Thomson Reuters

Leveraged Loan Insight & Analysis - 5/22/2017

Middle market lenders struggling to find yield in 2Q17 Middle market lenders with a minimum spread requirement of 500bp and above are most likely struggling to find assets in the syndicated loan market that meet their return requirements. So far in 2Q17, 77% of middle market sponsor-backed loans to hit the syndicated market have a

Leveraged Loan Insight & Analysis - 5/15/2017

BDC performance wavers in May on the back of mixed earnings The upward march of BDC share prices in 2017 seems to have come to a halt in May on the back of mixed earnings announcements for 1Q17. Rising non-accruals, earnings misses, heavy prepayments, declining yields, tough market conditions and extreme competition are all...

Leveraged Loan Insight & Analysis - 5/8/2017

Lender Survey: Compared to the historical average, loan recoveries will be: Many investors have a wish list for rolling back structural deterioration with, not surprising, bringing back covenants with clean historical EBITDA definition meaning capped add-backs and no inclusion of projected results or cost savings at the top of the list. Although a lower spread

Leveraged Loan Insight & Analysis - 5/1/2017

What is the most likely catalyst for derailment? 41% of the audience polled last Thursday during Thomson Reuters LPC’s Fifth Annual Middle Market Loans Conference pointed to competitive pressures leading to structural and yield deterioration as the most likely catalyst for change or derailment in the market. However, one third pointed to geopolitical risk, which

Leveraged Loan Insight & Analysis - 4/24/2017

Share institutional term loans yielding less than 5% drops to 53% in 2Q17 from 68% in 1Q17 Primary yields, while still at low levels, have inched up so far in April. The average primary yield assuming a three year term to repayment on first-lien institutional tranches is 5.03% so far in April, up from 4.61%

Leveraged Loan Insight & Analysis - 4/17/2017

CLO issuance is on track to meet or exceed market forecast in 2017 One third of loan arrangers, CLO arrangers and managers surveyed by Thomson Reuters LPC expect CLO issuance could reach or exceed $70bn this year. But challenges remain including a lack of new issue supply and complying with risk retention. Amidst the ongoing

Leveraged Loan Insight & Analysis - 4/10/2017

Cross border financings gain momentum as thin EMEA pricing attracts leveraged issuers

In a turn around from 2012-2013 market trends whereby European issuers tapped the US loan market in a bid to lock in thinner margins, a number of US leveraged issuers have turned to the European market early in 2017, to secure thinly priced deals. In contrast to the rising interest rate environment in the US, the European market is expected to keep interest rates low in the near term...

Leveraged Loan Insight & Analysis - 4/3/2017

1Q17 M&A volume down 32% year over year as market waits on policy guidance out of Washington

M&A loan issuance declined dramatically year over year to log less than US$70Bn in 1Q17, down 32% compared to the year ago results (US$102Bn). This represented the lowest quarterly results since 1Q13. Although some of the market shortfall on a percentage basis should be qualified in that jumbo financings for Avago Technology and Kraton Polymers which were completed in 1Q16 were in fact structured in 2015, the market took a very real pause in 1Q17 as issuers waited on the new administration in Washington...

Leveraged Loan Insight & Analysis - 3/27/2017

LBO purchase price multiples averaged 9.6 times in 1Q17

After averaging over 10 times for the past three years, the average purchase price multiple on LBO deals dropped to 9.6 times in 1Q17. A high concentration of smaller deals and a more diverse industry composition of LBOs in 1Q17 is a driver of multiples coming down so far this year. But lenders should not get accustomed to this trend. Lenders and sponsors confirm that lofty valuations continue to remain a major roadblock holding back a robust buyout environment this year...

Leveraged Loan Insight & Analysis - 3/20/2017

Leverage on institutional middle market deals climbs on new money deals in 1Q17

Interest in middle market loans from large corporate investors tends to wax and wane based on market conditions, but currently investors are super receptive to these smaller credits given a supply demand imbalance in the leveraged loan market. As a result, leverage levels on institutional middle market deals are rising in 2017 across most deal purposes. Leveage on dividend recap deals peaked in 2013 at 5.3 times and was in decline through 2016 down to 4.3...