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Leveraged Finance 2012 Outlook

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  • 1. LEVERAGED FINANCE 2012 Review2013 outlook January 2013
  • 2. 01.03.13 www.bloombergbriefs.com Bloomberg Brief | Leveraged Finance 2Contents 2012 IN REVIEWhigh-yield bond in U.S. credit qual- actions. Issuance by MONTH Eventoutlook ity, as measured by sector. Page 14-15.Analysts and inves- CDS. Page 10. CVC Capital Partners agreed to buy Resource America’s leveraged-loantors make their fore- interactive investments unit in a move to expand in the U.S.casts for this year. Total returns loan maturity JANPage 3. by sector calendar CDS prices indicate 91 percent chance of TXU default in the next three The best and worst Sort upcoming loan years.leveraged loan performing industries maturities by indus- JPMorgan raises its estimate for 2012 junk bond returns to 13.7 percent fromoutlook and rating segments try sector. Page 16. 9.4 percent. BAML expects returns of 12.3 percent, Barclays holds with 5-7Investor calls for this in 2012, compared percent, saying Greece is still grappling with fiscal challenges.year’s loan and CLO with the previous U.S. Loan Price FEBmarkets, including three years. Page 11. Trends Avoca Capital Holdings, a credit manager overseeing 6 billion euros, can- celed a plan to list a senior loan fund on the London Stock Exchange.detailed predictions Average margins, Li-from the sell side. european high bor floors, discounts. Apollo and a consortium buy El Paso’s E&P operation for $7.15 billion, thePage 4. yield Page 17. largest LBO of 2012. Triple C rated is- MARBiggest junk suance dominates EUROPEAN LOANS European high-yield companies tap the U.S. bond market at a record pacebonds of 2012 2012 volume. Average margins, as investors funnel unprecedented amounts of cash into dollar-denominatedThe largest transac- Page 12. discounts. Page junk-debt funds and the sovereign crisis restricts bank lending in the region.tions of the year. 18-19. T Rowe Price closes two junk-bond funds amid a surge in demand for higher-Page 6. u.s. leveraged yielding debt. loans APRBest/worst CDS Top 20 leveraged Lower-rated companies, including airline lessors, start issuing bonds to meetThe biggest improve- deals; biggest divi- heightened investor demandments and declines dend, cov-lite trans- Moody’s raises Ford to Baa3 from Ba2, following Fitch’s upgrade from junk status in April. Ford regains control of its logo and other assets pledged as collateral to obtain a $23.4 billion loan to keep the business going in 2006. MAY 3i Debt Management acquires about 2 billion euros of CLOs from Invesco as Bloomberg Brief Leveraged Finance it seeks to expand in Europe and the U.S. Bloomberg LP 731 Lexington Avenue, New York, NY 10022 Atlantic Broadband secures the year’s first dividend pre-cap financing. 212-318-2000 JUN American Casino & Entertainment Properties postpones a $310 million bond Newsletter Ted Merz due to market conditions. Engility pulls its $250 million senior notes offer, Executive Editor tmerz@bloomberg.net WideOpenWest Finance delays a $1 billion bond to make covenant changes. 212-617-2309 Thomas H. Lee Partners’s credit unit acquires a $2.5 billion debt manager Bloomberg News Robert Burgess from McDonnell Investment, joining private-equity firms expanding lever- Managing Editor bburgess@bloomberg.net aged loan holdings. JUL 212-617-2945 Alpha Natural Resources begins negotiations with debt-holders to gain relief Leveraged Finance James Crombie on covenants as coal prices slump. Newsletter Editor jcrombie8@bloomberg.net GoldenTree Asset Management raises a CLO of about $590 million that 212-617-3590 allows for as much as a 40 percent investment in second-lien loans and Reporter David Holley high-yield bonds. dholley8@bloomberg.net AUG 212-617-1311 High-yield bond funds in the U.S. attracted $597 million from European inves- tors in the week to Aug. 22, the most since February. Contributing Analysts Lara Deke Agustina de Marotte U.S. high-yield bond market sees biggest ever monthly issuance volume. Jesse Knapton Jamie Dranoff Reynolds is the single biggest deal, at $3.25 billion in size. Afrim Zeka Lee Zeltser SEP Ben Zimmerman Michael Kovacs U.S. state and county pension funds expand their search for yield beyond junk bonds into the less liquid middle market loans. Newsletter Nick Ferris Covenant-lite leveraged loan issuance as a percent of the total market Business Manager nferris2@bloomberg.net surges to a record high, at 25 percent of outstanding loans, JPMorgan data 212-617-6975 show. OCT Advertising bbrief@bloomberg.net Caesars Entertainment, the casino operator saddled with $22.7 billion of debt, 212-617-6975 will need to restructure its borrowings, according to CreditSights. Reprints & Lori Husted Permissions lori.husted@theygsgroup.com The default rate on leveraged loans is forecast to rise as soon as 2013 as 717-505-9701 companies take on more bank debt, according to Morgan Joseph TriArtisan. NOv To subscribe via the Bloomberg terminal type BRIEF <GO> or on the web at Investors place record volume of bearish bets on junk bonds by shorting www.bloombergbriefs.com State Street’s exchange-traded fund that owns the notes as the debt lost value for the first month since May. This newsletter and its contents may not be forwarded or redistributed without the prior consent of Bloomberg. Please contact our reprints and permissions Daily corporate bond trading volume hits 0.29 percent of face value, the low- group listed above for more information est by proportion of outstanding debt since 2005. DEC © 2013 Bloomberg LP. All rights reserved. Leveraged loan volume exceeded $315 billion, more than 2011 levels and the most since $388.3 billion was issued in 2007.  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 
