Ratings agency Fitch has warned that the search for yield is driving “aggressive” 2007-style financing structures on high-yield bonds and loans in Europe.

Fitch said: "The return of 2007-style 'originate-to-distribute' and 'covenant-lite' structures on up to 7x debt-to-Ebitda in the loan market, as well as a rise in dividend recapitalisations and deeply subordinated payment-in-kind note issuance in the high-yield bond market highlights the impact of excess liquidity."