.S. light vehicle sales to rise 10%-15% by year end. The student loan ABS sector was one of the only subsectors to report an increase in issuance in 2020, with additional volume to come to market in 2021 mainly from private student loans, a departure from commonly seen Federal Family Education Loan Program (FFELP) issuance is recent years. Credit card ABS issuance, which experienced one of the most significant declines of 2020, will likely continue to contract due to the relative all-in cost of funds in 2021.

U.S. residential mortgaged-backed securities (RMBS) are poised to be a vital component of U.S. structured finance volume in 2021, strengthened by extensions to mortgage forbearance deadline extensions, a historically low interest rate environment, and increased demand for home sales as urban flight continues. U.S. collateralized loan obligations (CLOs), began to witness a spike in issuance in the final stretch of 2020, reversing course from a muted first half of the year. Conditions are becoming increasingly favorable for the sector, leaving a sustainable environment for further growth in 2021. Commercial mortgage-backed securities (CMBS) experienced the harshest impacts from COVID-19-related lockdown measures throughout 2020, pushing issuance to its lowest level in almost a decade. We expect new volume to come in at a similar level in 2021, with some room for upside. The exodus of many urbanites to suburban community leaves uncertainty around the multifamily sector. We expect the lodging sector to take several years to return to any form of normalcy.

In Europe, we expect 2021 structured finance issuance levels to remain in line with 2020, with risk to the downside. While 2020 was a strong year for Europe in terms of the originations of securitizations, revived after implementations of the Simple, Transparent, and Standardized (STS) regulations became widely accepted by the market, levels will likely be little changed in 2021. The vast monetary response in the regions due to the pandemic is likely to suppress demand for both securitizations and covered bonds.

Outside the U.S. and Europe, structured finance issuance has declined 36% year over year. All regions, except Japan recorded double-digit declines. Japan was able to issue volumes similar to previous years, while Australia saw a 37% drop in new volume in 2020. Both countries account for the majority of volume outside the U.S. and Europe. In 2021, we expect new issuance to remain largely unchanged from 2020. In Japan, both the ABS and RMBS sectors are expected to issue at roughly the same pace as 2020. As for Australia, which is also a primarily ABS and RMBS market, we expect issuance to remain little changed in 2021 but highly resilient in the face of low interest rates and fiscal stimulus.

U.S. Public Finance Issuance Is Set To Decline This Year From An All-Time High, With Higher Odds Of More Direct Help

We forecast that issuance for 2021 as a whole will come in around $450 billion, or about a 5% decrease from 2020's all-time high of $474 billion. This sector will be affected by the unified Democratic control of both houses of Congress and the White House, as direct aid to states is more likely than would have been in the case of divided government. The incoming administration proposed an initial $1.9 trillion COVID-19 relief package, including roughly $350 billion in aid to states and localities. Uncertainty remains with regards to how long until the prevalence of vaccinations begins to bring down new cases and allows economic activity to resume.

International Public Finance Is Likely To Contract As Much As 10%

International public finance volume finished 2020 at over $1 trillion for the first time. With the need for fiscal support still strong in many regions, we expect reliance on the public sector and banking systems to continue in 2021, leading to a strong annual total of just under $1 trillion in new issuance. This sector is dominated by issuance out of China, and we expect there will be some efforts by the authorities to control leverage, which could cause a contraction in issuance there. If immediate funding needs wane, a weaker pipeline of maturing debt, globally, might also suppress issuance totals relative to this year.

Global bond issuance in 2020 totaled $8.3 trillion, up 18.2% relative to 2019. Most sectors reached new annual highs, led by nonfinancial corporates, which rose 35.1%, to $3.3 trillion. This is nearly a full trillion dollars more than the prior high set in 2019. Financial services issuance expanded 16.6% to $2.6 trillion. U.S. public finance reached a new record of $474 billion, and international public finance saw the greatest increase--rising 38% to break the $1 trillion mark for the first time. The lone laggard--structured finance--declined 25% as the global recession weighed heavily on real-estate-related sectors and leveraged loans declined, resulting in lower CLO issuance.

These figures include only long-term debt (maturities greater than one year) and exclude debt issued by supranational organizations. All references to investment-grade and speculative-grade debt refer to issues rated by S&P Global Ratings.

U.S. Financing Conditions End 2020 Near Most Favorable In History

Despite the pandemic showing new, highly contagious variants of the virus, financing conditions in the U.S. continue their push towards historically supportive levels (see table 2). With the uncertainty of the general election behind, a $900 billion stimulus bill in hand, and the higher potential for yet more stimulus ($1.9 trillion proposed), markets remain optimistic. So much so, that for the first time since last March, the 10-year Treasury yield has exceeded 1%. More tellingly, five-year inflation expectations as measured via Treasury and TIPS yields have also pushed past 2% after falling below that point for the better part of the last five years. This could pose a headwind for financing conditions later this year if inflation does indeed start to pick up; however, it is unlikely that inflation will pierce 2% or remain comparably elevated for an extended period.

