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Video: The latest Capital Markets View covers the main trends in the European leveraged finance market

Medical Depot, Murray Energy push US leveraged loan default rate to 1.43%

Leveraged loans: EBITDA add-back analysis finds projections often fall short

European high yield default rate to rise to 2.8% by June 2020 (S&P)

Healthcare players in leveraged loan sector keep watch amid 'surprise billing' battle


Video: The latest Capital Markets View covers the main trends in the European leveraged finance market

In the latest Capital Markets View video, LCD's Taron Wade and S&P Global's Chris Porter cover the main trends in the European leveraged finance market.

Discussed this month:

  • While M&A volume has been fairly chunky so far this year, overall loan supply has been lumpy, with January and April delivering especially low monthly totals. Looking ahead, there is a full pipeline packed with take-private and M&A transactions, including deals from Merlin Entertainments and Parques Reunidos.
  • There has been a more even balance between M&A/buyout and opportunistic deals in 2019 compared to last year, when M&A transactions dominated the picture. Opportunistic deals could come to the fore once the current slate clears.
  • On a rolling three-month average, primary spreads for euro single-B loans have tightened slightly over the last two readings.
  • CLO volume is running higher YTD than last year, at €20.2B versus €19.2B. As for spreads, triple-A pricing is steady on an average rolling measure, and amid some recent tight individual prints the arbitrage appears to be working for managers.
  • Bond yields are currently running higher than TLB yields, with the former asset class boosted by the ECB’s recent announcement on QE, and investor discipline here likely to be in the spotlight as the fourth quarter unfolds.
  • U.K. issuance is healthy despite the noise around Brexit. The country sits third in the league table (topped by France and the U.S.), accounting for roughly 11% of total loan volume — though that supply hasn’t given a commensurate boost to sterling issuance, which can carry a premium and is seen as less liquid.

More S&P Global video and audio resources are available here.

Taron Wade heads up LCD’s European Research efforts. Chris Porter is Head of Loan Recovery & CLO Business Development, S&P Global.

Please feel free to contact Chris if you’d like a particular topic discussed in next month’s video.

LCD is an offering of S&P Global Market Intelligence. S&P Global Ratings is a separately managed division of S&P Global.

 

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LCD comps is an offering of S&P Global Market Intelligence. LCD’s subscription site offers complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.