  • 3. 01.03.13 www.bloombergbriefs.com Bloomberg Brief | Leveraged Finance 3high-yield bond outlookLoosening Standards, Falling Returns: Watch Out for Blowups in 2013After last year’s record junk bond issuance volume and robust returns in both the U.S. and Europe, investors and strategists are cautiousabout the 2013 outlook for high yield. Lower-rated credit is most at risk and the asset class may be poised for its first loss since 2008.What is the outlook for high-yield bond returns and issuance this year? Gershon Distenfeld AllianceBernstein Senior Vice President “The quality of the issuance is starting to deteriorate and this has the potential to accelerate in 2013. I don’t think that many investors are paying enough attention to covenants and other deal structure characteristics such as call protection. When you have a market that’s starving for paper, investors tend to loosen their standards, especially in a market where it seems as though every deal is five times oversubscribed. This is not the type of environment where you want to stretch for extra return because you’re not compensated for the inherent risk. We’re underweight triple Cs and staying that way. We don’t see a lot of value there. There is still a decent amount of debt that is becoming callable for the first time in 2013, so we will still see some volume but it will likely be off from the torrid pace of the past few years.” Marty Fridson FridsonVision CEO “The consensus forecast is return close to the coupon level, which in practice has rarely happened. The histori- cal record indicates that there has been a 91 percent probability that the return will be outside the range of the coupon, plus or minus 200 basis points. It looks very unlikely to be on the upside. I think we’re looking at a sub-average year, possibly going into negative territory, with the Treasury outlook be- ing a factor. High yield has tended to return worse than Treasuries when it’s as over-valued as it is. We’ve been through five months that the spread has been tighter than fair value, and it seems unlikely that we go through another 12 months.” Sabur Moini Payden & Rygel Portfolio Manager “I don’t see yields going much lower. With the yield close to 6 percent, high yield isn’t probably going to do a lot better than that. It’s tough to say we’re bullish on high yield right now because it’s had such a good run over the last three or four years. [2013] will be more of a credit picker’s market. [This] year is going to be a market where there are a few blowups. Right now, you’re not getting paid to go into CCCs or CCs. I’d rather own a single B at 6 percent than a CCC at 7.5 percent. BBs are pretty tight. CCCs you can get more yield, but again there is a lot more default risk and volatility. I think you can still have a good year, it’s just not going to be a 13, 14, 15 percent type year. To say this market will generate a flat return next year, it seems a little implausible. Could it be below 7 percent? Sure.” Michael Henry Anderson Citi Credit Strategist “You basically have had this big rally in middle-of-the-road assets, whether it’s investment grade, double Bs, single Bs. Yields are just so low that those assets are going to get hit pretty hard if we get volatility or a move in one direction. As long as the Fed is successful in keeping rates low and growth is moderate, those assets will do OK but volatility is a big risk. One source we might get some net supply from is fallen angels. There are some large fallen angels out there that investors might find in their benchmarks next year. There’s a lot of interest in the loan market, given the fact that yields on high yield are at all-time lows. At some point loans are going to outperform. We just don’t think it’s going to happen in 2013. With 80 percent of the loans above 99, you’re not going to get that multi-point pop in a whole lot of loans.”  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 
