The Price of Everything (Second of a Series)

Loan prices for the most liquid leveraged names continued to drift lower last week in the wake of continued volatility in the public markets.

This despite – or perhaps because of – a Goldilocks-flavored jobs report on Friday. Labor data showed 155k in new jobs for November. Not super great, but enough to help ease worries that a hotted-up economy is in need of aggressive Fed hikes.

Still, the overall loan tone is not a joyous one. Outflows from loan mutual funds continued; last week recorded just over $1 billion...

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Quote of the Week

“If you want to find a place with a lack of imbalances, it’s the consumer.” – Jacob Oubina, senior economist, RBC Capital Markets.

Featuring Charts

Chart of the Week: Downside Protection

December 12, 2018

At the depth of the credit crisis, middle market loan prices proved less volatile than their broadly syndicated counterparts.

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Chart of the Week: Bids Slid

December 5, 2018

Secondary loan bid levels have softened concurrent with overall public market volatility.

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Chart of the Week: Unilevered

November 28, 2018

Leverage for club middle market unitranche deals has stayed a constant 5x.

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Chart of the Week: Risk/Reward Rules

November 19, 2018

Since 2015 investors in the Leveraged Loan Index are being compensated less-well for risk.

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Chart of the Week: Recovery-Lite

November 13, 2018

While data for cov-lite bankruptcies are limited, post-crisis recoveries were below pre-crisis levels.

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Chart of the Week: Tranche Dressing

November 7, 2018

Data suggests that loan recoveries are both facility and structure dependant.

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Features

Leveraged Loan Insight & Analysis – 12/10/2018

Loan bids continue to decline amidst broader market volatility LPC’s most liquid 100 loans cohort traded down again yesterday to 96.15, its lowest level since March 2016. The volatility in the broader market has bled into the syndicated loans market. Loan investors have reacted by yanking roughly US$5.6bn from retail loan funds since the last

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PDI Picks – 12/10/2018

Today’s deal structuring affects private debt’s future Cov-lite, cov-wide or cov-regular, credit managers are making the bed they’ll have to lie in. The private debt deal market is red hot: there is cash aplenty, more lenders than there are deals, egregious EBITDA addbacks – and investors are taking note....

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Private Debt Intelligence – 12/10/2018

Private Debt Industry in Europe Reaches $200bn in Assets Europe has been a key area of interest for investors in private debt in the past year. Of the private debt investors surveyed by Preqin in June 2018, 47% view Europe as presenting the best opportunities – the largest proportion of any region. Additionally, the number

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The Pulse of Private Equity – 12/10/2018

Why are SBOs more expensive? Download PitchBook’s Report here. Secondary buyouts have transacted at a premium versus non-SBOs since the financial crisis. That’s somewhat surprising; one might assume that “used” portfolio companies would trade at a discount given the operational improvements that have already been made, leaving less low-hanging fruit for the next sponsor. Not so

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The Pulse of Private Equity – 12/3/2018

Leon Black sounds the alarm Apollo’s Leon Black made a few waves this week, warning that “the credit markets, unlike the equity markets, have gone to bubble status.” He said the amount of covenant-less debt available today is higher than it was in the run-up to the financial crisis. Bloomberg’s Lisa Abramowicz was right to

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State of the Capital Markets – Third Quarter 2018 Review and Fourth Quarter 2018 Outlook

October 11, 2018

Review of Current Market Conditions/ Analysis of Capital Markets Metrics/ Review of Credit Quality/ Outlook for Fourth Quarter 2018

Special Report: Spot-lite on Cov-lite

February 7, 2018

Beginning in October 2017 The Lead Left published a series of articles on covenant-lite. This report consolidates those articles.

Special Report: Private Credit vs. Public Debt

November 30, 2017

Beginning in March 2017 The Lead Left published a series of articles on private credit and public debt. This report consolidates those articles.