Calculating European direct lending volume is a bit dodgy. But we can triangulate from other metrics. The par amount of all leveraged loans was €15 billion in 1998, per S&P/LCD. It grew to 140 billion before the GFC, and is now a record €240 billion. Conservatively assuming one-third is held by non-banks, that puts it […]
Last week we tuned into Fitch’s European Leveraged Finance Mid-Year Update. The discussion – covering the economy, ratings, and structures – was virtually indistinguishable from recent US market conferences. Apart from the distinguished accents. Volume, for example, has returned to pre-Covid levels. Terms, that were so investor-friendly a year ago, are now decidedly issuer-friendly. Price […]
Our fondness for colorful metaphors led us, in our 2016 series, to compare European direct lending to Burger King’s new hot dog venture. The burger giant’s thesis was to apply “sixty years of flaming-grilling expertise,“ but also recognized they’d have to “chop the onions a little differently.” Apparently, hamburger prowess didn’t translate to frankfurters. They […]
Say what you will about last year’s Covid-induced downturn in the US beginning in March. But it paled in comparison to the UK’s economic cratering. Not since the Great Frost of 1709 had that proud nation suffered such a dramatic slump. But then, like the US, the UK and Europe began to recover in similar […]
Higher inflation generally impacts fixed income assets negatively as increased rates erode bond values. Yet so far, as our Chart of the Week shows, those rates have actually decreased, resulting in fixed income instruments returning better yields for the second quarter. Higher rates will benefit floating-rate instruments. As our high-yield bond friend Marty Fridson reported […]
We caught up with Joseph Lavorgna, Natixis’ chief US economist, who served recently as chief economist of the National Economic Council. “People forget what real inflation is,” he told us. “I was seven years old during the oil embargo in the 1970’s when there were gas lines. Oil prices went from $4/barrel to $40. Imagine […]
We continue our special inflation series with Nuveen’s chief investment strategist, Brian Nick. Are inflation worries overblown? “Prices of certain goods and services are rising for a variety of reasons,” he told us, “all we believe will be transitory. April’s CPI report showed inflation will peak at a higher level this year than expected. But […]
The Federal Reserve is standing firmly behind its view that, despite April’s CPI increase of 4.2%, the highest since 2008, any inflation will be transitory. But some observers worry that pent-up consumerism will create inflation akin to the 1970’s. In a thought piece published last month entitled “Why Our Managers Disagree on Inflation, Interest Rates […]
A question came from a reader on our series about the Lincoln Senior Debt Index. She asked: “I’m curious how the benchmark accounts for where the loan is in the cap structure? Recovery rates for unitranche, 1st lien and second lien are different. So any portfolio would have to match the composition to effectively compare […]
Private debt is a relatively recent entrant to the alternative asset class. In 2007 private debt AUM measured less than $200 billion. Today illiquid credit is $900 billion with growth estimates of 50% over the next 5 years. The Lincoln Senior Debt Index provides lenders and investors a much-needed tool to assess portfolio performance and […]