Loans à la Mode

Following our story last week on skyrocketing costs of natural vanilla flavoring, fans of confectionary innovation alerted us to another development on the sweets front.

A Swiss company is launching “ruby chocolate” to appeal to millennial appetites as well as to open foreign markets less known for chocoholics. While not available to consumers until 2018, the reddish varietal is reported to be a “tension between berry-fruitiness and luscious smoothness.” It also apparently has no added berries or fruit.

We’ll leave it to future readers to pass judgement on this new treat. In the meantime we’re relegated to passing along bittersweet news from the leveraged loan front.

With less than two weeks to go before the end of the third quarter, loan activity in the broader markets has continued to favor issuers. S&P LCD reports that...

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QUOTE OF THE WEEK

“The market continues to hit all-time highs, yet there are a myriad of excuses for it to sell off.”
– Michael Scanlon, managing director, Manulife Asset Management.

Chart of the Week: Flex Signs

Pricing on almost 100% of US leveraged loans was flexed in favor of the issuer during July and August.

Lead Left Spotlight

Stephen Boyko

Partner

Proskauer

"Even the direct lenders who are offering the most aggressive terms want covenants when they hold a good chunk of the deal."

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Jason Block & Fred Buffone

Partner and Chief Investment Officer | Principal

Freedom 3 Capital

"We want to create a capital structure that works for the business plan."

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Marc Daniel

Managing Director, Mergers & Acquisitions

SunTrust Robinson Humphrey

"LPs are committing new money to PE funds at the fastest pace since 2008."

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Ted Goldthorpe

Head of Credit

BC Partners

"For our sponsored transactions, we source them by the traditional approach. For non-sponsored deals we target certain industry sectors we know well."

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George Majoros

Co-Managing Partner

EagleTree Capital

"Understanding trends remains critically important for private equity."

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Mary Katherine DuBose

Co-Head of Asset Backed Finance and Securitization

Wells Fargo Securities

"The market is diversified and fragmented, therefore the middle market encompasses a large opportunity."

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Features

Markit Recap – 9/18/2017

Toys R Us triggers CDS credit event Toys R Us became the latest CDS name to default after it filed for Chapter 11 bankruptcy protection. There have been lots of contentious credit events this year (Noble, Banco Popular, Monte to name a few) but this one was cut and dried. An auction will be held

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Leveraged Loan Insight & Analysis – 9/18/2017

Toys ‘R’ Us bankruptcy pushes DIP loan issuance to the highest level since 2009 Toys ‘R’ Us launched a US$3.125bn debtor-in-possession (DIP) facility this week after filing for Chapter 11 protection on Monday. If the deal goes through at the launch amounts, it would bring year to date DIP loan issuance to US$7.6bn across 13

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The Pulse of Private Equity – 9/18/2017

The numbers behind the fundraising boom Download PitchBook’s Global PE Deal Multiples Report Here According to our new PE & VC Fund Performance Report, released this week, net cashflows to private equity investors stayed in positive territory through 2016. Net cashflows (the difference between LP contributions and GP distributions) are on a downward trend and, while

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Private Debt Intelligence – 9/18/2017

Investors Satisfied with Private Debt Performance Investors’ positive perception of the private debt industry remains strong moving into H2 2017, as cited by more than half (57%) of survey respondents. Potentially more telling, however, is the consistently low reports of any negative perception from investors....

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Middle Market Deal Terms at a Glance

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Special Report: The Case for Covenants

Beginning in May 2017 The Lead Left published a series of articles on Covenants. This report consolidates those articles.

Special Report: The Art of the Add-On

Beginning in October 2016 The Lead Left published a series of articles on add-on. This report consolidates those articles.

State of the Capital Markets – Second Quarter 2017 Review and Third Quarter 2017 Outlook

Review of Current Market Conditions/ Analysis of Capital Markets Metrics/ Review of Credit Quality/ Outlook for Third Quarter 2017