Private Credit & Middle Market CLOs
Private Credit And Middle-Market CLO Quarterly: Shelter From The Storm
(Q1 2024)
Along with record U.S. middle-market (MM) collateralized loan obligation (CLO) issuance and corresponding growth in our number of credit-estimated companies, 2023 saw record credit-estimate downgrades, driven by a steep rise in benchmark rates of about 500 basis points (bps) during the year. Although credit-estimated companies have initiated cost-cutting measures and brought in efficiencies, higher interest costs continue to depress margins and pose liquidity challenges.
We expect to see continued downgrades and selective defaults on credit-estimated companies in 2024. However, we think the downgrade momentum is likely to slow down this year, with more certainty around rates and execution of asset sales and transactions during the year. For recurring revenue loan issuers, downgrades outpaced upgrades by about six-to-one in 2023. Recurring revenue loans represent about 5% of our current credit estimates, with more than 75% of these having a credit estimate score in the ‘ccc’ range.
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U.S. CLOs & Leverage Finance
U.S. Leveraged Finance Q4 2023 Update: Possible Early Spring For Earnings Growth, But Cash Flow Credit Measures See Their Shadow
S&P Global Ratings has observed that credit metrics vary widely within and across rating categories, so statistical measures such as averages and medians provide only a partial picture. Accordingly, in this report, we focus on our rated entity (issuer) counts to analyze the third-quarter 2023 earnings growth improvement. Additionally, we delve deeper into industries experiencing the most earnings pressure or improvement. We focus on EBITDA and EBITDA margins as our earnings proxies.
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February 22, 2024
Calling All CLOs! Or Not? Assessing The Potential Volume Of CLO Refinances And Resets
February 16, 2024
U.S. BSL CLO And Leveraged Finance Quarterly: Have We Turned The Corner Yet? (Q1 2024)
February 8, 2024
PIK Refinancing: A Little Room To Breathe, Or One Step Closer To The Edge?
Nov 30, 2023
Managers Matter: Active Management Of U.S. BSL CLOs During Uncertain Times Shows Its Value
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Leveraged Finance: U.S. Leveraged Finance Q3 2023 Update: The Lowdown On High Interest Rates
October 11, 2023
CLO Spotlight: U.S. BSL CLO Top Obligors And Industries Report: Third-Quarter 2023
Please join us for a live interactive webinar on February 1, 2024, at 10:00 AM ET where our senior analysts will discuss our 2024 rating, credit, and sector outlooks for U.S. Leveraged Finance and CLOs.
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Europe CLOs & Leverage Finance
Why European Leveraged Loan Borrowers Like The “Snooze Drag”
European leveraged loan borrowers could increasingly use a "snooze drag" workaround in their loan documentation to extend loan maturities more easily amid higher interest rates and an upcoming maturity wall.
While snooze provisions can provide borrowers more flexibility to refinance debt, they do not necessarily aid credit quality.
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January 23, 2024
December European Summary Report: Leveraged Finance
November 16, 2023
Credit FAQ: Is There A Middle Ground For European Middle Market CLOs?
November 16, 2023
European Secured Debt Recovery Expectations Q3 2023 Update: Recovery Prospects Stable As Issuance Slows
October 26, 2023
Credit FAQ: How We Analyze Credit-Linked Notes Referencing Credit Derivative Definitions And Documentationy
September 28, 2023
CLO Pulse Q2 2023: The 'Snooze Drag' Takes Hold In Europe
September 6, 2023
European CLOs: The Long Road To Amortization
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