Primary leveraged yields widen across the board due to rising Libor rate The increase in Libor rates has boosted yields on institutional term loans this quarter. The average yield, assuming a three-year term to repayment is at 5.42% so far in 1Q18; up from 4Q17’s 5.02%. Driving up the yields is the increase in the…
Second lien issuance reaches $6.8B so far in 1Q18 Syndicated and privately placed second lien loan volume has reached US$6.8bn so far in 1Q18, which is not too far behind 4Q17’s volume of US$8.6bn. Issuers continue to rely on second lien facilities to maximize their leverage as 61% of the second liens tranches have been…
Institutional term loans spreads are back to 2007 levels Average spreads on first-lien institutional term loans have dropped to their lowest level since 4Q07. The drop has been across the board. The average spread for large corporate issuers is 320bp so far in 1Q18; this is 10bp below their 4Q17 levels and only 8bp above…
U.S. large corporate LBOs are averaging bigger, more expensive deals so far in 2018 Register now for LPC’s 6th Annual Middle Market Loans Conference – April 25, 2018 at the NY Marriott Marquis! While it is still early in 2018, average purchase price and purchase price multiples on large corporate LBO deals have increased so far…
LBO leverage levels continue to loosen Debt to EBITDA levels on LBO deals spanning the entire market (including broadly syndicated and institutional middle market loans) are currently averaging 6.3 times when looking on a rolling last four quarter basis. This would make it the highest post-crisis average and second only to 4Q07’s average of 6.5…
CLO AAA spreads continue to tighten in early 2018 Spreads for U.S. CLO AAA notes continue to tighten in early 2018 with the average AAA discount margin dipping south of 110bp in mid-February down from 113bp at the end of December. Thinner pricing has been led by Zais Group’s US$460m CLO which came to market…
M&A loan financings comprise 30% of completed U.S. leveraged issuance this quarter The U.S. leveraged loan market continues to chug along at a steady pace. So far this quarter there has been US$110bn in completed leveraged loan issuance. The mix of deals comprises a healthy chunk of M&A. There has been US$33bn in completed leveraged…
BDC share prices were engulfed by market wrath earlier this week Register now for LPC’s 6th Annual Middle Market Loans Conference – April 25, 2018 at the NY Marriott Marquis! For those investors that are bullish on BDCs, this week was a prime buying opportunity as the middle market debt managers were engulfed in equity…
Thomson Reuters financial unit sale marks the largest LBO financing since 2013 Tuesday’s announcement that Blackstone is buying a 55% stake in Thomson Reuters Financial and Risk business in a deal that values the unit at US$20bn makes it the largest LBO deal since 2013. That year saw buyout deals of US$28bn for HJ Heinz…
Strong investor demand for institutional loans help issuers flex terms in their favor Continued strong demand for institutional loans has carried into the New Year. Already there has been US$30bn in institutional loan issuance this year. While that is lower than the year-ago level of US$43bn, this year’s number includes more new money issuance. Of…