European CLO Issuance
Issuance of European CLOs has reached a post-crisis high as jumbo investments in senior tranches have anchored issuance. European CLOs have seen year-to-date issuance of €14.7 billion across 36 deals, compared with the previous post-crisis high of €14.3 billion in 2014, when 34 deals were completed...
Add-ons retain commanding share of US buyout activity
At 64% of all US buyout activity through the end of September, add-ons have never before constituted such a lofty proportion of private equity investing. Part of that is a statistical quirk—as the volume of buyouts has slid while investors by and large maintained the pace of adding on, their relative proportion was bound to increase. But as has been noted time and again over the past couple years as the add-on percentage of...
Europe- and North America-Focused Real Estate Debt Funds
Real estate debt has seen considerable growth within European markets over the past few years and fundraising grew significantly from €0.5bn in 2012 to €4.3bn in 2015, while a further €3.7bn has already been secured in 2016 YTD. Nonetheless, North America-focused fundraising still dwarfs that of Europe, with funds already raising a record €12.3bn in 2016...
Downward flexes dominated in October
Downward flexes continued to dominate flex activity in October. There were 21 downward price flexes on first-lien institutional term loans in October and only 8 upward flexes. Both downward and upward price flexes were down from September which recorded 28 price cuts and 12 upward price revisions...
PE buyers still rooting for value in lower reaches of US middle market
The proliferation of private equity funds into all reaches of the US middle market has been well documented. Increased PE activity in the lower and core segments of the middle market is easy to see, particularly when assessing the median transaction size, which declined from a high in 2014 to $133.0 million last year and $128.6 million through the end of September. The slides aren’t dramatic, of course, but as can also be seen in the relatively more resilient proportions of PE dealmaking within the lower middle market...
Private Debt Dry Powder by Fund Type
The past few years have seen a large amount of investor capital in private debt funds remain unspent by fund managers, with strong fundraising activity resulting in a significant ‘wall of capital’. In 2016 so far, private debt dry powder has climbed to $199bn, up from $191bn at the start of the year, although levels of uncommitted capital have fluctuated across different fund types.
Dry powder held by distressed debt managers has risen by nearly a third (31%) since the end of 2014 and now stands at $63bn, the highest of any fund type...
U.S. CLOs posted their best month since June 2015 with issuance of $8.4 billion in October, taking year to date issuance to $54.5 billion. In addition to new issuance, much of the energy in October was focused on refinancings and resets in advance of the upcoming risk retention deadline. After the new regulation comes into effect on December 24, compliance with risk retention rules will be required for deals that refinance...
Secondary Buyouts Still a Primary Route for PE Sellers
335 secondary buyouts have been closed through the end of September, putting the year on pace to fall short of 2014’s tally of 482 but still third-highest of the decade. Given the impact of outliers, this year’s total secondary buyout value may not impress as much as much as those of 2007 or 2015, but it is still quite considerable. In short, private equity sellers are still utilizing fellow sponsors as an exit route nearly as avidly as they were in the past two years...
Europe-Focused Private Debt Fundraising
The Europe-focused private debt industry has enjoyed substantial fundraising success in recent years and many countries within the region have seen heightened alternative lending activity in the last decade. However, a notable decline in direct lending in 2016 YTD has contributed to a wider slowdown in fundraising activity focused on Europe throughout the year...
Credit investors, whether in cash or synthetics, often welcome corporate restructurings by distressed firms. Job cuts, rationalisation of operations and, in particular, asset sales are usually regarded as bondholder friendly actions.
But this 'wasnt the reaction when Banca Monte dei Paschi di Siena (MPS) announced plans to restructure its ailing business. The Italian bank said that it would reduce jobs by 2,500 – cutting 10% of its staff costs - and close 500 of its 2,000 branches over the next three years. MPS also declared that it would sell its payments processing unit for €520 million...