Animal Farm

2018 will be a good year for loans. We know because, according to the Chinese calendar, we will soon begin the Year of the Dog. Seems dogs are auspicious animals. And the last YOD was 2006, an excellent loan vintage. Well, at least for issuers.

The Travel China Guide had this to say: “If a dog comes into your house, it symbolizes the coming of fortune.” If a dog comes into our house, it symbolizes someone leaving the front door open. But we’ll take good luck any way we can get it.

Our own pet project last week was catching up on market reviews for 2017 (Year of the Rooster). Besides the refrain of bad structures (with many comparing deal pipelines to a dog’s breakfast – messy and noisy), everyone had the same message: there was a lot of lending last year.

A few numbers to chew on: Thomson Reuters LPC reported $2.5 trillion in both investment and non-investment grade issuance. S&P LCD tracked $940 billion of both M&A ($400 billion) and repricings ($540 billion). Finally, LevFin Insights highlighted $984 billion in total institutional volume.