Third Quarter Report (Second of a Series)

For two weeks in a row we’ve been blessed with memorable quotes from top market observers. We wrote in our last column about Fed chair Powell’s comment that the current cycle could go on “indefinitely.”

This week’s nugget comes from our long-time friend, Steve Miller, the chief executive of Fulcrum Financial. “You can’t fight the Fed,” he said, “except, maybe with loans.”

Indeed, that’s the beauty of the floating rate asset class in a rising rate environment. Unlike equities – or fixed income, for that matter – that seem increasingly spooked as the Fed persists with its upticks, this climate is tailor-made for loans and their investors...

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Quote of the Week

“It’s a Wall Street truism that you can’t fight the Fed – except, maybe with loans.”– Steve Miller, ceo, Fulcrum Financial Data.

Chart of the Week: Yield of Dreams

Debt to ebitda has risen steadily for institutional middle market term loans, but yields are up as well.

Lead Left Spotlight

Kevin Alexander & Michael Moravec

Deputy CEO / Head of Investment Banking

Natixis

"We are opportunistic. We’re looking for really strong athletes with an entrepreneurial spirit."

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Jessica Reiss & Kerry Kantin

Head of Leveraged Loan Research / Managing Director Covering Leveraged Loans

Covenant Review / LevFin Insights

"Portability isn’t common, but we’ve seen an uptick."

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Thomas A. Stewart

Executive Director

National Center for the Middle Market

"Middle market companies are critical elements of industry clusters across the country."

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Peter Magas

Managing Director

Beecken Petty O'Keefe & Company

"Demographics suggest continued demand for healthcare services and the provider base cannot keep pace."

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Mark Habner

Co-Founder & CEO

BeckWay Group

"Individuals within a company truly make the difference in performance and excellence, not the company itself."

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Features

Leveraged Loan Insight & Analysis – 10/15/2018

After strong 2Q, 3Q18 ABL loan volume down 45%; 1-3Q18 totals 2% off y-o-y Consistent with behavior observed across the leveraged cash flow market, the asset based loan market saw a marked drop off in issuance in 3Q18, completing less than US$17bn in deals via retail syndication. These results represented a 45% decline in volume

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The Pulse of Private Equity – 10/15/2018

Are SBOs a drag on fund performance? Download PitchBook’s Report here. Secondary buyouts are one of the most critiqued aspects of the private equity industry. But SBOs aren’t going anywhere, and they represent one of the largest deal sourcing opportunities in today’s market. Still, it’s worthwhile to investigate the wisdom of buying “used” portfolio companies, since

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PDI Picks – 10/15/2018

When geography is the same Multi-regional and North American funds have taken the top two spots again for regions with most credit funds raised. Investors are going global this year, as funds with multi-regional geographic mandates raised have raised the most money in 2018 at $31.3 billion, or 35.36 percent of the $88.57 billion total,

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Private Debt Intelligence – 10/15/2018

Direct Lending Sees Banner Q3 Although private debt fundraising activity slowed in Q3 2018, with the quarter recording 31 funds holding a final close and securing a total of $24bn in capital, direct lending had a banner quarter. In Q3, four distressed debt vehicles raised $2.4bn, eight mezzanine funds raised $1.5bn and 15 direct lending

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Leveraged Loan Insight & Analysis – 10/8/2018

Syndicated middle market sponsored volume tanked in 3Q18 The summer of 2018 was not noteworthy for those middle market lenders that focus on sponsored deals. Syndicated issuance took a nose dive to just US$13.7bn in 3Q18, down 43% and 30% from 2Q18 and 3Q17 levels respectively. “We are only able to get crumbs in terms

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Middle Market Deal Terms at a Glance

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

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

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

State of the Capital Markets – First Quarter 2018 Review and Second Quarter 2018 Outlook

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