Borrowing costs have fallen across all levels of credit quality, with secondary corporate yields reaching all-time lows at year-end from the 'BBB' category to 'B'. Volatile commercial paper yields are once again stable and near zero. Distressed debt in the high-yield bond and leveraged loan segments are back to pre-pandemic lows, while covenants on leveraged loans remain few.

Table 3

Indicators Of Financing Conditions: U.S.
	Restrictive	Neutral	Supportive	2020	2019	2018
M1 Money Supply (% change, YoY)			x	64.6	6.0	4.0
M2 Money Supply (% change, YoY)			x	24.4	6.4	4.2
Triparty repo market--size of collateral base (bil. $)§			x	2,361.3	2,381.9	2,128.3
Bank reserve balances maintained with Federal Reserve (bil. $)			x	3,134.9	1,698.3	1,759.9
Three-month nonfinancial commercial paper yields (%)			x	0.1	1.7	2.6
Three-month financial commercial paper yields (%)			x	0.2	1.8	2.7
10-year Treasury yields (%)			x	0.9	1.9	2.7
Yield curve (10-year minus three month) (bps)		x		84.0	37.0	24.0
Yield-to-maturity of new corporate issues rated 'BBB' (%)			x	2.7	3.3	4.7
Yield-to-maturity of new corporate issues rated 'B' (%)			x	7.0	6.7
10-year 'BBB' rated secondary market industrial yields (%)			x	2.3	3.4	4.8
Five-year 'B' rated secondary market industrial yields (%)		x		5.2	6.6	8.7
10-year investment-grade corporate spreads (bps)			x	115.1	121.2	172.6
Five-year speculative-grade corporate spreads (bps)		x		434.4	399.7	481.9
Underpriced speculative-grade corporate bond tranches, 12-month average (%)			x	8.0	13.6	17.4
Fed lending survey for large and midsize firms¶	x			37.7	5.4	(15.9)
S&P Global Ratings corporate bond distress ratio (%)			x	5.0	7.5	8.7
S&P LSTA Index Distress Ratio (%)			x	4.4	5.7	3.3
New-issue first-lien covenant-lite loan volume (% of total, rolling three-month average)			x	86.5	92.6	68.0
New issue first-lien spreads (pro rata)		x		400.0		323.3
New issue first-lien spreads (institutional)		x		431.0	278.0	452.1
S&P 500 market capitalization (% change, YoY)			x	18.3	27.3	(7.9)
Interest burden (%)*			x	7.3	7.7	8.0
Data through Dec. 31. ¶Federal Reserve Senior Loan Officer Opinion Survey on Bank Lending Practices For Large And Medium-Sized Firms through third-quarter 2020. *As of Sept. 30, 2020. Sources: IHS Global Insight, Federal Reserve Bank of New York, S&P LCD, and S&P Global Ratings Research.

Record-Breaking U.S. Corporate Issuance Amid Historic Recession

Rated U.S. corporate issuance for full-year 2020 reached a record $1.8 trillion, 34% higher than the previous annual record set in 2017. This came as extraordinary monetary policy from the Federal Reserve revived primary market activity in late March after it nearly came to a halt amid the 2020 pandemic-induced recession.

Issuance peaked in the first half of the year, with back-to-back record-breaking monthly issuance totals of $246.5 billion and $276.3 in March and April, respectively, followed by another $247.2 billion of issuance in May. A comparison of the issuance totals from March-May to the previous monthly record of $176 billion set in May 2016 emphasizes the effectiveness of central bank polices at loosening financing conditions during this downturn. After an incredible start to the year, issuance slowed and ended the year with $245 billion in the fourth quarter.

Investment-grade corporate issuance for the full year totaled $1.4 trillion, 32% higher than the previous annual record set in 2017. Issuance fell in the fourth quarter to $172.9 billion, the second consecutive drop after the record-setting second quarter.

Speculative-grade issuance for the full year totaled $346.5 billion, 20% higher than the previous annual record set in 2012. Issuance was strong in every rating category for the full year, with nearly 60% of issuance in the 'BB' category. Issuance fell in in the fourth quarter to $72.1 billion, the second consecutive drop after its own record-setting second quarter.

Nonfinancial issuance for the full year totaled $1.2 trillion, 49% higher than the previous annual record set in 2017. Issuance in the high technology, consumer products, and health care sectors accounted for over one-third of all nonfinancial issuance for the full year, with $176.9 billion, $124.9 billion, and $122.5 billion, respectively. Financial corporate rated bond issuance totaled $540.8 billion for the full year, the most since 2007.

Verizon Communications Inc. topped the list of issuers in the fourth quarter (see table 3). Verizon issued a two-part senior unsecured note offering that totaled $1.5 billion on Oct. 30 and a five-part senior unsecured note offering that totaled $12 billion on Nov. 10. Most of the proceeds are expected to be used for general purposes. The outlook on Verizon is positive.

