“Thank you for this series. I’m curious how the benchmark accounts for where the loan is in the cap structure? For example, recovery rates for unitranche, 1st lien and second lien are different. Any portfolio would have to match the composition to effectively compare against the benchmark. Otherwise, you would need different benchmarks for each.” – A Lead Left reader

Lincoln’s Larry Levine answered (see our first Chart of the Week):

“We prepare various analyses of the Index. For example, looking at only first lien / unitranche, and separately, second lien. From a yield perspective, as one would expect, returns for second lien loans are higher but more volatile than first lien and unitranche. The latter shows average yields in our Index of 9.2%, while the former was 11.1%...

“There’s a lot of faith-based investing going on.” – Fraser Lundie, head of credit, Federated Hermes.

Featuring Charts

Chart of the Week: Returns Are In

May 13, 2021

While Libor has slumped since 2018, Libor floors and direct lending spreads have remained in a range.

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Chart of the Week: Libor Pains

May 5, 2021

While Libor has slumped since 2018, Libor floors and direct lending spreads have remained in a range.

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Chart of the Week: Relatively Speaking

April 29, 2021

Returns for middle market loans are less volatile than their BSL counterparts, and higher, on average.

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Chart of the Week: Default Lines

April 21, 2021

Credit estimates, compared to credit ratings, have proven more beneficial to middle market CLO defaults.

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Chart of the Week: Midcaps on Upswing

April 15, 2021

While 2020 middle market CLO activity slid from the previous year, 1Q 2021 issuance has revived.

Read More

Chart of the Week: Alpha Bets

April 7, 2021

CLO asset and liability spreads move in concert, down now below pre-Covid levels.

Read More

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Features

Leveraged Loan Insight & Analysis – 5/10/2021

US$93.8bn of CLO issuance priced and closed in 2021 to date In another indication of robust leveraged loan market activity in 2Q, the CLO calendar continues to grow at a record pace. There has been US$148.4bn of US CLO volume recorded so far in 2021, split between US$54.6bn of new issues, US$53.3bn of refinancings and

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The Pulse of Private Equity – 5/10/2021

A good start to the year for public PEGs Download PitchBook’s Report here. The “Big Five” PE firms that trade publicly—Blackstone, KKR, Apollo, Carlyle and Ares—had an impressive start to 2021. PitchBook’s latest analyst note takes a close look at their Q1 2021 financials, which showed sustained momentum coming out of the pandemic late last year.

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PDI Picks – 5/10/2021

Remote due diligence is here to stay The challenges of life away from people and offices may have hindered private debt fundraising to an extent, but video meetings also have their supporters. Fundraising these days is a tough slog, right? Well certainly for private debt anyway, even if the still-surging private equity asset class managed

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Private Debt Intelligence – 5/10/2021

North America dominates Q1 2021 PD fundraising North America-focused private debt managers closed 19 funds, raising aggregate capital of $18.4bn in Q1 2021, more than the other three regions combined. In comparison, the next largest region, Europe, saw seven funds raise $5.6bn....

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The Pulse of Private Equity – 5/3/2021

PE a growing force in M&A Download PitchBook’s Report here. Private equity is accounting for a growing share of M&A transactions. PitchBook’s just-released Global M&A Report shows that PE deals made up about 37% of all acquisitions last quarter, continuing an upward trend from the low 20s less than a decade ago. Last year PE transactions

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State of the Capital Markets – First Quarter 2021 Review and Second Quarter 2021 Outlook

April 21, 2021

Review of Current Market Conditions/ Analysis of Capital Markets Metrics/ Review of Credit Quality/ Outlook for Second Quarter 2021

Special Report: SPACs – A Primer

March 31, 2021

Beginning in November 2020 The Lead Left published a series of articles on special purpose acquisition companies (SPACs). This report consolidates those articles.

Special Report: Private Credit – Better than Ever

January 28, 2021

Beginning in August 2020 The Lead Left published a series of articles on the state of private credit in a COVID environment. This report consolidates those articles.