Bid/Ask spread finally narrows to 2 points but still historically high The average bid/ask spread in the overall US secondary market finally narrowed to 2.01 points yesterday after peaking at 3.52 points on March 27 and hovering above 2 points for 3 months. Previously, the bid/ask spread fell below 3-point mark on April 27 after hovering above 3 for a month and it’s been on a slow…
US CLO portfolios: average loan trades fell 7 to 13 points in March and April In the wake of the spread of COVID-19, as secondary loan prices plummeted, average US CLO portfolio trade prices fell between 7 and 13 points in March and April. By the end of April, sales prices were still declining, having…
Libor floors are back in the institutional market Investors are demanding Libor floors on institutional term loans as the Libor rate continues to drop. While 3-month Libor has been in a declining trend since 1Q19, it has plunged since the COVID-19 crisis hit. The average 3-month Libor rate has dropped to 0.67% so far this…
Middle market lenders weigh in on the percent of issuers that will miss P&I in June? Now that we are in June, middle market lenders are highly focused on how issuers will react at the June 30th principal and interest payment date. While making P&I payments at March was a very stressful experience for many,…
Primary yields in the US institutional loan market tighten in May After spiking in April, primary US institutional yields have tightened in May, but remain at very high levels. The average yield, assuming a three-year term to repayment on first-lien institutional term loans is 8.15% in May, down from 9.45% in April. That month, issuers…
MM Sponsored dealflow pipeline expected to remain anemic through summer Middle market syndicated loan issuance remains extremely thin for sponsor-backed deals so far in 2Q20. Volume has only reached about US$1.6bn so far in 2Q20 with zero opportunistic flow such as refinancings or dividend recaps. Anecdotally, lenders indicate that the M&A pipeline is extremely thin…
Pricing, OIDs also widen for double B issuers in today’s market Pricing for double-B rated issuers has widened significantly this quarter. The average yield, assuming a three-year term to repayment, on first-lien institutional term loans for BB rated issuers is 6.19% so far this quarter, up from a much lower average of 3.94% in 1Q20….
Avg. bid on Refinitiv’s BDC Visible Loans Benchmark remains at the 80 context Loans held by business development companies with mark-to-market pricing have stabilized in the 80 context in the last few days. Refinitiv’s BDC Visible Loans Benchmark provides investors with a daily mark on roughly US$20bn in first and second lien loans held by…
Retailers expected to file Chapter 11 in the coming weeks as loan bids drop between 46%-66% this year The retail sector, hit hard by the coronavirus economic shutdown, has seen a flurry Chapter 11-related activity in the last several weeks. Last week, 24 Hour Fitness hired a restructuring advisor, while JC Penny, forced to close…
COVID-19 hits unitranche issuance in 1Q20 After growing for three straight quarters and hitting an all time record high in 4Q19, unitranche volume took a steep hit in 1Q20. Total U.S. unitranche issuance fell to US$11.5bn in 1Q20, down 35% from 4Q19’s record high of US$17.5bn. The “mega tranche” trend that exploded in 4Q19 at…