The global volume of cross-border leveraged loan transactions has topped $100 billion in the year to date, with some $102 billion of this activity seen so far in 2018, according to LCD.
Should the pace of this issuance continue, the market is set to top the $110 billion cross-border volume notched in 2017, which is the highest figure recorded in more than a decade. By this point in 2017, the market had hosted $90.3 billion of cross-border issuance — though it has to be said the launch pipeline for the remainder of this year is not looking overly full.
These figures highlight the fact that the global leveraged loan market has become increasingly interconnected over the last few years, as borrowers look to raise ever-larger sums, and generate global cash flows.
Much of this year’s cross-border activity has hit the market since the summer break, with 14 global transactions launched since the beginning of September — offering a balanced blend of both new-money buyout and M&A-related deals, as well as opportunistic repricings and amendments.
That said, cross-border deals are particularly well suited to large new-money acquisition situations and the structure has been used on most of the year’s banner syndications, such as debt backing the buyouts of Refinitiv and Akzo Nobel Specialty Chemicals. In such cases, the structure not only allows borrowers to better-match their liabilities with revenue, but it can also bring competitive tension to syndications, and therefore provide an overall more attractive funding package. – Nina Flitman/David Cox
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