Leveraged Loans and Systemic Risk
(Last of a Series)
If nothing else, the history of leveraged lending since the credit crisis shows both regulators and regulated entities have worked to shift loans off bank balance sheets.
The object of Leveraged Lending Guidance, in turn, was not to eliminate credit risk, but limit the most aggressive bank lending practices – for example, leverage over six times ebitda. That would, in turn, help minimize risk to depositors.
The Great Recession only accelerated what has been twenty-plus years of disintermediation from banks to “shadow” banks...
Quote of the Week
“The market seems to be saying that the FOMC isn’t going to raise rates in 2019.” – Kevin Giddis, head of fixed-income capital markets, Raymond James.
Featuring Charts
Chart of the Week: Bank Shot
Mergers, consolidations, and regulation all share responsibility for the flight of leveraged loans to the non-bank sector.
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Chart of the Week: Price Fix
The long-term durability of leveraged loans was demonstrated out of the last recession, as values climbed back to par.
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Chart of the Week: All-Terrain Vehicles
Over time collateralized loan obligations have proven to be resilient through cycles and regulatory hurdles.
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Chart of the Week: Shooting Below Par
After a good run leading up to last year’s market volatility, virtually no names in the LCD LSTA Leveraged Loan Index are trading at or above par.
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Chart of the Week: Mutual Attraction
The premium between large cap and the middle market has shrunk to 50 bps, the tightest in a decade.
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Chart of the Week: Ramping Up
Direct lending has attracted over $275 billion in capital since 2014 across various strategies.
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Beginning in March 2018 The Lead Left published a series of articles on the healthcare industry. This report consolidates those articles.
Beginning in October 2018 The Lead Left published a series of articles on loan recovery. This report consolidates those articles.
Review of Current Market Conditions/ Analysis of Capital Markets Metrics/ Review of Credit Quality/ Outlook for First Quarter 2019
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