Success is a balance of offense and defense. Deploying capital efficiently means sourcing top performing assets – financings to superior corporate borrowers backed by (in sponsor-backed businesses) top-tier private equity firms. Once in the portfolio those companies and their financing structures need to withstand any micro or macro threats. Critical to smart investing is close […]
The relative attractiveness of alternative asset classes has shifted significantly over the past few years as interest rates have risen and the economy become much less certain…. Login to Read More...
Loan participants see higher defaults from 1.6% today, but not much higher. Source: PitchBook/LCD(Past performance is no guarantee of future results.)
Understanding the connection between business and structural risks is one of the keys to successful credit investing. “Good company, bad balance sheet” is how opportunistic credit managers describe troubled but attractive situations in which to invest. It’s helpful to examine these transactions for clues as to how the borrower got a bad balance sheet to…
Identifying likely buyout take-private targets Download PitchBook’s Report here. Since the inception of the strategy in the 1980s, buyout managers have maintained a core playbook: Invest in relatively small, underperforming companies at a reasonable price that still generate enough free cash flow (FCF) to service an increased debt burden…. Login to Read More...
Drowning in debt: TMT sector braces for wave of Chapter 11 filings Signs emerged last week in the US of difficult times ahead, as 10 companies filed for Chapter 11 bankruptcy protection, including four in the technology, media and telecoms (TMT) sector. The activity marked a step up from 1Q24, which saw three Chapter 11 filings by other…
Percentage of Loans with an MFN Sunset (Past performance is no guarantee of future results.) Contact: Steven Miller smiller@covenantreview.com
US sponsored middle market direct lending volume fell by 10% in 1Q24 Overall sponsored middle market loan volume fell by 6% to US$31.7bn in 1Q24, though it still represented a 46% gain year-over-year. Breaking out this activity, direct lending deal flow amounted to US$22.8bn in 1Q24 versus US$8.8bn of syndicated deals…. Login to Read More...
How Does the Default Outlook for the Middle Market Compare to BSL? Download FitchRating’s Report here. The default rate for loans in Fitch’s U.S. Leveraged Loan Universe was 3.3% at the end of 2023, in line with our forecast of 3.0%-3.5% and up from just 1.6% the previous year…. Login to Read More...
Refinancings redefine the direct lending market, claim 36% share in 1Q24 TTM Default Volume, Count Refinancings claimed 36% of 1Q24 direct lending volume in the US, the largest share of all proceeds, and the second-largest quarterly share for refinancings, behind the 41% in third quarter last year as tracked by KBRA DLD. Prior to 3Q23,…