Whitecaps in Large Caps

Issuers in leveraged lending today are divided into three categories: the haves, the have-nots, and the wish-they-hads.

As the 2019 loan calendar heads into its final six weeks of activity, the differences between the first two categories are becoming more pronounced.

In the broadly syndicated market, as we covered last week, the combination of triple-C anxiety among CLO managers and cash out-flow worries with retail funds have impelled a flight-to-quality. Better rated issuers in defensive sectors are the haves; challenging “story” credits are only getting done with investor-friendly tweaks...

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Quote of the Week

“There is a disconnect between where the market is going and where the economy is heading.” – Alessio de Longis, senior portfolio manager, Invesco.

Featuring Charts

Chart of the Week: The Price Isn’t Right

November 5, 2019

The volume of middle market spread flex-ups at $2.2 billion was the highest in four years.

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Chart of the Week: Adds Up

October 28, 2019

The number of add-ons is more than buyouts, as private equity strives to improve investment returns.

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Chart of the Week: Off the Peak

October 23, 2019

Valuations have trended up over the past decade, but the number of M&A transactions has slowed.

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Chart of the Week: Lost Articles

October 16, 2019

After a strong fourth quarter last year, quarterly US M&A volume has slowed.

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Chart of the Week: No Climate Change

October 9, 2019

Despite lower rates and higher spreads, CLO formation is on track for a good year.

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Chart of the Week: High and Tight

October 2, 2019

SOFR has hovered around LIBOR, but spiked when repo rates jumped last month.

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Features

The Pulse of Private Equity – 11/4/2019

Manufacturing exits are way down We covered China-driven M&A last week, noting that activity has taken a nosedive this year. Chinese acquirers aren’t buying many American companies at the moment, thanks in part to the broader trade war. According to a newly released report from PitchBook and RSM, however, PE is having a rough time

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Private Debt Intelligence – 11/4/2019

Infrastructure Debt Reaches Momentum Debt providers in more specific sectors have started to take the place of traditional lenders, as for example in the infrastructure industry. Banks are no longer the main source, and investors are moving towards funds to gain access to the capital structure. Infrastructure debt fundraising has had peaks and troughs over

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Leveraged Loan Insight & Analysis – 11/4/2019

Average US second-lien secondary bids at lowest levels since 2016 US second-lien loans have traded down considerably in the secondary market over the past few months. The last round of risk-off behavior by secondary market loan players sent second-lien bids as low as the 87.01 level on October 18th, over a five-point decline from the

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Leveraged Loan Insight & Analysis – 10/28/2019

Total leverage on large corporate US LBO loans remains high in 4Q19, but senior leverage declines At a time when investors have been pushing back on pricing and structure on riskier loans, total leverage on US LBO deals remains high. So far this quarter the average total debt to EBITDA level for large corporate LBO

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The Pulse of Private Equity – 10/28/2019

China-driven M&A isn’t happening this year Download PitchBook’s Report here. North American M&A activity involving Chinese buyers has fallen off a cliff this year. That’s not a complete surprise, but it’s not often you see such swift drop-offs without something alarming going on. According to PitchBook’s just released North American M&A Report, China-driven M&A is on

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Special Report: Private Debt – Search for Transparency

October 24, 2019

In June 2019 The Lead Left published a series of articles on private debt. This report consolidates those articles.

State of the Capital Markets – Third Quarter 2019 Review and Fourth Quarter 2019 Outlook

October 17, 2019

Review of Current Market Conditions/ Analysis of Capital Markets Metrics/ Review of Credit Quality/ Outlook for Fourth Quarter 2019

Special Report: Covenantive Easing

September 5, 2019

In May 2019 The Lead Left published a series of articles on covenant trends. This report consolidates those articles.