  • 4. 01.03.13 www.bloombergbriefs.com Bloomberg Brief | Leveraged Finance 4leveraged loan outlookLoans May Outperform, Investors Say; CLO Issuance Forecast to Rise AgainLeveraged loans may provide better returns next year than high-yield bonds, according to investors. The middle market is expected tosee issuance activity, while CLO issuance is forecast to grow after a revival in 2012.What is the forecast for returns and issuance of loans and CLOs in 2013? Erik Falk KKR Co-Head of Leveraged Finance “If five-year Treasuries back up 100 basis points, then loans have a very good chance of outperforming bonds. The Fed doesn’t have to move short-term rates for the market to believe longer-term inflation will come out. The space whch I believe will have a decent amount of activity is the middle market. A lot of those companies have not gone through the extension process of their current debt. The difference is that you put it in the tens of billions, not the hundreds of billions.” Beth MacLean Pimco Portfolio Manager “If absolute spreads get too tight I think you’ll start seeing waning investor interest. Definitely the CLO arb gets really difficult if spreads get much tighter than we’ve seen in the last couple weeks. I hope it puts a floor on how much we can see in terms of refinancing and spread tightening. On a relative basis we still think loans are going to be a pretty attractive option for people looking for yield in 2013. I think it’s a matter of the PE guys finding the right opportunity and right now there just doesn’t seem to be a tremendous amount of M&A backlog in the pipeline unfortunately. But I think the market would embrace that.” Greg Stoeckle Invesco Portfolio Manager “2013 marks a year where a large component of the pre-crisis CLOs hit the end of their reinvestment periods. While you have new capacity being created through new CLOs, you’re going to have capacity taken out of the market as the legacy CLOs begin to go dormant. I think that’s a very interesting dynamic that will help shape the market in 2013. The CLOs running off, shrinking in size will create capacity for new CLOs, but I think it also creates balance in the supply-demand dynamic of the market as well. I think $50 billion is eminently doable for next year.”2013 Sell Side Analyst Predictions bonds LOANS Issuance Return Default Rate Spread ISSUANCE RETURN DEFAULT RATE SPREAD CLOSBAML $275bn 7.20% 2.50% 475bp $350bn 6.30% 2.50% 490bpBarclays $275-300bn 4-6% 3.50% $225-250bn 3.5%-5.5% 2.5%-3.5% $60-75bnCiti $325-350bn 7% 2.50% 475bpCredit Suisse $330bn 7% 1%-2% $230bn 5.50% 1%-4%JPMorgan $275bn 7-8% 2.00% 560bp $300bn 5-6% 2.00% 475bp $65-70bnMorgan Stanley $283bn 3.10% 3.60% 577bp $299bn 5.00% $60bnRBS $315bn 9%Deutsche Bank $290bn 7-8% 3-3.5% 450bp $300bn 7-8% 425bpWells Fargo $350bn 6-7% 3.25% 500bpUBS $300bn 7.50% 1.5-3% 500bp2012 $350bn 15.6% 3.2% 550bp $300bn 10.5% 1.30%  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 
  • 5. 01.03.13 www.bloombergbriefs.com Bloomberg Brief | Leveraged Finance 5U.S. BondsYield to Worst Hits All-Time Low; Bond Issuance Volume at Historic High 25.00 2500 Spread To Worst Yield to Worst 20.00 2000 Spread To Worst (bps)Yield To Worst (%) 15.00 1500 10.00 1000 5.00 500 0.00 0 1/3/97 3/13/98 5/28/99 7/28/00 9/28/01 11/29/02 1/30/04 4/15/05 6/16/06 8/17/07 10/17/08 12/18/09 3/4/11 5/11/12 Source: Bloomberg High-Yield Bond Volume Sets New Record $m Month-to-Month Issuance 60 100 350000 Total Volume # Deals Closed $354bn 90 Total Issuance Volume USD Billions 300000 50 80 250000 70 40 60 200000 2012 2011 2010 30 50 150000 40 20 30 100000 20 10 50000 10 0 0 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec J-10 A-10 J-10 O-10 J-11 A-11 J-11 O-11 F-12 M-12 A-12 N-12 Source: Bloomberg Source: Bloomberg Bloomberg Brief publishes 18 groundbreaking daily and weekly newsletters. For the full list of titles visit www.bloombergbriefs.com or BRIEF <GO> on your Bloomberg terminal BRIEF  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 
  • 6. 01.03.13 www.bloombergbriefs.com Bloomberg Brief | Leveraged Finance 6U.S. BondsThe 20 Biggest U.S. High-Yield Bond Deals of 2012 Announced Amount Issued Issuer Underwriters Coupon Tenor Use of Proceeds Date ($bn) 9/14/12 REYNOLDS GROUP $3.250 CS 5.750% 8.16 Repay/Refinance Debt 11/8/12 SPRINT NEXTEL CORP $2.280 BAML/BARC/CITI/DB/GS/JPM 6.000% 10.15 Repay/Refinance Debt 11/27/12 ROYAL BK SCOTLND GRP PLC $2.250 CITI/MS/RBS 6.125% 10.18 Lower Tier-2 Capital 2/3/12 SAMSON INVESTMENT COMPANY $2.250 BAML/BARCS/BMO/CITI/CS/JEF/JPM/MIZUHO/RBC/WFC 9.750% 8.14 Bridge-loan Payment 4/10/12 EP ENERGY/EP FINANCE INC $2.000 BMO/CITI/CS/DB/JPM/NOMURA/RBC/UBS 9.375% 8.14 Acquisition Financing 3/26/12 LYONDELLBASELL IND NV $2.000 BAML/BARCS/CITI/CS/DB/HSBC/ING/JPM/MS/WFC 5.000% 7.12 Repay/Refinance Debt 10/19/12 CLEAR CHANNEL COMMS $1.999 CITI/GS/MS 9.000% 7.24 Repay/Refinance Debt 11/6/12 CLEAR CHANNEL WORLDWIDE $1.989 CITI/CS/DB/GS/MS/WFC 6.500% 10.13 InterCompany Loan 2/29/12 CLEAR CHANNEL WORLDWIDE $1.925 CITI/CS/DB/GS/MS/RBS/WFC 7.625% 8.12 InterCompany Loan 2/28/12 LINN ENERGY LLC/FIN CORP $1.800 BARC/CA/CITI/CS/RBC/RBS/WFC 6.250% 7.78 Acquisition Financing 9/20/12 VPI ESCROW CORP $1.750 GS/JPM/RBC 6.375% 8.15 Acquisition Financing 7/31/12 CIT GROUP INC $1.750 BAML/DB/GS/JPM 4.250% 5.11 Repay/Refinance Debt 2/2/12 CIT GROUP INC $1.750 BAML/BARC/GS/JPM 5.500% 7.13 Repay/Refinance Debt 10/3/12 CROWN CASTLE INTL CORP $1.650 BAML/BARC/CA/CITI/DB/JPM/MS/MUFG/RBC/RBS/SUN/TD 5.250% 10.40 Project Finance 8/8/12 CHS/COMMUNITY HEALTH SYS $1.600 BAML/CAC/CITI/CS/GS/JPM/MS/RBC/SUN/WFC 5.125% 6.08 Loan Payment 10/23/12 PLAINS EXPLORATION $1.500 BARC/BMO/CITI/JPM/WFC 6.500% 8.17 Acquisition Financing 10/23/12 PLAINS EXPLORATION $1.500 BARC/BMO/CITI/JPM/WFC 6.875% 10.46 Acquisition Financing 10/22/12 CITI $1.500 CITI Variable N/A General Corporate 10/4/12 CEMEX FINANCE LLC $1.500 BARC/CA/HSBC/ING/JPM/RBS 9.375% 10.14 Repay/Refinance Debt 5/15/12 INMET MINING CORP $1.500 BAML/CITI/CS/JPM/MS/RBC 8.750% 8.15 General CorporateSource:Bloomberg LPThe 20 Biggest