This week we chat with Stephen Boyko of Proskauer. Steve is a partner in the firm’s corporate department and co-head of the private credit and finance groups. He represents one of the largest client rosters in the industry, including an array of specialty finance companies, private debt funds, and BDCs.

The Lead Left: Steve, thanks for joining us again. We spoke in April to review 1Q trends. You recently came out with your first half survey [link]. What’s activity been like?

Stephen Boyko: Activity remains strong as we move into vacation season. For example, last Friday afternoon I got four new transactions. And we had eight new deals overall by the end of the day. So there does seem to be a fair amount of M&A activity going on.

It’s very competitive. We are witnessing a constant loosening of pricing and terms. In auction deals, we are seeing 3-5 sponsors competing for the deal, and each are bringing 3-5 lenders to the table. The vast majority of deals that we are doing are sponsor-backed. Only 20% is non- sponsored, direct-to-borrower deals. And roughly 70% of our transactions relate to acquisitions.

TLL: Have you seen much of a change from the first quarter? Any surprises?

SB: There have been a few surprises. We weren’t surprised that spreads are going lower. We were surprised that there has been so much activity in the healthcare space, given all the uncertainty surrounding healthcare reform. We thought lenders would be picking their spots. But 25% of our deals have been healthcare-related, which is somewhat surprising.