Why are SBOs more expensive? Download PitchBook’s Report here. Secondary buyouts have transacted at a premium versus non-SBOs since the financial crisis. That’s somewhat surprising; one might assume that “used” portfolio companies would trade at a discount given the operational improvements that have already been made, leaving less low-hanging fruit for the next sponsor. Not so…
Source: Cliffwater Direct Lending Index and BofA Merrill Lynch US High Yield Effective Yield The red line in the chart is the *Cliffwater Direct Lending Index (CDLI) current yield, which is based on the investment income of the underlying assets held by public and private BDCs. BDCs invest in middle market companies, and the Index…
Contact: Marina Lukatsky marina.lukatsky@spglobal.com
Leon Black sounds the alarm Apollo’s Leon Black made a few waves this week, warning that “the credit markets, unlike the equity markets, have gone to bubble status.” He said the amount of covenant-less debt available today is higher than it was in the run-up to the financial crisis. Bloomberg’s Lisa Abramowicz was right to…
MM cov-lite issuance of $22B YTD slightly behind 2017’s record high Year to date middle market covenant lite volume has reached US$22bn. This is only about 11.5% behind 2017’s all time record high of US$25.1bn, making 2018 the second highest year on record. Much of 2017’s strong momentum carried over into 2018 with 1H18 issuance…
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Source: LevFin Insights Source: LevFin Insights Source: Lipper Contact: Robert Polenberg robert.polenberg@levfininsights.com
Large EBITDA addbacks a feature of the leveraged loan market in 2018 Source: Xtract Research The deterioration in loan covenant protections has been well publicized this year, and another area that has drawn attention is EBITDA addbacks, which have gotten larger and more aggressive. Adjusted leverage levels have crept higher in 2018, with 30% of…