“Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!”
In Through the Looking Glass, the Red Queen’s response to Alice’s frustration in running hard yet not getting anywhere mirrors the state of the broadly syndicated loan market today.
According to PitchBook LCD, overall leveraged loan activity of $736 billion through June 30 was a record high. Yet despite that, new deals were only 13% of total 2Q volume, down from 18% in the first quarter, down from 25% for all of last year, and off sharply from the 52% average for the five years preceding the Fed hike regime in 2022.
Despite record large cap volume the Morningstar LSTA US Leveraged Loan Index actually shrank by 0.7% over the past twelve months. Imagine where the Index would be without at least some of the new deal activity...
“I don’t want to pull up too short or too early and then have inflation stay high. That’s a terrible, terrible situation.” – Mary Daly, President, Federal Reserve, San Francisco.
Featuring Charts
Chart of the Week: The Pendulum Always Swings
Refinancings by direct lenders returned last quarter to outweigh BSL takeouts. Source: PitchBook LCD, data through June 30, 2024(Past performance is no guarantee of future results.)
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Chart of the Week: Lower Risk, Higher Yield
Among a basket of traded credit strategies, leveraged loans are showing well. Source: The Daily Shot(Past performance is no guarantee of future results.)
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Chart of the Week: Feeling and Dealing
Consumers gloomy, but keep pushing stock prices higher. Source: Bloomberg, The Conference Board(Past performance is no guarantee of future results.)
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Chart of the Week: Be Direct
Private capital fundraising for the first quarter was predominantly for direct lending. Source: Preqin Pro(Past performance is no guarantee of future results.)
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Chart of the Week: Steady as She Goes
Middle market direct lending spreads per unit of leverage consistently higher than large caps. Source: LSEG LPC(Past performance is no guarantee of future results.)
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Chart of the Week: No Money Back Guarantee
Distributions to LPs are severely hampered by slower M&A activity since Covid. Source: Ares Management, Goldman Sachs(Past performance is no guarantee of future results.)
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Leveraged Loan Insight & Analysis – 7/8/2024
1H24 Sponsored loan volume tops US$400bn, exceeding full year 2023 results PE sponsors tapped the loan market for a record US$227bn in 2Q24, pushing sponsored issuance for the first six months of the year to over US$400bn…. Login to Read More...
View ArticleMiddle Market & Private Credit – 7/8/2024
PMR Portfolio Concentrated in Lower Rating Categories Click here to learn more. The PMR portfolio consists exclusively of ‘B’ category and below issuers as the companies in the portfolio generally tend to be the product of leveraging transactions such as sponsor-driven LBOs or dividend recaps…. Login to Read More...
View ArticlePDI Picks – 7/8/2024
Direct lending still the preferred choice In a much-changed world, investors are inclined to support well-established strategies and geographies. As the saying goes: the more things change, the more they stay the same. While the volatile inflationary and interest rate environment has created very different conditions for private debt firms to navigate, provisional data from…
View ArticlePrivate Debt Intelligence – 7/1/2024
India overtakes China in private debt AUM Read more in Preqin’s Insights+ Report: Alternatives in APAC 2024 Private debt in APAC has nearly doubled in the five years leading to September 2023. growing from $62.5bn in AUM to $123.5bn…. Login to Read More...
View ArticleMiddle Market & Private Credit – 7/1/2024
Fitch U.S. MM CLO Spotlight – May 2024 Click here to learn more. ‘CCC’ Exposure Marginally Up Exposure to assets with Fitch IDRs or credit opinions of ‘CCC+’ or below, excluding nonrated assets, increased by 20 bps to 18.6%, compared to last month and 3.5% higher than a year ago…. Login to Read More...
View ArticleMiddle Market Deal Terms at a Glance
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Beginning in July 2022 The Lead Left published a series of articles on credit market. This report consolidates those articles.
Cov-lite trends Inflation & rising interest rates – LIBOR to SOFR transition Mega-tranche uni trend ESG takes center stage Login to view interactive report and download PDF version. … Login to Read More...
Beginning in September 2021 The Lead Left published a series of articles on supply chain. This report consolidates those articles.
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