Triple C Rated Deals of 2012 Announced Amount Issued Issuer Underwriters Coupon Tenor Use of Proceeds Date ($m) 10/19/12 CLEAR CHANNEL COMMUNICATIONS $1,999 CITI/GS/MS 9.000% 7.24 Repay/Refinance Debt 2/9/12 REYNOLDS GROUP $1,250 CS 9.875% 7.61 Repay/Refinance Debt 10/11/12 MOMENTIVE PERFORMANCE $1,100 BAML/BMO/CITI/CS/DB/GS/JPM/MS/UBS 8.875% 8.09 Repay/Refinance Debt 10/9/12 HD SUPPLY $1,000 BAML/BARC/CS/DB/GS/JPM/UBS/WFC 11.500% 7.86 Repay/Refinance Debt 1/25/12 PETROBAKKEN ENERGY $900 BAML/CS/RBC 8.625% 8.12 Repay/Refinance Debt 1/10/12 LEVEL 3 FINANCING $900 BAML/CITI 8.625% 8.63 Repay/Refinance Debt 8/1/12 LEVEL 3 FINANCING $775 BAML/CITI/CS/DB/JPM/MS 7.000% 7.93 Repay/Refinance Debt 10/23/12 HALCON RESOURCES $750 BARCS/GS/JPM/WFC 8.875% 8.64 Acquisition Financing 6/29/12 HALCON RESOURCES $750 BARC/BMO/GS/JPM/RBC/WFC 9.750% 8.11 Merger Financing 9/7/12 HUB INTERNATIONAL $740 BAML/MS/RBC 8.125% 6.16 Repay/Refinance Debt 7/12/12 WIDEOPENWEST FIN $725 CS/MS/MUFG/RBC/SUN 10.250% 7.09 Acquisition Financing 4/3/12 CENGAGE LEARNING ACQUISITIONS $725 DB/JPM/MS/RBC/UBS 11.500% 8.13 Repay/Refinance Debt 10/26/12 LAUREATE EDUCATION $700 BARC/CITI/JPM 9.250% 7.21 Repay/Refinance Debt 7/19/12 PARTY CITY HOLDINGS $700 BAML/BARC/DB/GS/MS 8.875% 8.13 Acquisition Financing 4/5/12 HD SUPPLY $675 BAML/BARC/CS/DB/GS/JPM/UBS/WFC 11.000% 8.13 Repay/Refinance Debt 9/19/12 SERTA SIMMONS HOLDINGS $650 BARC/DB/GS/MS/UBS 8.125% 8.12 LBO Funding 5/18/12 MOLYCORP $650 CS/MS 10.000% 8.14 Acquisition Financing 9/12/12 NUVEEN INVESTMENTS $645 BAML/DB/MS/RBC/UBS/WFC 9.500% 8.19 Capital 9/19/12 INTELSAT JACKSON $640 BAML/BARC/CS/DB/GS/JPM/MS 6.625% 10.35 Repay/Refinance Debt 1/3/12 STATION CASINOS $625 DB/JPM 3.660% 6.55 Repay/Refinance DebtSource: Bloomberg LP FINANCIAL REGULATION BLOOMBERG RULES EVERY FRIDAY sign up today on brief <go>  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 
  • 7. 01.03.13 www.bloombergbriefs.com Bloomberg Brief | Leveraged Finance 7U.S. Bonds  Triple C, Dividend, PIK Toggle Deals Make a Comeback Triple C Issuance Spikes PIK Issuance at Highest Since 2007 $m 12000 11,251 2012 PIK Toggle 10000 All PIK 8000 7,103 2011 6000 4000 Caa1 2010 Caa2 2000 Caa3 0 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 2007 2008 2009 2010 2011 2012 Source: Bloomberg millions Source: BloombergBiggest Deals to Raise Proceeds for Dividend Payments Date Issuer Amount Issued ($m) Underwriters Coupon Tenor 12/3/12 HCA HOLDINGS $1,000 BAML/BARC/CITI/CS/DB/JPM/MS/SUN/WFC 6.250% 8.31 2/2/12 LIMITED BRANDS $1,000 BAML/CITI/JPM 5.625% 10.17 10/10/12 TRANSDIGM $550 CITI/CS/MS/UBS 5.500% 8.12 10/4/12 PETCO HOLDINGS $550 BAML/CS/GS/JPM/MS/WFC 8.500% 5.09 10/16/12 IMS HEALTH $500 BAML/BARC/DB/GS/HSBC/JPM/WFC 6.000% 8.14 12/6/12 NEW ACADEMY FINANCE $500 BARC/CS/GS/JPM/KKR/MIZ/MS 8.000% 5.58 9/24/12 CDRT HOLDING $450 BAML/BARC/DB/MS 9.250% 5.07 10/23/12 TRANSUNION HOLDING $400 DB/GS 8.125% 5.70 5/24/12 GLOBAL BRASS AND COPPER $375 GS/MS 9.500% 7.10 12/13/12 IGLOO HOLDING $350 GS/BARC/CS/UBS 8.250% 5.00 10/9/12 JO-ANN STORES HLDS $325 BAML/BARC/CITI/JPM 9.750% 7.10 10/16/12 MIRROR PIK $275 BARC/JPM 9.000% 4.08 12/11/12 MICHAEL FOODS HOLDING $275 GS/BAML 8.500% 5.65 8/17/12 AMERICAN GILSONITE $260 BAML/KEYBCM 11.500% 5.08 10/18/12 ENERGY FUTURE $253 CITI/CS/GS/JPM/MS 6.875% 5.08 8/9/12 ENERGY FUTURE $250 CITI/CS/GS/JPM/MS 6.875% 5.08Source: Bloomberg LPBiggest PIK Deals Amount Issued Date Issuer Underwriters Coupon Tenor Use of Proceeds ($m) 10/12/12 ALPHABET HOLDING $550 BAML/BARCS/CS 7.750% 5.11 Repay/Refinance Debt 10/4/12 PETCO HOLDINGS $550 BAML/CS/GS/JPM/MS/WFC 8.500% 5.09 Dividend Payment - Shareholders 12/6/12 NEW ACADEMY FINANCE $500 BARC/CS/GS/JPM/KKR/MIZ/MS 8.000% 5.58 Dividend Payment - Shareholders 10/10/12 JAGUAR HOLDING $525 CS/DB/GS/JPM/UBS 9.375% 5.07 Acquisition Financing 9/24/12 CDRT HOLDING $450 BAML/BARC/DB/MS 9.250% 5.07 Dividend Payment - Shareholders 10/23/12 TRANSUNION HOLDING $400 DB/GS 8.125% 5.70 Acquisition Financing 7/17/12 INTERLINE BRANDS $365 BAML/GS 10.000% 6.37 Pension Funding 12/13/12 IGLOO HOLDING $350 GS/BARC/CS/UBS 8.250% 5.00 Dividend Payment - Shareholders 10/24/12 BOE MERGER $335 BAML/DB/GS 9.500% 5.06 Repay/Refinance Debt 10/9/12 JO-ANN STORES $325 BAML/BARC/CITI/JPM 9.750% 7.10 Repay/Refinance Debt 10/16/12 MIRROR PIK $275 BARC/JPM 9.000% 4.08 Repay/Refinance Debt 12/11/12 MICHAEL FOODS $275 GS/BAML 8.500% 5.65 Dividend Payment - Shareholders 2/29/12 NEW ENTERPRISE $265 BAML 13.000% 6.09 Loan Payment 12/12/12 TAMINCO ACQUISITION $250 C/CS 9.125% 5.08 Dividend Payment - ShareholdersSource: Bloomberg LP  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 
