BDC Magazine: Leveraged Finance

By BDC Reporter | Developments in non investment grade lending. Part of a BDC Reporter Magazine series.

Valuations dropped slightly but are still higher than average

High valuations and abundant use of debt continued to mark completed deal activity in the first quarter of 2018, according to GF Data. Two hundred …

Venture Capital

US Leveraged Loan Market Grows to Another Record in June: $1.05T

The U.S. leveraged loan market in June hit its sixth record amount in as many months, totaling $1.05 trillion, according to the S&P/LSTA Leveraged …

Market Pros: US Leveraged Loan Default Rate to Remain Low, but Creep Higher - LeveragedLoan.com

Portfolio managers of U.S. leveraged loans expect default activity to continue its modest ascent over the next 18 months, with the long-anticipated …

Titans of Junk:

Behind the Debt Binge That Now Threatens Markets<p>By Shannon D. Harrington, Sally Bakewell, Christopher Cannon and Mathieu Benhamou<p>Masayoshi Son and …

banks

US middle market loan pricing ticks up

NEW YORK, July 11 (LPC) - US middle market loan pricing is increasing at a slower rate than the larger US leveraged loan market, where assertive investors with more deals to choose from are winning concessions on pricing and documentation.<p>Capital remains abundant in middle market lending and fewer …

Investing

US Leveraged Loan Issuance Totals $274B in 2018's First Half - LeveragedLoan.com

Issuance of U.S. leveraged loans totaled $274.4 billion in 2018’s first half, down only 8% from the record $297 billion seen during the same period …

Leveraged Loans Margins on Track to Fall Below Pre-Crisis Lows

The leveraged loan market may not be in a bubble, but it sure looks frothy as spreads tighten to levels unseen since before the financial crisis.<p>The …

With Defaults Low and Oil Prices Rising, Distressed Debt Continues to Disappear

Thanks to a decade-long stretch of low interest rates, which has made it easier for troubled companies to kick the debt can further down the road, …

Leveraged Loans – Amid Continued Investor Demand, Second-Lien Issuance Surges

The leveraged loan markets in both the U.S. and Europe have seen a boost in the issuance of second-lien activity as institutional investors and …

Leveraged Loan Maturities Move Further Out on the Horizon

The U.S. leveraged loan market made headlines recently when it officially became a $1 trillion asset class, buoyed by the dizzying pace of issuance …

Lower Middle Market Too Hot to Touch

The M&A market as a whole remains white hot and the lower middle market is no exception. Sellers are undoubtedly benefiting from today’s strong …

Please don't tell individual investors to buy leveraged loans

Illiquid, opaque asset class meets ultra-liquid structure with constant liquidity. What could go wrong?

It’s Official: US Leveraged Loans Are a $1 Trillion Market

It’s official: The U.S. leveraged loan market is a $1 trillion asset class. As of April 27, the amount of outstanding institutional credits …

CLO Bondholders Unlikely to Help Managers Fix Libor Problem

CLO investors are likely to oppose having their payments pegged to the one-month Libor rate, which will crimp efforts by managers to ease the growing …

More Risk, Less Return: Spread vs Leverage on US LBO Loans

First-lien leverage on loans backing U.S. LBOs has crept to a record-high in 2018 as yield-starved institutional investors flock to these deals, …

Private Equity? It's More Like Pirate Equity

LBO sponsors will come under much-needed scrutiny as more of their debt-laden deals fall into bankruptcy and job losses mount.<p>Claire’s Stores filed for bankruptcy last week, one of a small but growing cadre of failed private equity-backed retail firms led most notably by Toys ‘R’ Us, which is now …

Soaring U.S. Libor Trickles Into Funding Markets Worldwide

From Riyadh to Sydney, short-term funding markets worldwide are starting to feel the effects of soaring U.S. dollar Libor rates.<p>The surge in recent …

US Leveraged Loan Default Rate Hits 3-Year High, Courtesy iHeart

The default rate of the S&P/LSTA Leveraged Loan Index jumped to its highest level in three years after iHeartMedia, one of the largest highly levered …

The End Is Near For The U.S. Credit Cycle. Are You Prepared?

<i>By Douglas J. Peebles</i><p>The US corporate credit cycle is nearing its end, and the cycle in parts of Europe isn't far behind. This can create treacherous …

Buyout feast expected as Trump alters debt rules

The next buyout boom may be ready to start.<p>A President Trump-appointed regulator last week lit the fuse on what some on Wall Street believe will …

Problem with rising rates: Corporate America has binged on debt

Corporate America, egged on by ridiculously-low borrowing costs, has built up more debt than any time since the end of the Great Recession.<p>The credit binge has allowed companies to grow faster, invest in the future and reward shareholders with huge dividends and share buybacks.<p>Yet elevated levels …

LPC: High demand helps US companies to cut leveraged loan pricing

NEW YORK, Jan 26 (Reuters) - The US leveraged loan market has opened with a bang, allowing junk-rated companies such as food packaging company Crown Holdings to reduce pricing further amid strong demand for floating rate assets.<p>Ba2/BB rated Crown Holdings had an investor count of more than 250 for …

Finance

Hot Loan Market Not Living Up to Promises

Wall Street has a long history of selling products that promise protection that inconveniently runs out just as investors need it. The hot leveraged …

Secondary Buyouts Dominate LBO Activity in Leveraged Loan Mart

Rallying stock markets and sky-high business valuations led cash-rich private equity firms to turn to other sponsors for acquisition targets in 2017. …

Citigroup Predicts That This Year Will Have a Record $140 Billion of CLOs

Citigroup Inc. analysts have come up with Wall Street’s most bullish forecast yet for 2018 collateralized loan obligation sales: a record-breaking …

Fed Working on Proposal to Ease Up on Bank Leverage Limits

The Federal Reserve is working to relax a key part of post-crisis demands for drastically increased capital levels at the biggest banks, according to …

The Great Credit Dilemma: When to Quit After Historic Rally?

After mopping up bumper returns from central bank stimulus for the best part of a decade, credit investors in 2018 look cornered.<p>On the one hand, …

Loan covenant quality hits weakest level on record: Moody’s | Financial Times

Investor protections in the $960bn US leveraged loan market deteriorated to the weakest level on record in the third quarter of 2017, according to …

The City