Syndicated middle market loan volume falls 10% in 2022 In 4Q22, syndicated middle market lending posted its lowest quarter since 1Q21 amid bouts of market volatility and economic uncertainty. Issuance declined to US$35.5bn in the most recent quarter from US$40.1bn in 3Q22 and was also far below the US$52bn posted in 4Q21. On a full-year…
US institutional discounts widen, but remain at wide levels After reaching levels not seen since the credit crisis in 3Q22, discounts on US first-lien institutional term loans have tightened this quarter. The average original issue discount (OID) is 96.07 so far in 4Q22, tighter than 3Q22’s average of 94.15, but still at historically wide levels….
BDC portfolio marks expected to move moderately lower BDCs navigated the most recent 3Q22 earnings season successfully, benefiting from the higher interest rate environment as rising base rates on their floating rate loans boosted interest income. At the same time, BDC net asset values declined modestly due to unrealized losses stemming from lower portfolio marks,…
Returns on US leveraged loans and HY bonds positive for second consecutive month Returns for US leveraged loans and high-yield bonds were positive for a second consecutive month in November, with loan returns higher MoM to 1.24% and high-yield bonds returning 1.87%. Year-to-date returns stand at -9.85% for high-yield bonds, with loans outperforming at -0.9%….
BDC recommendations shift towards “hold” since March BDC research analyst recommendations have been marked by a shift in recent months towards “hold” recommendations, a move away from the “strong buy” and “buy” recommendations observed since the first quarter of this year. Despite this shift, “strong buy” and “buy” still account for over half of all…
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…