Table 4

Largest U.S. Corporate Bond Issuers: Fourth-Quarter 2020
	Sector	Mil. $
Verizon Communications Inc.	Telecommunications	13,504.8
Morgan Stanley	Banks and brokers	10,075.7
Bank of America Corp.	Banks and brokers	8,500.0
Bristol-Myers Squibb Co.	Health care	6,989.7
JPMorgan Chase & Co.	Banks and brokers	5,750.0
Ford Motor Credit Co.	Financial institution	5,035.5
Goldman Sachs Group Inc.	Banks and brokers	5,000.0
Boeing Co.	Aerospace and defense	4,896.4
T-Mobile US Inc.	Telecommunications	4,671.8
Volkswagen Group	Banks and brokers	3,993.7
Lowe's Cos. Inc.	Retail/Restaurants	3,992.8
Lyb International Finance Iii	Banks and brokers	3,885.6
Frontier Communications Corp.	Telecommunications	3,700.0
Toyota Motor Credit Corp.	Financial institution	3,399.9
Charter Communications	Media and entertainment	3,001.4
Includes issuance from Bermuda and the Cayman Islands. Sources: Refinitiv and S&P Global Ratings Research.

U.S. Leveraged Loans Start And End 2020 With Strong Totals

U.S. leveraged loan issuance finished a tumultuous 2020 on a strong note against the backdrop of a broad rally in risk markets fueled by optimism around COVID-19 vaccine developments. Fourth-quarter issuance of institutional loans, the type of debt bought by collateralized loan obligations, was $80.5 billion, the highest reading since the first quarter of the year and a 9% increase from the third quarter. It is also 10% higher than the fourth quarter of 2019. In fact, after cratering to a four-year low in the second quarter, due to the initial shock of the spreading pandemic, loan issuance gathered steam through the summer, and by the third and fourth quarters, issuance totals were in the area of 2019's quarterly average of $77.5 billion, according to LCD.

Loans supporting buyouts and acquisitions drove the fourth-quarter tally as they surged 49% from the third quarter to $43.8 billion. Leveraged buyout (LBO) deals, in particular, had a strong showing, with a 103% quarter-over-quarter rise to $23.4 billion. That also marks the heaviest deal flow backing buyouts since the third quarter of 2019. New buyout deals had nearly dried up amid the economic uncertainty that gripped markets through the second quarter and into the third quarter, but private equity firms clearly have grown more confident since then.

Even as M&A issuance was gaining pace, sponsored issuers continued to tap into demand with opportunistic deals. It was another strong quarter for total dividend recapitalizations, at $17.5 billion, versus the $15.7 billion for the third quarter, and accounting for 22% of total volume, according to LCD. Dividend recaps for sponsored borrowers totaled $12.8 billion in the fourth quarter, down slightly from $13.4 billion in the third quarter. Combined sponsored recap volume over the two quarters was the highest since the last quarter of 2016 and the first quarter of 2017.

The resurgent primary market was supported by gathering strength in CLOs, which buy most of the newly issued loans. New-issue volume in the CLO market was $92.1 billion in 2020, well short of 2019's $118.3 billion but a respectable total given the year's particular challenges. The CLO market picked up strength in the fourth quarter, boding well for 2021. CLO issuance more than offset the nagging outflows from retail loan funds, which totaled $19 billion in 2020, according to Lipper.

That growing CLO appetite for institutional loans spurred a prolonged rally in the secondary market and helped new issue pricing ratchet lower from the lofty levels recorded through the second quarter. New-issue price flexes favored issuers--the ratio of downward to upward flexes was 13.5:1 in the third quarter and 2.8:1 in the fourth quarter, versus an average of 2.3:1 in 2019. Looking at the data on a monthly basis, borrower-friendly flexes nearly matched investor-friendly flexes in October, and the dynamic shifted in favor of the issuers, or borrowers, after the major vaccine news in November. The ratio of downward to upward flexes surged to 17.5:1 in December.

As of Dec. 24, the average spread for new institutional loans from issuers rated 'B/B+' was L+414 and upfront fees (amortized over three years) narrowed to 31 bps after they had ballooned to 123 bps in May.

Market participants are looking at 2021 with optimism, and for a potential rebound in primary market issuance. Central to the outlook is further economic recovery and COVID-19 vaccine distribution, but uncertainties from the pandemic pose a risk to the rosier viewpoint. Market prognosticators have made the case that overall issuance will rebound, driven by resurgent M&A dealmaking. Both overall and M&A issuance would be building off multiyear lows, and private equity-backed firms certainly seem inclined to oblige, as the late 2020 flurry of deals indicate.

U.S. public finance climbs higher

U.S. municipal bond issuance in the fourth quarter was $123 billion, down from $143 billion in the third quarter and lower than the $146 billion in the fourth quarter of 2019. The issuance amount in October was $72 billion, the highest in our records, and the drop to $20 billion for November is the largest month-over-month change in our records. Issuance for the full year was $474 billion, up from $426 billion, or an 11% increase year over year.

Breaking out issuance into components, new money issuance has fallen as a percentage of all issuance, down to 56%, compared to 62% last year. Refunding has seen an increase in terms of percentages, up to 31% from 26% last year, while mixed used issuance was 12% in 2020, the same percentage as 2019.

While issuance was lower than average in December, there were several large individual issues, with the top three all located in the tristate area (see table 4), led by Empire State Development Corp., with just over $2 billion, and two $1.5 billion issues for New Jersey Transit and New York's general obligation debt.

