2017 US Syndicated loan volume tops US$2.5Tr to set new record Despite the din of geopolitical noise in the background, 2017 was a remarkably steady year in the loan market, punctuated by an especially strong finish in the last few weeks of 4Q17. At US$2.5Tr, full year 2017 US syndicated loan volume was up 26%…
Flex activity swings back in favor of issuers this week So far this week, flex activity has swung back in favor of issuers after investors pushed back on several deals in prior weeks. The Flex Factor averages a very issuer friendly flex score of -1.9 this week, after occupying investor friendly territory the prior two…
Yields widen slightly for new money deals; tighten for refis Average yields for first-lien institutional term loans have tightened slightly so far in 4Q17, after having ticked up in the past two quarters. The average first-lien institutional term loan yield, assuming a three-year term to repayment is 5.09% in 4Q17, down 7bp from the 5.16%…
Middle Market LBO issuance hits post credit crisis high at $24B Despite lenders complaining of a supply demand imbalance for most of the year, middle market LBO issuance is actually quite robust in 2017. Year to date, syndicated middle market LBO loan issuance has already reached US$24.2B, the highest level tracked post credit crisis and…
Primary leveraged yields tighten slightly so far in 4Q17 Yields have declined slightly in 4Q17 despite an increase in the Libor component. The average yield, assuming a three-year term to repayment is at 5.07% so far in 4Q17; slightly below the 5.16% recorded in 3Q17. Holding up the yields is the increase in the 3-month…
Primary leveraged yields are almost flat in 4Q17 Average primary yields on first-lien institutional term loans have been relatively flat so far in 4Q17. At 5.11%, the average yield assuming a three-year term to repayment on first-lien institutional term loans is just 5bp below 3Q17 levels. However, when looking at the components, yields have been…
Investors have increasingly warmed to riskier issuers since 2016 Since the second half of 2016, investors have increasingly gotten more comfortable with riskier names. According to the Flex Factor, which aggregates price and structural flex activity on institutional loans, B3 rated issuers have seen more issuer friendly changes to their loans now compared to a…
Many BDCs still struggling to trade at book value and higher Investors are getting ready to parse through a slew of BDCs earnings, which will be released this week. Last quarter, many BDCs disappointed with announcements of rising non-accruals, dividend cuts, and declining yields which caused the average price to net asset value per share…
Leverage levels diverged on middle market sponsored deals in 3Q17 When it comes to lending to smaller issuers, bank and non-bank lenders have very different risk tolerances in today’s market. Back in 2013 banks and non-bank lenders both lent to middle market issuers at similar leverage levels. However over time that has diverged due to…
Strong investor appetite supports institutional issuance but tougher credits command better terms Despite robust market technicals including two weeks of retail fund inflows and a steady CLO pipeline, institutional lenders are reconciling strong demand for assets with discipline around credit quality. Roughly $34Bn of institutional loan volume has come to market early in 4Q17 and…