  • 8. 01.03.13 www.bloombergbriefs.com Bloomberg Brief | Leveraged Finance 8U.S. BondsAverage Tenor Falls, Coupon Rises; Triple C Issuance Volume Jumps%/Years Average Junk Bond Coupon Rises, Tenor Falls B1 Rated Bonds Dominate Issuance by Rating 8.5 60 Caa3 2012 8.3 2011 50 Caa2 8.1 2010 7.9 Caa1 40 7.7 B3 7.5 30 B2 7.3 B1 20 7.1 Ba3 6.9 Amount issued (Right Axis, $bn) 10 Ba2 6.7 Average Coupon (Left Axis) Ba1 Average Tenor (Left Axis) 6.5 0 J-12 F-12 M-12 A-12 M-12 J-12 J-12 A-12 S-12 O-12 N-12 D-12 $0 $20,000 $40,000 $60,000 $80,000 $100,000Source: Bloomberg Source: Bloomberg millions Energy Sector Sees Biggest Year-on-Year Increase Energy Sector Issuance by Use of Proceeds $70 Repay/Refinance 2012 $57,568 $60 GCP/CAPEX Basic Materials M&A Energy $50 Communications Billions Consumer, Cyclical $40 2011 $42,178 Consumer, Non-cyclical Diversified $30 Energy Financial $20 Industrial 2010 $37,380 Technology $10 Utilities $0 $0 $100,000 $200,000 $300,000 $400,000 2010 2011 2012Source: Bloomberg millions Source: Bloomberg LPJPMorgan Tops 2012 U.S. Junk Bond Underwriter Ranking underwriter RANK MARKET SHARE AMOUNT ($BN) Weighted Av. FEES (%) dEAL COUNT JPMorgan 1 11.5 40.3 1.5 326 BAML 2 11 38.8 1.5 324 Credit Suisse 3 9.1 31.9 1.4 231 Deutsche Bank 4 8.8 31.0 1.3 236 Citi 5 8.8 31.0 1.3 245 Goldman Sachs 6 8.1 28.4 1.3 203Source: Bloomberg LP. LEAG44 <GO> MANAGE YOUR EQUITY PORTFOLIOS AND RISK WITH THE LATEST DESKTOP APPLICATION  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 
  • 9. 01.03.13 www.bloombergbriefs.com Bloomberg Brief | Leveraged Finance 9U.S. BondsJunk Bond Returns Exceed High Grade, Driven by Triple Cs; Fund Inflows Dwindle Total Junk Beats High Grade, Government Bonds in 2012 Total Triple C Credit Performs Best Since 2009 Return % Return % 30 95 85 25 BBs 75 Bs 20 65 CCCs or Lower 55 15 High Yield Index 45 10 35 25 5 15 5 0 Euro High Yield Global High U.S. High Yield High Grade Govt Bonds MSCI World -5 Yield 2009 2010 2011 2012 Source: Bloomberg Source: Bloomberg LP Total Return % Bond, Loan Returns Expected to Drop $m U.S. Bond Fund Flow Turns Negative at Year End 16 3000 2012 Actual 14 2013 Forecast 2000 12 10 1000 8 INFLOW 6 0 4 OUTFLOW 2 -1000 0 High-Yield Bonds Leveraged Loans -2000 Average bond return forecast from Morgan Stanley, Citi, JPM, BAML, RBS, Credit Suisse, Deutsche, Wells Fargo, UBS. Loan forecasts from Morgan Stanley, Citi, JPM, BAML, -3000 Credit Suisse, Deutsche. 1/1 2/1 3/1 4/1 5/1 6/1 7/1 8/1 9/1 10/1 11/1 12/1 Source: Bloomberg LP Source: EPFR GlobalCIT Group Leads Junk Bond Issuer Ranking by Proceeds in 2012 Issuer Rank Market Share(%) Amount ($bn) Weighted Av. Fees (%) deal count CIT Group 1 2.8 9.8 0.942 7 Clear Channel 2 2 6.9 - 5 Sprint Nextel 3 1.7 6.1 1.5 5 HCA Holdings 5 1.4 4.9 1.125 4 Reynolds 6 1.3 4.5 - 2 DISH Network 7 1.3 4.4 - 4Source: Bloomberg LP LEAG44<GO> WHERE ARE US INTEREST RATES HEADING?  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 
  • 10. 01.03.13 www.bloombergbriefs.com Bloomberg Brief | Leveraged Finance 10U.S. Bonds — CDS Watch  Bloomberg DataCentex, Nextel Credit Best in 2012; JC Penney, RadioShack Underperform, CDS ShowBest Performers Centex Corp. Nextel Comm. Inc. Energy Future Holdings Corp. Sprint Nextel Corp. Ally Financial Inc. Dole Food Co. Inc. L-3 Comm Corp. (Sub.) PulteGroup Inc. Neiman Marcus Group Inc. Beazer Homes USA Inc. International Lease Finance Corp. GenOn Energy Inc. Standard Pacific Corp. Community Health Systems Inc. DDR Corp. KB Home USG Corp. Avis Budget Group Inc. Host Hotels & Resorts LP Avis Budget Car Rental LLC/Finance Inc. -80.00% -70.00% -60.00% -50.00% -40.00%Worst Performers JC Penney Co. Inc. RadioShack Corp. Best Buy Co. Inc. Edison Mission Energy Albertsons Inc. Advanced Micro Devices Texas Competitive Elec. Hldgs Co. LLC Navistar Intl. Corp. Windstream Corp. Chesapeake Energy Corp. Peabody Energy Corp. SUPERVALU Inc. Ltd Brands Inc. Toys R Us Inc. Health Net Inc. Rite Aid Corp. Goodyear Tire & Rubber Co. DPL Inc AES Corp. American Axle & Mnfg. Inc. -50.00% 0.00% 50.00% 100.00% 150.00% 200.00% 250.00%Source: Bloomberg LP WCDS <Go>The chart shows the largest percentage movers for the Jan. 1-Dec. 13 2012 period in single name five-year CDS for U.S.- based issuers rated BB+through C by Fitch and priced by CMA Datavision. CDS prices are bid-ask midpoint of CMA end-of-day New York trading levels. When applicable, theyare converted from points upfront. — Lee Zeltser, Jeff Schiller, Bloomberg Data Analysts  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 
  • 11. 01.03.13 www.bloombergbriefs.com Bloomberg Brief | Leveraged Finance 11U.S. Bonds — Total Returns By Sector Bloomberg DataBanks were the best performing sector in Bank of America Merrill Lynch’s U.S. high-yield index[1], with a 28 percent gain. This was fol-lowed by the insurance and real estate segments, with total returns of 25 percent and 24 percent, respectively. The worst returns wereseen in environmental, metals/mining and food & drug retail junk bonds. Triple C rated bonds beat the index, with a 19.6 percent gain,while the other rating categories underperformed. The market overall had its best year since 2009, with a 15.35 percent return. — Lee Zeltser, Jamie Dranoff, Bloomberg Data AnalystsBank Of America Merrill Lynch US High Yield Master II Index-Sector Returns  December 13, 2012 Total Return, % [2,3] BAML BAML Sector YTW (%) OAS Ticker Credit Rating 2012 [1] 2011 2010 2009 Gaming H0AG B3 7.77 712 15.86 3.67 20.60 59.11 Telecommunications H0TC B1 5.77 475 19.61 2.70 14.17 46.75 Entertainment H0ET B3 5.19 474 13.73 6.27 12.46 55.81 Utilities H0EL B1 8.47 761 11.46 6.89 4.20 28.16 Railroad H0RA CCC1 7.56 673 14.51 6.11 13.85 31.52 Real Estate H0HB B1 4.70 397 23.86 -0.34 19.85 87.19 Containers H0CT B2 5.56 472 15.07 6.27 11.50 35.48 Financials H0FI B1 5.09 441 17.12 3.31 26.35 118.85 Food & Drug Retail H0FR B3 7.20 631 7.40 14.53 6.23 57.81 Food/Beverage/Tobacco