Table 5

Largest U.S. Municipal Issues: December 2020
	Mil. $	Date
Empire State Development Corp.	2,086.4	12/15/2020
New Jersey Trans Trust Fund Au	1,500.0	12/2/2020
New York City-New York	1,500.0	12/17/2020
Puerto Rico Aqueduct & Sewer Auth	1,370.1	12/11/2020
Connecticut (State), GOs	800.0	12/16/2020
New York Transportation Dev Corp.	610.8	12/9/2020
NYC Municipal Water Fin Auth	534.4	12/3/2020
Miami-Dade Co-Florida	506.5	12/10/2020
Illinois State Toll Highway Auth	500.0	12/1/2020
Illinois Finance Authority	500.0	12/15/2020
Source: Refinitiv; S&P Global Ratings Research.

For the full year, California issued the most debt, with $69.2 billion, up 13.7% compared to last year. New York is second, with $59.2 billion, up 33.7% compared to last year (see table 5).

Table 6

Top 10 States By Bond Sales, 2020
	--2020--		--2019--
	Rank	Volume (Mil.)	Rank	Volume (Mil.)	Change from previous year (%)
California	1	69,229.7	1	60,869.0	13.7
New York	2	59,150.3	3	44,257.4	33.7
Texas	3	53,636.6	2	45,715.2	17.3
Florida	4	20,639.2	4	22,169.4	(6.9)
Pennsylvania	5	17,773.0	7	12,766.4	39.2
Massachusetts	6	17,430.2	5	18,036.3	(3.4)
Colorado	7	14,956.3	6	13,873.6	7.8
Ohio	8	13,791.6	11	10,889.9	26.6
New Jersey	9	12,735.2	9	11,851.0	7.5
Georgia	10	12,171.5	13	9,200.5	32.3
Sources: Refinitiv and S&P Global Ratings Research.

U.S. Structured finance issuance ends 2020 down just 10% following a roller coaster year

U.S. structured finance issuance ended 2020 at $451 billion, down 22% from the year prior. After falling in response to the initial outbreak of the coronavirus in the U.S. in March, new issuance slowly picked up again at the start of May, following combined stimulus through the CARES Act, the Fed cutting yields back to zero, and the reemergence of many asset purchase programs utilized in the global financial crisis.

Such a recipe of stimulus allowed for a diminishing gap in new origination levels in the third quarter of 2020. Structured finance volume, down 27% in the second quarter of 2020, was down just 20% in the third quarter. However, despite measures to buoy issuance, each U.S. sector ended the year with double-digit declines in volume.

U.S. ABS fell 17% in 2020 to $168 billion, accounting for more than a quarter of overall issuance in the U.S. throughout the year. Despite this, 2020 marks the lowest annual volume for ABS since 2013. Despite a slight decline of 9% annually in the auto ABS subasset class, the space remained relatively resilient in boosting overall issuance for ABS as whole. The esoteric ABS space, which accounts for a substantial portion of the overall ABS total, declined 32% in 2020. The hardest hit subasset class within ABS was the credit card space, which declined overall by 86% by year end.

New issue CLO volume fell 19% in 2020, totaling $91.5 billion. In a reversal from the first half of the year, when volume was down 38% on the year, the second half of the year saw monthly issuance volumes tick upward to narrow the gap. Throughout 2020, expectations were to the downside for new originations, against a backdrop of declining leverage loan volume. However, as spreads began to tighten in final hours of 2020, against a backdrop of pend up demand, the volume of new origins began to pick up, a phenomenon that is set to persist in the opening months of 2021.

RMBS originations totaled $95 billion in 2020. Although the figure marks a 16% annual decline, issuance for the sector remains well above pre-2019 levels. Following an above-average first quarter of the year, the sector was not immune to sharp drop in issuance in April and May. In June, new issuance came back to market, spurred by urban flight to areas of decreased population density--a phenomenon further exacerbated by the Fed slashing interest rates in response to the pandemic. The majority of RMBS issuance in 2020 consisted of prime originations and a diverse array of collateral including credit risk transfers (CRT), servicer advances, and nonperforming loans. Persistent demand for new and existing home sales is expected to remain in play in 2021, keeping the pace of new originations. As home sales are a leading indicator of RMBS issuance, we expect the sector to experience hardship in the face of supply if home sales fall once again.

The U.S. CMBS sector took the hardest hit in issuance this year, down 41% to just $51.7 billion, the lowest since 2012. Despite an outstanding first quarter for U.S. CMBS issuance, the sector was hardest hit by the impact of pandemic lockdown measures across the U.S. in the middle of March. As social-distancing measures persisted throughout the remainder of 2020, many commercial areas became closed to the public and many Americans adjusted to remote working. We expect CMBS issuance to remain much the same in the opening months of 2021.

