How Big is the Middle Market? (First of a Series)

As great mysteries of life go, it’s not quite in the same category as what’s the universe made of, how does gravity work, or what ever happened to tan M&Ms. But for those who make it our career home, one of the most often-asked and vexing questions over the years has been, how big is the middle market?

It feels like something that should be answerable. As our Chart of the Week depicts, the outstanding total of all US leverage loans is well-established at around $925 billion. One would think it a simple matter to separate out smaller loans from that data set.

Unfortunately there are several hurdles. First, there’s no consensus on what constitutes the middle market. As a loan conference veteran, we’ve witnessed midcap panelists each proffering different definitions.

The top loan research agencies themselves aren’t in agreement. S&P LCD defines middle market issuance as borrowers with ebitda of $50 million or less. But because private equity sponsors are reluctant to publish borrowers’ financial information, only a minority of companies can be accurately ranked.