How big of a unitranche could we see this year? The “mega-unitranche” reached new scale in 2021, as private lenders’ capacity to finance large transactions continued to increase. Unitranche loan issuance exploded to US$151bn in 2021, from US$41.5bn the prior year. This included US$86bn of large corporate unitranches, up from US$18bn the prior year…. Subscribe
US LBO first-lien leverage at all-time high Total leverage on US LBO deals continues to hover around the 7.1x mark in 1Q22, the same area its averaged over the last seven quarters. What is different this quarter is an increase in first-lien leverage which is averaging 5.9x so far, the highest level tracked all-time. So…
BDC loan valuations stabilize in most recent filing period The most recent data from BDC earnings season shows that debt valuations stabilized in 4Q21, as price appreciation finally eased off, following a huge rebound from the lows seen in 1Q20 when COVID first hit. Looking at the cohort of BDCs that have filed as of…
BDCs post further NAV gains BDC earnings season is underway, with funds that have filed to date posting positive performance overall in 4Q21, topping off a strong year for the asset class. BDC earnings climbed in 2021 against a backdrop of robust portfolio company performance and record origination activity. BDC origination activity was bolstered…
More institutional deals get done without a CSA this month The institutional loan market has mostly shifted to a term SOFR base rate this year. While there are a few deals that have been done at a spread over Libor, these are on the decline. Only 11% of institutional term loans so far in February…
BDC visible loans benchmark edges lower year-to-date Valuations of actively marked BDC loans have edged marginally lower so far in 2022, continuing the trend seen in 4Q21. This follows a sharp appreciation in valuations during the 1-3Q21 time-period as companies bounced back from COVID hit 2020. The Refinitiv LPC BDC Visible Loans Benchmark (comprised of…
New LBO loan assets increase as a proportion of total PE buyout activity Private equity sponsors actively tapped the loan market in 2021 to back over US$196bn in buyout activity, the second highest total on record and just behind 2007’s historic totals north of US$200bn. More significantly, over US$126bn or 64% of total issuance represented…
Direct lending drives sponsored middle market issuance to new record Direct lending drove sponsored middle market loan issuance to new heights in 4Q21 and full-year 2021, as sponsors tapped the market at a blistering pace to fund LBOs and add-on acquisitions. Direct lending activity spiked to US$131bn in 2021, almost doubling 2020’s volume and topping…
U.S. M&A Volume by Segment Lenders cleared over US$619bn in US syndicated M&A loan volume in 2021 to mark the second highest annual total on record, just behind the US$648.5bn raised in 2018. The calendar was steady throughout both the first and second halves of the year with 2Q21 logging the second strongest quarterly results…
US leveraged loan returns advance to 5.2% in 2021, HY bonds gain 5.4% US leveraged loans wrapped up 2021 by posting a return of 0.78% in the fourth quarter, outpacing both high yield bonds (0.66%) and investment grade bonds (0.17%). In comparison, returns on the S&P500 accelerated to 10.7% in 4Q21, the highest all year….