Financing Conditions In Europe End The Year Broadly Favorable

Financing conditions in Europe continued to improve from favorable third-quarter readings to finish the year with yields having fallen to multiyear lows, particularly for investment-grade corporate bonds (see table 6). Though still above the levels at the start of 2020, high-yield spreads continue to fall, particularly after the U.S. general election in November. One notable outlier remains the ECB's senior loan officer survey, which is still showing net tightening of standards for firms. Generally, lending standards came in tighter for small and midsize firms, at least relative to larger ones. Somewhat in contrast to this, the proportion of leveraged loans that are covenant-lite remains above 90% of the total issued in the last three months. Spreads on leveraged loans have remained stable, if moderately higher than all-time lows, while distressed credits remain very rare.

The ECB met again in December and further expanded the Pandemic Emergency Purchase Programme by an additional €500 billion and extended it another nine months through March 2022. Additionally, the ECB's TLTRO III program was also extended by 12 months, through June 2022, with the ECB making three new offers this year. These loans still allow for a carry trade if the funds are parked with the ECB as deposits. EU members also resolved disputes over a €1.8 trillion fiscal package, adding to the tremendous amount of monetary support for the region to weather the pandemic. Smaller and midsize firms have benefited from state-backed loan programs in many European countries as well, all supporting broad-based market liquidity.

In contrast to the U.S., inflation expectations in Europe remain muted. Current five-year inflation expectations as measured by the ECB's survey of professional forecasters are still only registering at 1.7%--effectively unchanged since early 2019. Also offering some further assistance to the region, the U.K. and EU agreed in late December to a provisional post-Brexit trade agreement, which would avoid billions in tariffs.

Table 7

Indicators Of Financing Conditions: Europe
	Restrictive	Neutral	Supportive	2020	2019	2018
M1 Money Supply (% change, YoY*)			x	13.6	8.4	6.8
M2 Money Supply (% change, YoY*)			x	10.1	6.1	4.4
ECB Lending Survey of Large Companies¶	x			16.2	0.4	(5.1)
Yield-to-maturity of new corporate issues rated 'A' (%)			x	0.7	1.5	1.5
Yield-to-maturity of new corporate issues rated 'B' (%)			x	6.8	5.2
European high-yield option-adjusted spread (%)**			x	3.6	3.1	5.1
Underpriced speculative-grade corporate bond tranches, 12-month average (%)		x		28.4	20.6	29.9
Major govt interest rates on 10-year debt			x
S&P LCD European Leveraged Loan Index Distress Ratio %			x	2.6	2.9	2.8
Rolling-three-month average of all new issue spreads: RC/TLA, (Euribor +, bps)		x		345.8	337.5	293.3
Rolling-three-month average of all new issue spreads: TLB/TLC, (Euribor +, bps)		x		402.8	371.7	375.8
Cov-lite institutional volume: share of institutional debt (%, rolling-three-month average)			x	95.3	93.7	61.7
Data through Dec. 31. *Through Nov. 30. ¶European Central Bank Euro Area Bank Lending Survey for Large Firms, fourth-quarter 2020. **Federal Reserve Bank of St. Louis. Source: IHS Global Insight; ECB; S&P LCD; S&P Global Ratings Research.

Full-year corporate bond issuance in Europe reaches highest level since 2009

Rated corporate issuance in Europe for full-year 2020 totaled €882.7 billion, the second highest level on record after the €943.8 billion issued in 2009. Issuance out of Europe fell in the fourth quarter to €144.3 billion, the second consecutive drop after the record-setting second quarter.

Investment-grade corporate issuance for the full year totaled €737.1 billion, the highest level since 2016. Issuance fell in the fourth quarter to €103.5 billion, the second consecutive drop after strong issuance in the second quarter.

Speculative-grade issuance for the full year totaled €145.6 billion, the second-highest level on record after the €154.1 billion issued in 2017. Issuance was strong in every rating category for the full year, with two-thirds of issuance in the 'BB' category. Issuance increased in the fourth quarter to €40.8 billion, the third consecutive quarterly increase.

Nonfinancial issuance for the full year reached a record €384.9 billion, 17% higher than the previous annual record set in 2019. Issuance in the oil and gas, utility, and consumer products sectors accounted for one-third of all nonfinancial issuance for the full year, with €50.9 billion, €42.4 billion, and €33.4 billion, respectively. Financial corporate rated bond issuance totaled $497.8 billion for the full year, just below the total from 2019.

European Financial Stability Facility topped the list of issuers in the fourth quarter (see table 7). EFSF issued a two-part senior unsecured note offering that totaled €4.2 billion on Oct. 6 and a senior unsecured note offering that totaled €1.1 billion on Nov. 9.

Table 8

Largest European Corporate Bond Issuers: Fourth-Quarter 2020
Issuer	Country	Sector	Mil. €
EFSF	Luxembourg	Financial institutions	5,303.2
Societe Generale SA	France	Banks and brokers	3,914.9
HSBC Holdings PLC	U.K.	Banks and brokers	3,683.6
Project Galaxy	Jersey	Financial institutions	3,380.7
Banque Federative Du Credit	France	Banks and brokers	3,341.9
BNP Paribas SA	France	Banks and brokers	3,042.6
Iberdrola International BV	Netherlands	Utility	3,002.3
Eni SpA	Italy	Oil and gas	2,975.6
Standard Chartered PLC	U.K.	Banks and brokers	2,330.3
Allianz SE	Germany	Insurance	2,309.4
Banco Santander SA	Spain	Banks and brokers	2,250.3
Rolls-Royce PLC	U.K.	Capital goods	2,204.3
Veolia Environnement SA	France	Utility	2,187.7
Gaz Finance PLC	U.K.	Financial institutions	2,184.1
URW	France	Homebuilders/Real estate co.	1,993.6
Sources: Refinitiv and S&P Global Ratings Research.

