TheLeadLeft
Covenant Trends – 1/16/2017
Percentage of Loans with an MFN Sunset
Leveraged Loan Insight & Analysis -1/16/2017
Non-sponsored MM new money picked up in 2016; refinancings dropped
Non-sponsored lending dropped to US$86bn in 2016 from US$93bn in 2015. In contrast with every other major market segment (overall, leveraged, investment-grade, institutional, middle market sponsored) which witnessed a quarter over quarter increase in volume in 4Q16, non-sponsored middle market lending of US$22bn, was down 7%. Refinancings, the main driver of volume since the credit crisis, were down 21% in 2016 to US$53bn. Most of the refinancings were done in previous years and there was not that much in the form of opportunistic refinancings as pricing has somewhat stabilized in this market...
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A Year in Review (Third of a Series)
“How’s your pipeline?” we asked the head of one of the leading middle market arrangers in December. He shook his head. “The quality-adjusted deal flow is down.” That distinction resonated with a number of our middle market brethren. Complaints centered around ebitda adjustments, over-liberal debt allowance baskets, and covenant-lite (or covenant-wide) structures. “High leverage per…
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Lead Left Interview – David Petrucco, Ed Cerny, and Mark Gudis (Part 2)
This week we continue our conversation with David Petrucco, Ed Cerny, and Mark Gudis – founding partners of Backcast Partners Management. Backcast is a recently formed venture that focuses on providing direct debt and equity capital to middle market companies across industries. Second of two parts – View part one The Lead Left: So Mark, you’re in…
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The Pulse of Private Equity – 1/16/2017
Has US add-on activity peaked?
Last year, US private equity investors added on to extant holdings so frequently that the proportion of add-ons to all buyouts hit no less than 64%. The steady increase over the past six years, and especially the rapid surge of 3% even as overall activity fell, both speak to the increasing maturation of adding on as a PE investment strategy and its relative attraction in the current environment...
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Private Debt Intelligence – 1/16/2017
Private Debt Fundraising Success, 2012 – 2016
Although private debt fundraising in 2016 did not match the levels seen in previous years, Preqin research finds that a record proportion of funds exceeded their target size. However, the year also saw funds take longer to reach a final close, on average, than in any previous year as smaller managers struggle to attract capital at the same rate as the most experienced firms.
In 2016, nearly a quarter (23%) of private debt vehicles exceeded their target size by more than 125%, while a further 38% of funds achieved 101-124% of their target...
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Chart of the Week: Growing Gap
Large liquid loans have been hit with repricings, causing the illiquidity premium for the middle market to approach 200 bps – well above the historic average.
Loan Stats at a Glance – 1/16/2017
Contact: Timothy Stubbs timothy.stubbs@spglobal.com
Leveraged Loan Insight & Analysis -1/9/2017
2016 middle market syndicated loan issuance lowest since 2009
Middle market syndicated loan issuance only reached US$139bn in 2016, down 3% from 2015 levels and the lowest annual level tracked since 2009. Several factors drove the lower levels. The non-sponsored market was the biggest culprit as issuers had no incentive to hit the market to refinance as long term financings were locked in during previous years. Furthermore, slow growth and uncertainty surrounding the economy and macro events such as...
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