The high yield bond premium over Treasuries and volatility as measured by the VIX have proven to be highly correlated. Source: Bloomberg

Multiple factors including lower asset yields and slashed dividends have punished trading levels for public BDCs. BDC Price to Net Asset Value Source: Thomson Reuters LPC

For the first time in at least a decade, purchase price multiples for middle market buyouts have topped the metric of their broadly syndicated counterparts. LBO Purchase Price Multiples Source: Thomson Reuters LPC

One consequence of higher purchase price multiples is more cash equity as a share of buyout capital. Equity contribution for middle market institutional LBOs Source: Thomson Reuters LPC

Despite their reputation as riskier loans, dividends to sponsors have a 20-year history of lower defaults than the original buyout financings. Leveraged Loan Defaults by Purpose (1995-2014) Source: S&P Capital IQ

Seller friendly market conditions have spawned a revival of dividend recaps, though volume is still short of the comparable period two years ago.

While these data include all middle market loans, not just LBOs, the trend seems to confirm regulatory pressures are impacting leverage.  Source: S&P Capital IQ

Regulatory pressures have buoyed spreads since early 2014, with middle market at a consistent premium to large caps. Source: Thomson Reuters LPC

Not surprisingly, investors’ views of where interest rates will go track investing decisions on floating rate instruments. Source: Wells Fargo, Desktop Q3 2015 CLO Outlook.

The share of leveraged loans held by banks was up slightly, thanks to more BB and term loan A issuance this year.