European leveraged loans remain resilient despite a challenging year

As the fourth quarter drew to a close in Europe, the resilience of the leveraged loan market was clear. Although total volume in Europe was down 20% in 2020 from 2019's tally, demand for the loan asset class had resumed to such an extent by year end that pricing levels in the secondary market were nearly back to their January 2020 highs, there was an improving inventory of new issuance in the pipeline, and primary pricing had returned almost to pre-pandemic levels.

The current state of the European loan market is one that most would not have expected at the end of March 2020, when the S&P European Leveraged Loan Index (ELLI) fell off a cliff, bottoming out at 78.92 on March 24, while new loan issuance ground to a halt. By Dec. 31, the ELLI had returned to 97.60, only a little over a point off its yearly high of 98.66 at the end of January. "The market has been through a walloping, then a sharp recovery, and then we ended the year where we began," said one syndicate manager.

Total European primary loan issuance fell sharply in the second quarter of 2020 to €11.7 billion, from €26 billion in first-quarter 2020, according to LCD, and rebounded to €16.5 billion in the third quarter--however, that recovery was largely due to an increase in pro rata issuance. The fourth quarter hosted only €10.6 billion of issuance.

The new-issue loan market in 2020 suffered from a lack of new buyouts as many auction processes stalled amid the uncertainty created by the COVID-19 pandemic. The share of institutional loans backing buyouts in 2020 was down 21% compared to 2019. However, the spike in primary pricing during the secondary market sell-off in March also squelched opportunistic activity in the form of refinancings and dividend recaps. This type of loan issuance from leveraged corporates was down even further over the year, running 36% behind 2019.

While European loan issuance in 2020 was lower than in 2019, investor demand recovered strongly, especially in the latter part of the year. For example, issuance in the European CLO market--which is the predominant investor segment in leveraged loans--shot back up during fourth-quarter 2020, to €7.4 billion of supply from 22 deals, which was 61% ahead of the third quarter and very close to the €7.7 billion raised in fourth-quarter 2019 before the pandemic struck. Looking at full-year 2020, total CLO issuance was still 26% behind the prior year, though 2019 was a record year for European CLO issuance in the CLO 2.0 era.

The resilience of the leveraged loan asset class for investors--and their ability to raise capital at favorable terms--has resulted in a supply/demand imbalance. December had a rolling-three-month supply shortage of roughly €1.2 billion. The measure has consistently showed a shortage since June 2020.

Indeed, this supply-demand imbalance has resulted in spreads and yields compressing since the end of third-quarter 2020. In the three months to the end of December, spreads tightened to an average of 408.9 bps over Euribor, from 429.2 bps at the end of third-quarter 2020 for all 'B' rated euro-denominated term loan Bs, according to LCD. Meanwhile, the average yield to maturity fell to 4.39% in the rolling three months to the end of December, from 4.74% at the end of third-quarter 2020.

In the final phase of 2020, opportunistic transactions began to appear in the form of repricings. Among these, Groupe CEP--which completed the first post-pandemic syndicated European leveraged loan in May--has come back to market already. Euroports Holdings, also in December, completed a €315 million term loan repricing and a €50 million add-on. Indeed, the European loan market saw a late-year surge of add-on deals as borrowers sought to take advantage of investor demand.

Looking ahead to supply in early 2021, market participants are optimistic that new primary deal flow will be strong in January. "There will be increased private-equity activity because these players have so much dry powder and need to act quickly because valuations are rapidly escaping from them," said one CLO investor. Another source added that for private equity, enterprise values may be high, but yield on debt is low: "For a long time, there have been fears about a lack of new primary flow, but that has not proven to be true."

Although many market participants were positive at year end that the market has proven resilient, there are still many unknowns, including wither companies that have taken on additional liquidity will be left with unsustainable capital structures in a few years and will need their balance sheets refinanced. And some market players have cautioned that the worst is yet to come for companies in Europe, with the GDP impact from the pandemic to be felt in the first and second quarters of 2021. This could lead to more differentiation in credit, as opposed to the one-way trading seen in Europe for the latter part of 2020. There are also structural issues in certain sectors that have been disrupted, as well as the unknown impact of how governmental stimulus from the pandemic is unwound.

2020 Covered Bond Losses Cut Securitization Gains

European structured finance issuance for 2020 was $303 billion, a 21% loss over the year and the lowest since 2017. The underlying story depicts a steady rise of securitizations against a backdrop of depleting covered bond originations. Securitizations as a whole in Europe totaled $163 billion, up 12% on the year. Covered bonds fell 41% in 2020 to a total of $140 billion, the lowest in the past eight years.

