BDC credit losses expected to top 100bp in 2023 The majority of respondents (68%) in Refinitiv LPC’s Quarterly BDC Survey expect credit losses to top 100bp in 2023, with 31% of survey participants predicting losses above 200bp. The weighted average non-accrual rate for public and private BDCs combined ended 4Q22 at 1.48%, up from 1.26%…
SVB was a major player in US middle market technology lending Silicon Valley Bank, the fifth largest lender to US middle market technology issuers, collapsed last week. According to Refinitiv LPC data, between 2020 and 2022, SVB agented 35 US middle market technology loans, totaling a combined US$4.8bn in deal volume…. Subscribe to Read MoreAlready
US primary institutional yields are averaging 9.57% in 1Q23 Average primary institutional yields have flattened in the last two quarters after soaring in 3Q22. At 9.57% so far in 1Q23, the average first-lien institutional yield, assuming a three-year term to repayment, is slightly below 4Q22’s 9.62%. While SOFR rates continue to rise, tighter discounts and spreads…
US private credit fundraising totals over US$35bn in 1Q23 1Q23 has been a busy one for private debt fundraising. Already this quarter there has been US$35.8bn of US middle market private credit fundraising, on pace to log the highest level since 2Q22’s US$51.4bn total. There has been a handful of multi-billion-dollar capital raises so far…
BDC non-accrual rates tick higher Despite increased concerns around credit quality in recent months, BDC non-accrual rates have remained low by historical standards. Looking at the universe of BDCs that have reported 4Q22 earnings, the weighted average non-accrual rate on debt investments ticked up to 2.17% in 4Q22 from 1.91% in the prior quarter…. Subscribe
Downward price flexes in the institutional market are on the rise February has seen an increase in downward price flexes in the institutional loan market with 12 price cuts on first-lien term loans reported so far. This is up from the 9 reported for all January and on par with November and December totals. Midway…
Returns jump across US corporate credit to start the year Total returns on US corporate credit have jumped to start the year, driven by more favorable sentiment across the capital markets, as investors react to a third straight month of declining inflation and the expectation that the Federal Reserve is closer to completing rate hikes….
US LBO loan vol. (US$bn) and direct lending share of total Last year, when heightened volatility caused US syndicated LBO loan volume to retrench, the private credit space helped soak up some of the demand. US direct lending LBO volume totaled US$92.8bn in 2022, comprising a 45% share of overall US LBO loan volume, an…
There was 4.1x more MM LBO volume in the direct lending market vs. syndicated market in 2022 With very challenging conditions in the syndicated loan market, more and more sponsors turned to the direct lending market for funds in 2022. Even in the fourth quarter, when direct lending contracted, the ratio of direct to syndicated…
US secondary market rallies to begin the year The US secondary loan market has rallied to start the year. The LPC 100 cohort of the largest, most widely quoted loans is up 142bp so far in January to 92.7, and middle market loans are 34bp higher to the 92.8 context. Volatility left a vastly altered…