With the unofficial end of summer almost upon us, we thought it would be appropriate to take a look at what’s in store for the loan markets in September.
First, let’s examine total deal volume. Thomson Reuters LPC reports that year-to-date middle market LBO activity is on track relative to last year: $10.7 billion vs. $13.4 billion for the full three quarters in 2014. Large cap volume is lagging last year more significantly ($35 billion so far vs. $60 billion through 3Q 2014), thanks to a busy 2Q that skewed last year’s numbers.
The total pipeline of institutional loans on the docket for both middle market and broadly syndicated loans is on par with last year’s pre-Labor Day metrics, at $50 billion. That number was down, though, from a multi-year high of over $80 billion in the pipe earlier this summer.
Now let’s turn our attention to pricing. At the latest measure, LPC shows middle market all-in yields up slightly so far for 3Q at just under 6.25%, from around 6% the quarter prior. This has been consistent, give or take, with reported yields over the past three years.