American companies have issued nearly twice as much high-yield debt (i.e., junk bonds) so far in 2017 than they had at the same point in 2016, according to Thomson Reuters. But the 96% U.S. boost is actually well below the 195% increase in worldwide high-yield issuance, driven by whopping bumps in non-Japan Asia (+627%) and Europe (+433%).

Why is this happening? High-yield issuance actually declined for the past four years, but the early 2017 boost seems partially reflective of a global increase in leveraged buyouts. For example, while overall U.S. M&A activity is flat from 2016, private equity deals for U.S. targets are up 71%. Private equity is up 45% in Europe, even though overall M&A is down 10%. The big exception to this trend in non-Japan Asia, where private equity activity is actually down 31% from 2016. One explanation for the region's junk bond buffet is buyside demand for diversification, particularly at a time when asset manager inflows are being buoyed by record-high equity markets.

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