Direct lenders grab a larger share of large corporate volume As the US leveraged loan market continued to slow amidst wider market volatility in 3Q22, direct lenders stepped in, taking a greater share of large corporate leveraged loans. Private credit to US large corporate borrowers, those with revenues or loan sizes US$500m or higher, amassed…

BDC share price-to-book value ticks up but remains below recent highs BDC share price-to-book values have moved around recently in tandem with shifts in the equities market and investor sentiment. The average share price-to-book value is at 0.86x as of November 4, up from 0.76x in late September but down from 0.95x in mid-August…. Subscribe

US LBO purchase price multiples dropped in large corporate market last quarter As concerns about the potential for a recession continue to cause heightened volatility across the market, more focus is put on enterprise valuations. Last quarter, LBO purchase price multiples in the large corporate syndicated market declined to 10.8x, the lowest since 4Q18. Of…

US sponsored middle market direct lending activity stayed robust in 3Q22 Last quarter, there was US$35.1bn of US sponsored middle market direct lending volume, 17% higher than 2Q22’s levels and the most since 4Q21’s record US$55bn level. The direct lending market remained quite busy in 3Q22, in contrast to the broadly syndicated market which slowed down…

U.S. Primary yields soared in 3Q22 In 3Q22, first-lien institutional yields skyrocketed to levels not seen since the credit crisis. The average primary yield, assuming a 3-year term to repayment on first-lien institutional term loan Bs was 9.45% in 3Q22, up over 300bp from 2Q22 levels. While spreads widened, they only accounted for 19bp of…

Syndicated middle market loan volume falls 37% q-o-q in 3Q22 3Q22 syndicated middle market loan issuance tumbled by 37% quarter over quarter amid increased economic uncertainty and market volatility. Lending activity fell to US$35bn in 3Q22 from US$55bn in 2Q22 and was also far below the US$50bn posted in 3Q21. On a year-to-date basis, issuance…

3Q22 U.S. Leveraged volume down 45%; HY bonds off 77% y-o-y Less than US$182bn of leveraged loans and HY bond issuance was completed in 3Q22, the weakest quarterly results in over six years and a55% drop compared to the same time last year. At US$759bn, 1-3Q22 totals were down almost 45% compared to the year…

Poll: Direct lenders overwhelmingly say they stayed busy in 3Q22 The direct lending market continues to be a popular go-to option at a time when the syndicated loan market has seen lower volumes due to heightened levels of volatility. Refinitiv LPC recently polled US middle market lenders, asking them: were you able to lend as…

Unitranche minimum spread threshold shifts higher While volatility led to a significant increase in pricing in the broadly syndicated institutional loan market early in the year, it took longer to have an effect in the direct lending space. For unitranches, the average blended spread in 2Q22 was flat relative to 1Q22 at 596bp. However, direct…

BDC share price-to-book value remains above recent lows BDC share price-to-book values have bounced around recently, impacted by shifting investor sentiment. The average share price-to-book value is at 0.91x as of September 9, down from 0.95x in mid-August but is still up from a recent low of 0.80x in June. There are wide variations in…