Assets under management (AUM) increased in April for both U.S. CLOs and retail loan funds. CLO AUM edged up to $430 billion, while loan mutual funds & ETFs AUM increased to nearly $112 billion. Over the past year, CLOs and retail loan funds have experienced contrasting fortunes. In that time period, U.S. CLO AUM is…
Larger PE Funds Continue to Realize Gains at Longer Horizons From the one-year mark to the 10-year, the horizon internal rates of return (IRRs) of private equity funds worldwide gradually advance from 8.2% to 13.1%. Breaking down fund performance by size bucket yields further insights, most notably that on a sufficiently long time horizon, funds…
iTraxx net notional spikes post-ECB QE decision The prospect of the ECB buying up corporate bonds, potentially squeezing supply in the sector, has meant investors have looked for alternative ways to take on risk exposure. Markit iTraxx Europe Main index has seen its 5-yr CDS spread tighten to 77bps, from 91bps Net notional outstanding on…
U.S. PE firms pull back in Canada Last year saw a decade high of 201 U.S.-headquartered private equity firms invest in Canada, far outstripping the 129 domestic firms that were active in the same timeframe. Through the end of 1Q 2016, however, U.S. and Canadian PE firms are nearly evenly matched. This equalizing occurred as…
The share of unitranche financings in the Mittelstand leveraged loan market has risen to 22% of of total issuance on a deal count basis in the first quarter of 2016, an all-time high according to numbers compiled by Thomson Reuters LPC. Mittelstand is the middle market for the Germany, Austria and Switzerland region, comprising corporates…
April saw a continued positive shift in the difference between credit default swap (CDS) spreads and cash spread equivalent, known as the CDS-bond basis, among US dollar denominated corporate bonds. Calmer global markets and stronger oil and commodity prices encouraged continued recovery in battered bond prices in the oil & gas sector, with EQT Corp…
Lender Survey: Are you seeing cracks in your portfolio? Yes, we are seeing signs of cracks in credit quality in our portfolios, said roughly 42% of the nearly 400 attendees gathered at the Marriott in Times Square for Thomson Reuters LPC’s 4th Annual Middle Market Loans Conference last week. While these respondents said some companies…
U.S. PE-backed hold times in the middle market remain high Reflecting the decline in private equity-backed exit activity observed across the whole market in the first quarter of 2016, U.S. PE-backed exits in the middle market were also quite low, with only 170 sales for nearly $13 billion recorded. After the banner run PE sellers…
Japanese bonds rise despite BOJ disappointment Japanese sovereign bonds managed to deliver positive returns today, while almost every other asset class suffered from the Bank of Japan’s decision to reject further loosening of monetary policy. Japanese government bonds tightened by 3 bps today but corporate bonds saw risk surge Corporate bond CDS spreads jumped by…
Credit concerns have increased this year as defaults, while still low by historical standards, continue to move higher. The U.S. leveraged loan default rate ended the first quarter at 2.8%, up from 2% in the previous quarter, and up from 1% a year ago, according to Moody’s. In the first quarter, $7.3 billion of leveraged…