H0FO B1 5.41 466 13.96 5.45 13.48 39.86 Hotels H0AH BB2 3.57 266 11.70 7.22 12.44 42.08 Leisure H0LE B1 4.77 415 13.67 9.13 19.04 63.73 Restaurants H0RE B3 6.36 567 16.73 7.10 12.70 64.07 Building Materials H0BL B1 5.55 476 19.42 0.75 13.01 69.56 Broadcasting H0BR B3 7.89 706 18.97 1.80 23.73 197.60 Cable TV H0CV B1 4.64 376 11.41 10.09 11.36 30.72 Capital Goods H0CA B1 4.91 427 12.85 6.06 16.23 46.31 Aerospace H0AE B1 5.95 522 11.43 4.32 14.02 35.85 Steel H0ST BB2 6.43 522 13.16 2.40 14.76 74.27 Consumer Products H0CO B2 5.98 510 13.06 4.06 13.05 59.09 Transportation H0SH B3 10.62 993 17.10 -5.99 19.58 70.69 Energy H0EN B1 5.75 481 11.50 8.51 12.95 51.14 Textiles/Apparel H0TE B1 4.62 385 13.83 6.39 14.46 66.60 Healthcare H0HL B2 5.61 474 14.44 7.16 11.65 42.22 Metals/Mining H0ME B1 6.93 613 6.82 3.70 15.75 52.37 Airlines H0AI B1 6.36 570 16.91 -2.37 21.03 70.52 Services H0SE B2 6.26 550 14.80 5.70 12.81 76.04 Automotive H0AU B1 5.77 500 16.50 7.05 17.82 63.85 Environmental H0EV B2 6.66 571 9.42 6.35 14.86 43.22 Super Retail H0SR B1 6.08 521 12.93 4.76 12.41 77.39 Paper H0PA BB3 5.90 484 16.52 -1.77 15.17 51.83 Media H0DM B2 6.43 541 11.90 5.83 13.90 65.41 Chemicals H0CH B1 6.19 520 15.54 4.11 17.33 62.82 Publishing H0PU B1 10.06 949 10.41 -6.02 15.37 80.39 Banks H0BA BB3 5.59 467 28.13 -4.10 21.16 73.15 Technology H0TY B2 7.29 640 15.89 5.43 15.37 87.11 Insurance H0IN BB3 7.84 675 25.38 1.12 40.91 121.60 BBs H0A1 BB2 4.63 369 14.33 6.12 14.93 45.21 Bs H0A2 B2 5.85 503 14.77 4.65 13.99 47.64 CCCs H0A3 CCC2 10.52 973 19.58 -1.40 18.42 96.79 US High Yield Master II H0A0 B1 6.13 527 15.35 4.38 15.19 57.51Source: Bank Of America Merrill Lynch Bond IndicesNotes:1) Year to Dec. 13.2) Monthly and YTD performance data is as of last fully completed monthly period.3) Green/red color coding represents performance ranking of the top/bottom 3 sectors in the period.  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 
  • 12. 01.03.13 www.bloombergbriefs.com Bloomberg Brief | Leveraged Finance 12Western european Junk BondsAverage Coupon Trends Higher; Volume Revives, Driven by CCC Rated Issuance Average High-Yield Bond Coupon Rises Euro, Bn Issuance Volume by Credit Rating 9 50 14 CCC+ 8 45 B 40 12 7 B- Avergae Coupon, % (line) 35 Volume, Eur Bn, (bars) 6 10 B+ 30 5 BB 25 8 BB- 4 20 BB 3 6 15 BB+ 2 10 C 4 1 5 CC 2 CCC- 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 CCC 0 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 Source: Bloomberg Source: Bloomberg Financial Issuance Volume Falls, Corporate Rises Luxembourg Dominates Junk Volume by Country 14 70 CORPORATE FINANCIAL 12 60 10 50 2011 2012Eur (Bln) Eur (Bln) 8 40 6 30 4 20 2 10 - 0 United Luxembourg Germany Spain Portugal Italy France 2007 2008 2009 2010 2011 2012 Kingdom Source: Bloomberg Source: Bloomberg Leveraged Finance Proprietary Data. Deep Analysis. Expert Insight. Bloomberg BRIEF Leveraged Finance is a new, groundbreaking publication for the leveraged loan and junk bond market, published by Bloomberg, the premier source of data and analytics in the financial world. We turn knowledge into insight — when you need it — with intelligence you can act on. Your time is valuable. Maximize it by switching to Bloomberg BRIEF Leveraged Finance today. BRIEF NEwsLEttERs Brief <go> to sign up on the Bloomberg terminal. or for a risk-free trial visit www.bloomberg.com/brief  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 
  • 13. 01.03.13 www.bloombergbriefs.com Bloomberg Brief | Leveraged Finance 13U.S. LoansVolume Accelerates, Fueled by Refinancing; Returns Pick Up bn Institutional Issuance Tops 2011, Total Volume Lags Leveraged Loan Returns Rebounded in 2012 25% $600 Pro-Rata 20% $500 Institutional 15% $400 10% Total Return 5% $300 0% $200 -5% $100 -10% -15% $0 1/11/11 4/11/11 7/11/11 10/11/11 1/11/12 4/11/12 7/11/12 10/11/12 2009 2010 2011 2012 JPM Leveraged Loan Index S&P 500 Equity Index JPM HY Domestic Bond Index Source: Bloomberg Source: Bloomberg LSRC <GO> Refinancing Deals Dominate Leveraged Loan Issuance Margin Per Turn of Leverage at Close $180 700 First Lien Loans: Jan 2011 - Dec 2012 600 $160 Average 1L Spread at Close (bps) 600 Average Spread at Close Min bps per Turn $140 Average bps per Turn Max bps per TurnIssuance USD (Billions) 500 500 Spread in Basis Points $120 $100 400 400 $80 300 $60 300 200 $40 100 200 $20 $0 0 Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 100 0 NR CCC B BB Loans Used to Refi Debt Average Spread at Close (bps) BBB- BB BB+ BB- B+ B Rating at Close Source: Bloomberg LSRC <GO> Source: Bloomberg LSRC <GO> SUBScriBe tO BlOOMBerg BrieFS Market leading intelligence Bloomberg Briefs publishes 18 newsletters to help you stay ahead of the markets. Individual and group subscriptions available. Visit www.bloombergbriefs.com to subscribe or take a trial. GET THE WORLD. Or call Annie Gustavson at +1-212-617-0544. BRIEF BLOOMBERGBRIE  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 
