Par for the Course

Despite our known deficiencies on the links, we were invited last week to a superb round of golf with other direct lending professionals at a course in Summit, NJ.

‘Superb’ because we walked away with ‘closest-to-the-pin’ honors. Though in fairness, 48 feet, eight inches is hardly close to anything. And we didn’t even make the par putt. Then our partners carried us to the ‘best-foursome’ score. Pro forma adjusted.

Nineteen holes is also plenty of time to dissect goings-on in leveraged loans. There was wide agreement that both terms and structures have become as issuer-friendly as at any time in a decade. And while sponsors are supporting buyouts with plenty of equity, toppy leverage and weak covenants aren’t always applied to the best credits.

As far as activity goes, most shops reported a remarkably busy August. “I don’t know where the summer went,” one midcapper lamented. “We usually see a slowdown about now, but it’s not happening. Not that the quality is all that great.”