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…
PE-backed exits trend down in size
For the second year in a row, the median private equity-backed exit in North America and Europe has trended downward in size across all three primary routes of liquidity. The typical corporate acquisition in 2016 cleared $138.1 million, a 13.7% decline from the $160 million notched in 2015. After the significant growth in median exit sizes from roughly 2013 to 2015, it is important to note that the numbers recorded in 2016 were still aligned somewhat with those seen in 2010 and 2011. Given that these figures are still relatively healthy on a historical basis...
Private Debt Management Fees Drop to Eight-Year Low
Fund terms within the alternative assets industry have been of particular focus over the last few years as investors have largely united to push managers for greater transparency and improved alignment of interest.
Within the private debt industry, this approach appears to be paying dividends with the average management fee reaching an eight-year low for 2016 vintage funds which charge a mean fee of 1.63%...
The attractiveness of the middle-market loan asset class is highlighted by its consistent premium over traditional high yield bonds.
Contact: Blake Udland Blake.Udland@spglobal.com
The political polling industry is suffering a crisis of credibility after failing to predict Brexit and Donald Trump's victory in the US presidential election. A thorough overhaul of its methods is surely needed.
But in a world where political risk is more potent than ever, investors have little else to go on, and polls still have the potential to trigger considerable market volatility. A prime example this week was France, where polls showed far-right - and anti-euro - candidate Marine le Pen increasing her lead in the first-round presidential vote. The reaction in the credit markets was significant - French sovereign CDS widened from 56bps to 68bps in the space of three days, and is now over 40bps wider than levels reached in the post-Brexit aftermath of September 2016...
According to Preqin, low interest rates is top factor affecting credit portfolios, with central banks and the US economy next.
In this special series on the outlook for leveraged lending for the year, we’ve looked at what our readers can expect for deal terms, including pricing, leverage, structures, and covenants. We’ve also closely examined the factors that will affect the supply and demand for transactions. Last week, we covered the future of credit quality. Finally,…
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 comprises of more than 6000 middle market loans - with 56% senior debt, 31% subordinate debt and 9% equity. The blue line displays the BofA Merrill Lynch US High Yield, which tracks the performance of USD denominated below investment grade corporate debt publically issued in the US. Increase in high yield depicts dislocations in market, pricing in higher risk...
Average Adjustments for PF EBITDA as % of Reported EBITDA M&A Loans Only Contact: Steven Miller smiller@covenantreview