  • 14. 01.03.13 www.bloombergbriefs.com Bloomberg Brief | Leveraged Finance 14U.S. Loans  Ford Motor Leads Ranking of Biggest Leveraged Loans in 2012 Borrower Tranche Size ($bn) Tenor Current Margin Use of Proceeds Sector Ford Motor 9.0 3.71 225 Refinance Debt Consumer Discretionary Clear Channel Comms 7.7 3.26 365 Refinance Debt Communications Kinder Morgan 6.8 1.29 300 Acquisition Energy Sealed Air 6.4 3.88 250 Working Capital Materials ARAMARK 5.2 4.41 337.5 Refinance Debt Consumer Staples Kinder Morgan 5.0 3.29 350 Acquisition Energy Sabine Pass Liquefaction 3.6 7.00 350 Development/Construction Energy Chesapeake Energy 3.0 5.56 700 Refinance Debt Energy Plains Exploration 3.0 5.00 300 Acquisition Energy Infor/Lawson Software 2.8 5.52 400 Refinance Debt Technology Infor/Lawson Software 2.8 6.00 500 Merger Technology International Lease Finance Corp 2.3 3.00 325 Refinance Debt Financials Reynolds Group Holdings 2.2 6.00 375 Refinance Debt Consumer Staples Cequel Communications 2.2 7.00 300 Dividend Payment Communications First Data Corp 2.2 5.03 500 Refinance Debt Technology Fidelity National Information Services 2.1 5.00 200 Refinance Debt Technology EP Energy 2.0 5.00 175 LBO Energy HCA 2.0 4.07 150 Refinance Debt Health Care Energy Transfer Equity 2.0 5.01 300 Acquisition Energy Ineos US Finance 2.0 6.00 525 Refinance Debt MaterialsSource: Bloomberg LPCequel Tops Ranking of Loan Issuance for Dividend Payment Borrower Tranche Size ($m) Tenor Margin LIBOR Floor Sponsor Cequel Communications 2,200 7.00 300 100 Goldman Sachs/Quadrangle/Oaktree BJs Wholesale Club 1,300 7.00 450 125 CVC/Leonard Green Booz Allen Hamilton 1,250 7.00 350 100 Carlyle Kronos 1,210 7.00 425 125 Hellman & Friedman/JMI Equity Attachmate 1,100 5.51 575 150 Francisco Partners/Golden Gate/Thoma Bravo Lone Star Intermediate Super Holdings 1,000 7.50 950 150 Madison Dearborn/Providence Equity/Welsh Carson West Corp 970 5.88 450 125 Quadrangle/Thomas H Lee AdvancePierre Foods 925 4.75 450 125 Oaktree Capital Endurance International Group 800 7.00 500 125 GS Capital/Warburg Pincus Harbor Freight Tools USA 750 5.50 425 125 -Source: Bloomberg LPChesapeake Dominates Covenant-Lite Leveraged Loan Issuance Borrower Tranche Size ($bn) Tenor Current Margin Use of Proceeds Sector Chesapeake Energy 3.00 5.56 700 Refinance Debt Energy Ineos US Finance 2.00 6.00 525 Refinance Debt Materials Chesapeake Energy 2.00 5.06 450 Refinance Debt Energy Bausch & Lomb 1.94 7.00 425 Refinance Debt Health Care Getty Images 1.90 7.00 325 LBO Communications ADS Waste Holdings 1.80 7.00 400 Acquisition Industrials SUPERVALU 1.65 5.00 200 Refinance Debt Consumer Staples Arch Coal 1.40 6.00 450 Refinance Debt Energy BJs Wholesale Club 1.30 7.00 450 Refinance Debt Consumer Staples US Foods 1.24 4.82 425 Refinance Debt Consumer StaplesSource: Bloomberg LP  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 
  • 15. 01.03.13 www.bloombergbriefs.com Bloomberg Brief | Leveraged Finance 15U.S. LoansInstitutional, Cov-Lite Volume Jump; Consumer Discretionary Leads by Sector Quarterly Leveraged Volume and Deal Count Pro Rata vs Institutional Issuance$200 BIL 800 $120 BIL Total Issuance$180 BIL 700 # of Tranches $100 BIL$160 BIL 600$140 BIL $80 BIL$120 BIL 500$100 BIL 400 $60 BIL $80 BIL 300 $40 BIL $60 BIL 200 $40 BIL $20 BIL $20 BIL 100 Institutional Pro-Rata $0 BIL 0 $0 BIL Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 2010 2011 2012 2009 2010 2011 2012Source: Bloomberg Source: Bloomberg 2012 Issuance by Sector Cov Lite Term Loan Issuance by S&P Ratings Technology Utilities $25 BIL 11% 1% Communications 11% CCC BBB BB B $20 BIL Materials 6% Consumer $15 BIL Discretionary 22% Industrials $10 BIL 9% $5 BIL Health Care $0 BIL 10% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Consumer Staples 7% 2009 2010 2011 2012 Financials EnergySource: Bloomberg 12% 11% Source: Bloomberg Risk Proprietary Data. Deep Analysis. Expert Insight. Bloomberg BRIEF Risk is a new, groundbreaking publication for traders, hedge fund managers, dealers, asset managers, pension managers and risk managers, published by Bloomberg, the premier source of data and analytics in the financial world. We turn knowledge into insight — when you need it — with intelligence you can act on. Your time is valuable. Maximize it by switching to Bloomberg BRIEF Risk today. BRIEF NEwslEttERs Brief <go> to sign up on the Bloomberg terminal. or for a risk-free trial visit www.bloomberg.com/brief  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 
  • 16. 01.03.13 www.bloombergbriefs.com Bloomberg Brief | Leveraged Finance 16 U.S. Loans click on tabs to view sector maturity walls Interactive 2013-2014 Institutional Loan Maturity Schedule All ALL $18 $16 Basic Materials $14 Loans Maturing (Billions) Communications $12 $10 Consumer, Cyclical $8 Consumer, Non-cyclical $6 $4 Financial $2 Industrial $0 Nov Nov Apr Aug Dec Apr Aug Dec May Jul May Jul Feb Feb Sep Sep Mar Mar Oct Jun Oct Jan Jan Jun Technology 2013 2014 1Maturity Wall Pushed Out due to Recent Refinancings Source: Bloomberg Utilities Limited Maturities in 2013 Maturity Wall Pushed Out due to Recent Refinancings The maturity wall for U.S. leveraged $100 loans has been pushed out to a peak in $90 the first quarter of 2017 after recent refi- nancings, Bloomberg data show. In 2009, $80 more than $95 billion was scheduled to Loan Issuance in USD (Billions) $70 come due in the fourth quarter of 2013. This year’s wall has been reduced $60 significantly as no more than $6 billion is $50 scheduled to come due in any one quar- ter. The next peak is in the third quarter of $40 2014, when $24 billion in loans are due, $30 Bloomberg data show. — Afrim Zeka, Bloomberg Data Analyst $20 $10 $0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2012 2013 2014 2015 2016 2017 2018 2019 2009 Maturity Wall 2012 Maturity Wall Source: Bloomberg LSRC <GO> WHO GETS PAID BEFORE YOU DO?  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 