The outset of 2020 for structured finance issuance in Europe saw securitization issuance rising as the market adjusted to the EU Securitization Regulation implemented at the outset of 2019. The deceleration in issuance in March 2020 in light of reactions to COVID-19 occurred in Europe as well. However, so did the rise in third quarter.

CLO issuance declined 40% in 2020 to $21 billion, bringing an end to four consecutive years of annual gains. Primary issuance has been coming from pre-COVID-19 warehouses, however, with little supply becoming a growing concern for investors. The drop in CLO demand is further exacerbated by widening spreads, even at the 'AAA' rated CLO level. Additionally, deals are backed by speculative-grade corporate credit, which may be the most-affected financial market.

ABS issuance 14% in 2020 across Europe to total $47 billion. Originations out of Spain, Italy, and France were responsible for the majority of gains in the year. The bulk of ABS collateral in Europe is auto related, while also spanning a variety of credit card and consumer-related collateral. The sector is also the least likely to face a severe downturn in overall issuance because many ABS subsectors will likely be the first to see an uptick in demand and are partially supported by quantitative easing.

The European RMBS market came in at $63 billion in 2020, marking the fourth consecutive year of annual gains. However, noticeably, RMBS originations out of the U.K. fell 34% on the year, falling to the lowest level since 2014. It was Spain and Italy that were responsible for the majority of gains in 2020. The European RMBS market has greater exposure to increasing unemployment rates and implications of payment holidays across the region. However, when payment holiday compensation runs out and parts of the workforce cannot find other means of income, delinquencies will likely rise. Because more than half of European RMBS is bank-originated, there will be a negative supply effect in light of relaunched central bank funding options. Subsequently, the portion of nonbank issuance that is backed by more esoteric collateral is unlikely to return while spreads remain dislocated, especially since they are often backed by lower-quality collateral. However, there's some scope for retained transactions to act as central bank collateral.

Issuance in the CMBS sector in Europe was $2 billion in t 2020, compared with $5 billion in 2019. Looking ahead, just as in the U.S., supply is always subject to volatility based on the relative economics of CMBS versus other forms of real estate debt funding. As stay-at-home orders continue to negatively affect the lodging and retail sectors, we expect issuance to decline throughout the year.

In terms of covered bonds, issuance totaled just $138 billion in 2020, a decline of 42% from the same period last year.

Domestic Chinese Issuance Dominates Emerging Market Total

Credit spreads in all emerging market regions continued to tighten in the fourth quarter and finished the year near their respective 2019 year-end levels. Supportive monetary policy actions by the Federal Reserve have helped lower the value of the U.S. dollar relative to emerging market currencies and bolstered dollar-denominated bond issuance (excluding China). Dollar-denominated corporate issuance for full-year 2020 reached a record $260.1 billion, 13% higher than the previous annual record set in 2019. Emerging Asia (excluding China) led all emerging market regions with a record $152.8 billion of dollar-denominated issuance for the full year, 24% higher than the record set in 2019. Latin American dollar-denominated issuance grew 10% year-over-year and Eastern Europe, Middle East, and Africa (EEMEA) contracted 10%.

Rated emerging market corporate bond issuance for full-year 2020 reached a record $208.1 billion, 5% higher than the record set in 2014. Investment-grade corporate issuance for the full year reached a record $155.7 billion, 7% higher than the record set in 2012, and speculative-grade issuance for the full year totaled $52.4 billion, 11% below the record set in 2019. Issuance was strong in the 'BB' and 'B' rating categories for the full year (there was no issuance in the 'CCC/C' category), with over 60% of speculative-grade issuance in the 'BB' category.

Most corporate bond issuance in emerging markets continues to be unrated. In 2020, nearly 90% of issuance was unrated by S&P Global Ratings and nearly three-fourths of issuance was unrated debt from China.

All emerging market corporate bond issuance for the full year reached a record $1.9 trillion, 18% higher than the record set in 2019. China led all regions with 24% issuance growth year-over-year. Emerging Asia (excluding China) issuance was 5% higher, Latin America issuance contracted 4%, and EEMEA issuance contracted 5%.

China Development Bank Corp. topped the list of issuers in the fourth quarter (see tables 8-9). China Development Bank Corp. issued a three-part senior unsecured note offering that totaled $3 billion on Oct. 19 and a two-part senior unsecured note offering that totaled $1 billion on Nov. 19.

Table 9

Largest Emerging Markets Corporate Bond Issuers: Fourth-Quarter 2020 Rated Issuance
	Country	Sector	Mil. $
China Development Bank Corp.	China	Banks and brokers	3,949.1
Deutsche Bank SA	Brazil	Banks and brokers	3,529.6
Meituan	China	High technology	1,997.4
Airport Authority Hong Kong	Hong Kong	Transportation	1,577.4
PEMEX	Mexico	Oil and gas	1,495.3
Foxconn (Far East) Ltd.	Taiwan	Banks and brokers	1,396.0
United Overseas Bank Ltd.	Singapore	Banks and brokers	1,207.3
Lenovo Group Ltd.	Hong Kong	High technology	1,000.0
Korea Development Bank	South Korea	Banks and brokers	997.4
Amipeace Ltd.	Hong Kong	Banks and brokers	896.4
Agricultural Dvlp Bk Of China	China	Banks and brokers	853.9
Wynn Macau Ltd.	Macau	Media and entertainment	772.5
Joy Treasure Asts Hldg Inc.	Hong Kong	Banks and brokers	745.9
Fortune Star(BVI) Ltd.	Hong Kong	Financial institutions	707.0
Bank of East Asia Ltd.	Hong Kong	Banks and brokers	650.0
Sources: Refinitiv and S&P Global Ratings Research.

