Dollars and Scents


News reached us over the weekend of a new trend in baseball. Apparently several Chicago Cubs relievers are applying copious amounts of perfume as a good luck charm. Turns out players from last year’s Kansas City Royals did the same thing. And they won the World Series. The Cubs manager tweeted, “Aroma still matters.”

A different kind of fragrance is wafting through the leveraged loan market these days. A combination of factors is leading to a more aggressive stance by large cap arrangers. As noted by the WSJ this week...


“Deals have gotten more aggressive in pretty much every respect.”
Alex Jackson, portfolio manager, Insight Investments Ltd.

Chart of the Week: Flipped Flows


Driven by a benign credit environment and favorable relative value dynamics, $2.5 billion has flowed into retail loan funds.

Lead Left Spotlight


Steven Miller


Fulcrum Financial Data

"The market has turned 180 degrees since January. It shows how dynamic the loan market has become."

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Fran Beyers

Senior Market Analyst

Thomson Reuters LPC

""The smaller the deal, the harder it is to get terms.""

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Theodore L. Koenig

President & CEO

Monroe Capital

""Most financial firms don't fail because of losses, they fail due to a lack of liquidity.""

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NEW Jason Kelly5E6A5714 small

Jason Kelly

New York bureau chief


""It is extraordinarily difficult to find real, honest private equity alpha.""

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Paul Peterson

Paul Peterson

Managing director

Wind Point Partners

""The more angles or value levers you can line up the more dots are connected and the more compelling a deal becomes.""

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Lloyd, Eric_for print

Eric Lloyd

Head of Global Private Finance

Babson Capital Management

""The idea is to create bespoke portfolios for our investors. And given our breadth of product, it's seamless for us to do that.""

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Markit Recap – 10/17/2016

There are no shortage of factors that have troubled market participants this year: Brexit; US monetary policy direction; fragility in European banks; oil prices. All of these issues, and others, have caused credit spreads to widen at various intervals in 2016.

But the last few weeks have seen calmness return to the credit markets. The VolX Europe, which shows the realised volatility in the Markit iTraxx Europe index, hit 26.4% this week, which is the lowest level for almost two

Leveraged Loan Insight & Analysis -10/17/2016

Influx of second-lien issuance has investors pushing back on terms

Recently, investors have been more open to the lower rated, higher return type of loans that were more scarce earlier in the year. In particular, second-lien issuance has picked up. Just two weeks into October and there has already been US$1.5bn in completed second-lien loan issuance which would account for 57% of second-lien issuance for all of 2Q16. This influx of higher yielding assets into the market has caused more push back from investors during negotiations...

Private Debt Intelligence – 10/17/2016

Private Debt: Funds in Market

Preqin’s quarterly update on the private debt industry finds that as of the beginning of Q4 2016, there are 304 funds in market targeting an aggregate $147bn globally. With few funds closing through the year to date, the marketplace has grown considerably since mid-year; there are 50 more vehicles on the road seeking an extra $6bn of investor commitments compared to the start of Q3.

Direct lending, once again, represents the largest proportion of private debt funds on the road, both by number (38%) and aggregate capital targeted (39%)...

The Pulse of Private Equity – 10/17/2016

Debt Usage in US M&A Remains Historically Low

Even as multiples remain stubbornly high across multiple sectors, debt usage remains low. This is primarily the result of a confluence of factors, including stricter regulations, cash-rich buyers and a general trend toward buying and building as a strategy on the part of private equity investors. In that last case, PE firms aren’t relying as much on financial engineering as they used to, looking instead to deploying more equity in deals to avoid overburdening portfolio companies with barely serviceable debt loads. Of course, that necessitates shrewd operational enhancements...

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State of the Capital Markets – Third Quarter 2016 Review and Fourth Quarter 2016 Outlook

Review of Current Market Conditions/ Analysis of Capital Markets Metrics Including Covenants, Pricing, and Leverage/ Review of Credit Quality/ Outlook for Fourth Quarter 2016

MM 2016

Special Report: 2016 – A Look Ahead in the Middle Market

Liquidity and Credit Appetite/ Middle Market Pricing and Leverage/ BDCs and Middle Market CLOs/ 2016 Predictions and Trends


Special Report: A Review of European Direct Lending

Banks vs. the Non-Banks/ Hurdles: Legal, Cultural, and Logistical/ Opportunities and Challenges/ A Path to ​Success/ Outlook for 2016…and Beyond