We conclude our special series on private market valuation myths with: Myth 3: Leveraged capital structures lead to conflicts of interest amongst private equity sponsors and lenders that can create negative outcomes and lower valuations. We asked Ron Kahn, Lincoln International’s valuation chief, to help parse this issue. “If you look at public company capital…
Lincoln’s database shows rising defaults – covenants, not payments – from a low base.
Contact: Marina Lukatskymarina.lukatsky@pitchbook.com
Percentage of First-Lien Loans Clearing with Key Covenant Terms by Quarter (Past performance is no guarantee of future results.) Contact: Steven Miller
Private debt deal activity in Europe sees decline Since the start of 2021, private debt numbers have seen a decline in Europe. In the first quarter of 2023, Preqin tracked 23 private debt deals, down from 39 in Q4 last year. In Q1 2022, the asset class saw 51 deals close. While buyouts dominated then,…
Middle market LBO purchase price multiples declined in 1Q23 Middle market LBO purchase price multiples declined from 12.3 times in 2022 to 11.4 times in 1Q23, the lowest level since 3Q20. While purchase price multiples declined, the equity multiple was only down minimally, to 7.3 times, from 7.4 times in 2022…. Subscribe to Read MoreAlready
In our special series last month on why private debt valuations should not be viewed through the same lens as those of public debt (“Glasses Half-Full”), we dug into the various characteristics of illiquid loans that make them particularly attractive in the current market… ▶︎ Read Apr 17 2023 newsletter: here ▶︎ Chart of the […]
The share of middle market companies with Ebitda adjustments remains high.
New money issuance drops in 2023 Source: Debtwire Par While overall leveraged loan issuance was down 23% year on year to USD 225bn at the end of the first quarter, refinancing activity gained 35% year-on-year for all loans and 30% for institutional facilities. This reflects the significant lack of M&A activity driving issuance contrasting the…