One of our faithful readers emailed the other day: “Hey, I noticed it’s been a while since you wrote about the high-yield market. Would love to get your insights on what’s going on there. Seems like a lot of activity recently. Trying to figure it out. Thanks.”

Help is on the way. For assistance, we recruited Matthew Fuller of LevFin Insights, our content partner for all things high-yield.

Matt, give a sense of that market from your perch. “From the perspective of high-yield investors, it’s a great time to be involved,” he told us in an interview this week. “We were pretty much shut down in March. Total volume was only $4 billion, which is very paltry. Zero deals for three weeks. That’s shocking, but one week shorter than December 2018, which marked the lowest volume since the GFC...

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“Wall Street has very little to do with Main Street.” – Joachim Klement, market analyst, Liberum Capital.

Featuring Charts

Chart of the Week: Junk Food

May 20, 2020

High-yield bond issuance cratered with the onset of COVID-19 in March, then rebounded sharply in April.

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Chart of the Week: Labor Lost

May 13, 2020

It took nine years to add 21 million US workers to payrolls; COVID-19 wiped them out in two months.

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Chart of the Week: End of a Cycle

May 7, 2020

The onset of COVID-19 also signaled the expansion’s end; 1Q GDP slumped 4.8%, worst since 2008.

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Chart of the Week: Dressed for Distressed

April 29, 2020

When secondary leveraged loan prices cratered last month, the resulting distressed volume outweighed all 2008-09 loans.

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Chart of the Week: Sector Protector

April 22, 2020

Defensive industries such as business services, healthcare, tech, and A&D led all sectors in 1Q M&A volume

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Chart of the Week: Peak to Trough

April 15, 2020

Last month’s early price plunge was three times worse than the Great Depression.

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Features

The Pulse of Private Equity – 5/18/2020

April was down, as expected Download PitchBook’s Report here. An early look at April 2020 deal volume shows the significant decline we’ve all been anticipating. Only 158 transactions were completed last month, less than half of the typical monthly volume we were seeing pre-pandemic. As we’ve noted in the past, some of these deals were announced

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Leveraged Loan Insight & Analysis – 5/18/2020

MM Sponsored dealflow pipeline expected to remain anemic through summer Middle market syndicated loan issuance remains extremely thin for sponsor-backed deals so far in 2Q20. Volume has only reached about US$1.6bn so far in 2Q20 with zero opportunistic flow such as refinancings or dividend recaps. Anecdotally, lenders indicate that the M&A pipeline is extremely thin

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DL Deals: News & Analysis – 5/18/2020

Non-Accruals across lower middle market portfolios rise to 7.5% Effects of the coronavirus lifted the average non-accrual rate across lower middle market BDC portfolios by 1.7%, to 7.5% in the first quarter. Out of $5.8 billion of outstanding first- and second-lien term loans, $436 million was on non-accrual across 42 borrowers, up from $331 million

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Private Debt Intelligence – 5/18/2020

Fund Managers Response to COVID-19 Although fundraising is slowing in the wake of the economic fallout from COVID-19, most alternatives fund managers appear to be staying the course. From a survey conducted by Preqin to fund managers, three-quarters said that they do not plan to change their investment strategy for any active funds as a

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PDI Picks – 5/18/2020

Will coronavirus prompt a new wave of distress? One of the long-term impacts of the global financial crisis was a sharp uptick in non-performing loans as lax underwriting standards prior to the crisis and the global recession that followed created a perfect storm where over-levered borrowers were unable to repay their debts....

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