Table 10

Largest Emerging Markets Corporate Bond Issuers: All Fourth-Quarter 2020 Issuance
	Country	Sector	Mil. $
China Development Bank Corp.	China	Banks and brokers	16,402.6
Bank of Communications Co Ltd.	China	Banks and brokers	8,835.0
Saudi Arabian Oil Co.	Saudi Arabia	Oil and gas	7,939.1
Bank Of China Ltd.	China	Banks and brokers	7,597.9
Shanghai Pudong Dvlp Bk	China	Banks and brokers	7,595.3
China State Railway Grp Co.	China	Transportation	6,150.6
Ind & Coml Bk of China Ltd.	China	Banks and brokers	6,035.0
Hua Xia Bank Co Ltd.	China	Banks and brokers	5,042.4
China Guangfa Bank	China	Banks and brokers	5,006.1
Daqin Railway Co Ltd.	China	Transportation	4,890.3
Industrial Bank Co Ltd.	China	Banks and brokers	4,482.1
State Power Invest Corp. Ltd.	China	Utility	4,447.5
Deutsche Bank SA	Brazil	Banks and brokers	3,529.6
The Export-Import Bk of China	China	Banks and brokers	3,345.2
China Galaxy Securities Co Ltd.	China	Banks and brokers	3,185.5
Sources: Refinitiv and S&P Global Ratings Research.

International Public Finance Crosses $1 Trillion

Bond issuance from the international public finance sector finished 2020 at $1.05 trillion. This is up 38% from $763 billion in 2019. Although still dominated by Chinese issuers, this year's growth has been broad-based across continents and countries, with many developed markets posting strong totals.

Data on non-U.S. public finance volume is not reliable for determining the true size of borrowing, but the numbers can suggest major trends. The four years prior to 2020 have recorded the highest volume ever in international public finance, averaging over $632 billion annually, with 2020 exceeding the $1 trillion mark for the first time.

Japan Leads Structured Finance Issuance Outside The U.S. And Europe

Securitizations and covered bonds outside the U.S. and Europe totaled $154 billion in 2020, a 36% decline from 2019. Covered bonds fell 15% in 2020 to $43 billion, despite maintaining higher levels than 2019 for most of the year. Securitizations have taken a hard hit, down 41% year over year in the third quarter to $113 billion. Securitizations declined 37% year over year in Australia, 42% in Canada, and 60% in Latin America. Covered bond issuance in Canada is now down 24%, Australian covered bond issuance is down 29%, and Japan covered bond issuance was up 4%. Japan had the strongest performance in 2020 outside the U.S. and Europe with $76 billion in originations in 2020.

As vaccine rollouts in several countries continue, S&P Global Ratings believes there remains a high degree of uncertainty about the evolution of the coronavirus pandemic and its economic effects. Widespread immunization, which certain countries might achieve by midyear, will help pave the way for a return to more normal levels of social and economic activity. We use this assumption about vaccine timing in assessing the economic and credit implications associated with the pandemic (see our research here: www.spglobal.com/ratings). As the situation evolves, we will update our assumptions and estimates accordingly.

Related Research

• European Structured Finance Outlook 2021: In Short Supply, Jan. 20, 2021
• After Ending 2020 Strongly, U.S. Auto Sales Are Set To Continue Recovery In 2021, Jan. 19. 2021
• Japan Structured Finance Outlook: Recovery Or Relapse?, Jan. 8, 2021
• U.S. Corporates Hold Record $2.5 Trillion Cash To Meet Pandemic Shock; Debt Reaches $7.8 Trillion, Dec. 8, 2020
• Limping Into A Brighter 2021, Dec. 3, 2020
• Staying Home For The Holidays, Dec. 2, 2020
• The Eurozone Can Still Rebound In 2021 After Lighter Lockdowns, Dec. 1, 2020
• Emerging Markets: Risks To Outlook Balanced As Recovery Momentum Set To Pick Up In 2021, Dec. 2, 2020
• Latin America's Economic Recovery From The Pandemic Will Be Highly Vulnerable To Setbacks, Dec. 1, 2020

Ratings Performance Analytics:	Nick W Kraemer, FRM, New York + 1 (212) 438 1698; nick.kraemer@spglobal.com
	Zev R Gurwitz, New York + 1 (212) 438 7128; zev.gurwitz@spglobal.com
	Kirsten R Mccabe, New York + 1 (212) 438 3196; kirsten.mccabe@spglobal.com
	Jon Palmer, CFA, New York; jon.palmer@spglobal.com
	Taron Wade, London + 44 20 7176 3661; Taron.Wade@spglobal.com