  • 17. 01.03.13 www.bloombergbriefs.com Bloomberg Brief | Leveraged Finance 17U.S. Loans — Price TrendsUnsecured Margin, Libor Floor Falls; Percentage With Libor Floor Jumps Average Margin by Rank Average LIBOR Floor for Term Loans1200 350 3001000 250 800 200 600 150 400 100 200 50 1st Lien 2nd Lien Unsecured 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2010 2011 2012 2009 2010 2011 2012Source: Bloomberg Source: Bloomberg Percentage of Term Loans with LIBOR Floor Average Original Issue Discount for Term Loans70% 99.560% 9950% 98.540% 9830% 97.520%10% 97 0% 96.5 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 2010 2011 2012 2010 2011 2012Source: Bloomberg Source: Bloomberg Structured Notes Proprietary Data. Deep Analysis. Expert Insight. Bloomberg BRIEF Structured Notes is a new, groundbreaking publication created for structured note issuers, institutional investors and regulators, published by Bloomberg, the premier source of data and analytics in the financial world. We turn knowledge into insight — when you need it — with intelligence you can act on. Your time is valuable. Maximize it by switching to Bloomberg BRIEF Structured Notes today. BRIEF NEwSlEttERS Brief <go> to sign up on the Bloomberg terminal. or for a risk-free trial visit www.bloomberg.com/brief  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 
  • 18. 01.03.13 www.bloombergbriefs.com Bloomberg Brief | Leveraged Finance 18European Loans Average Margin Trends Higher; Maturity Wall Pushed Out Quarterly Issuance Volume, Average Margin Leveraged Loan Maturity Wall, 2012 Vs 2011 80 550 70 2011 2012 70 500 60 60 450 50 50 Average Margin Eur (Bln)EUR (Bln) 40 400 40 30 350 30 20 300 20 10 0 250 10 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2007 2008 2009 2010 2011 2012 - 2012 2013 2014 2015 2016 2017 Source: Bloomberg Source: Bloomberg Announced European LBOs Fall 17% in 2012 $m Europe Announced LBO Volume Drops Versus U.S. 400000 900 700000 Asia Pac (Dev) N America W Europe 350000 800 600000 700 300000 500000 600 250000 USD M (bar) 400000 Number of Deals (line) 500 200000 400 300000 150000 300 100000 200000 200 50000 100 100000 0 0 0 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 Source: Bloomberg Source: Bloomberg LP Make an IMpact wIth Bloomberg Briefs provide dedicated licenses to reuse our content to help your business. We offer a full suite of BlooMBerg BrIef content products and services ranging from hardcopy and electronic reprints to plaques, permissions/licensing and photocopies. to find the solution that is right for you, contact us today at: 800 290 5460 x 100, email: bloombergbriefreprints@theygsgroup.com  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 
  • 19. 01.03.13 www.bloombergbriefs.com Bloomberg Brief | Leveraged Finance 19European leveraged Loans Schaeffler Tops Ranking of Largest Deals Signed in 2012 Issuer Deal Size (M) Currency Maturity Margin Schaeffler 8,000 EUR 01/27/15 Euribor+425 Intelsat Jackson Holdings 3,218 USD 04/02/18 Libor+325 Eircom Holdings 2,345 EUR 09/29/17 Euribor+300 Delta 2 Sarl 2,260 USD 04/27/19 Libor+475 Elior SCA 1,581 EUR 06/30/17 Euribor+450 Abengoa 1,566 EUR 07/01/16 Euribor+375 Eurasian Natural Resources 2,000 USD 02/01/17 Libor+630 Silver II Borrower Sarl 1,975 USD 12/05/19 Libor+375 Vivarte 1,509 EUR 03/31/18 Euribor+650 Cableuropa SAU 1,400 EUR 12/24/18 Euribor+450 GrifolsInc 1,700 USD 06/01/17 Libor+350 Telco SPA 1,050 EUR 11/27/13 Euribor+300 Sensata Technologies 1,336 USD 05/12/18 Libor+275 EDP- Energias de Portugal 1,000 EUR 08/20/17 Euribor+480 Misys 1,197 USD 12/12/18 Libor+600 Autobar Group 900 EUR 10/31/19 Euribor+500 Iglo Foods Midco 811 EUR 10/31/17 Euribor+475 EDP - Energiasde Portugal 800 EUR 10/22/15 Euribor+350 Kabel Deutschland Vertriebund Service 782 EUR 03/31/17 Euribor+325 Smurfit Kappa Acquisitions 701 EUR 03/31/17 Euribor+388Source:Bloomberg LPAdmorabilia Leads European Loan Maturity Schedule for 2013 Outstanding Borrower Type Maturity Currency Amount Admorabilia TERM 08/11/2013 EUR 1,250 Telco TERM 11/27/2013 EUR 875 Inmobiliaria Colonial TERM 09/14/2013 EUR 800 Kwik-Fit Holdings TERM 08/31/2013 EUR 375 Kwik-Fit Holdings TERM 08/31/2013 GBP 265 Enterprise Inns TERM 12/15/2013 GBP 264 Hapag-Lloyd TERM 09/25/2013 USD 412 Mecom Group TERM 10/25/2013 EUR 295 Sky Deutschland D-DTERM 12/31/2013 EUR 275 FCI International TERM 11/02/2013 EUR 182 Air Tanker Finance TERM 07/27/2013 GBP 182 Travelex TERM 10/31/2013 GBP 140 Red Bee Media TERM 08/31/2013 GBP 125 Iccrea BancaImpresa TERM 12/23/2013 EUR 150 Enterprise Inns REV 12/15/2013 GBP 99 Powerfuel Mining TERM 07/16/2013 GBP 85 Etablissements Maurel et Prom REV 12/31/2013 USD 130 Sponda TERM 02/15/2013 EUR 100 Aegean Marine Petroleum REV 01/30/2013 USD 123 Smurfit Kappa Acquisitions TERM 12/31/2013 EUR 95Source:Bloomberg LP  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 

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