Europe’s junk bond markets hit a new record last week, with investors’ voracious appetite for yield further evidenced by the presence of two payment-in-kind notes – one of the market’s most controversial forms of financing.

European companies issued $9.5bn in high-yield bonds last week, topping the previous weekly record of $8.76bn set in the week of March 21, 2011, according to data provider Dealogic.