German corporate bond issuance is expected to remain strong over the next 12 to 18 months, driven by the automotive sector's refinancing requirements and lower interest rates, Moody's said in a report.
However, total bond issuance is unlikely to reach the highs touched in 2018, and issuance related to mergers and acquisitions is also expected to fall short of 2018 levels, according to the report.
Brexit and trade-related concerns will weigh on issuance, especially for speculative-grade companies, according to Matthias Hellstern, Moody's managing director of corporate finance.
Going into 2020, the average credit quality of rated Germany-based companies will deteriorate as most companies are at a weak position in their rating categories, and a lot of companies are doing business in sectors facing negative business conditions due to ongoing trade tensions and a slowdown in global economic growth.
