New issue first and second lien spreads are on the rise, though the differential is shrinking.
In a William Blair survey, 63% of lenders indicated they would consider cov-lite or cov-loose structures for issuers below $50 million in ebitda.
According to Proskauer Rose, the vast majority of its private credit clients are employing non-bifurcated unitranche structures.
The illiquidity premium earned by middle market loans over broadly syndicated ones has generally tightened, now at less than 70 bps, while all-in spreads have risen.
After a hot first quarter, fundraising for middle market vehicles has slumped a bit, though still on track for a strong year.
As all-in senior debt spreads have compressed, so have blended spreads for one-stop credit solutions.
Single-tranche senior debt financing volume and deal size rose sharply last quarter as direct lenders found traction with one-stop solutions.
With Libor higher than the historic 1% leveraged loan floor, the rationale for that rate subsidy is going away.
June saw the highest number of upward price flexes in the overall leveraged loan market in the past twelve months.
Sponsored loan activity in the middle market is running at a faster pace than last year; on pace for best year since 2007.