December 2013, European Leveraged Loan Market Analysis


Published on

Loan issuance was €5.4 billion in November 2013, while high yield issuance was €7.4B. Both markets are buoyant and open. Secondary markets were up, inflows into high yield funds are estimated to be €1B. The ELLI was up. Four CLOs priced in November, with seven still in the pipeline.

Check out LCD's new, free web sites, and

* Job postings
* Online Loan Market and High Yield Primer
* News and analysis
* Market Stats

Video presentation of these slides:

Connect with LCD
Like LCD on Facebook for monthly analysis on LBO/Private equity stats, as well as Default/Restructuring analysis.

There are over 10,000 market contacts in LCD's Leveraged Loan Group

News, commentary, other leveraged finance info



Published in: Economy & Finance, Business
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

December 2013, European Leveraged Loan Market Analysis

  1. 1. Text European Leveraged Finance Market Update December, 2013 Sucheet Gupte - Director
  2. 2. European Market Trends Text • Loan issuance was €5.4B in November 2013, while high yield issuance was €7.4B for the month. • Secondary markets were up: leveraged loan markets were up 27 bps to close at 100.73; high yield markets were up 14 bps to finish 105.33. • Inflows into European high yield funds for November are estimated to be €1B, bringing the estimated year-to-date number to an enormous €6.3B. • The S&P European Leveraged Loan Index (ELLI) was up for November, with returns at 1.18%. • 4 CLOs priced this month, bringing monthly issuance to €1.62B and year-to-date issuance to €6.45B. • Default rates were higher even though no new issuers defaulted (the overall par amount outstanding in the ELLI decreased).
  3. 3. European Loan Flow Name Prices 101 99 Text 98 96 94 93 91 3/11 . 5/11 7/11 Source: S&P Capital IQ/LCD 9/11 11/11 1/12 3/12 5/12 7/12 9/12 10/12 12/12 2/13 4/13 6/13 8/13 11/13
  4. 4. European HY Bond Flow Name Prices 106 102 Text 98 94 89 85 81 3/11 . 5/11 Source: Bloomberg 7/11 9/11 11/11 1/12 3/12 5/12 7/12 9/12 11/12 1/13 3/13 5/13 6/13 8/13 11/13
  5. 5. ELLI Multi-Currency Loan Return 1.5% Text November 2013: October 2013: Jan-Nov 2013: Jan-Nov 2012: + 1.18% + 1.02% + 8.21% + 8.70% 1.0% 0.6% 0.1% -0.4% 11/12 . 12/12 1/13 2/13 Source: S&P European Leveraged Loan Index 3/13 4/13 5/13 6/13 7/13 8/13 9/13 10/13 11/13
  6. 6. Volume: New-Issue Loans vs. HY Bonds 18 HY bonds Text Loans €billions 14 €7.4B 9 5 €5.4B 0 11/12 . 12/12 1/13 Source: S&P Capital IQ/LCD 2/13 3/13 4/13 5/13 6/13 7/13 8/13 9/13 10/13 11/13
  7. 7. ELLI Default Rates – European Leveraged Loans Default Rate by Principal Amount Default Rate by Issuer Count 16% 16% 13% 13% 10% 10% Text 6% 6% 3% 0% 2/09 . 3% 0% 2/09 2/10 2/11 Source: S&P Capital IQ/LCD 12/11 11/13 2/10 12/11 2/12 11/13
  8. 8. Themes To Watch For Text • Both the high yield market and leveraged loan market are buoyant and open, with the loan market currently having a slight edge. • Issuers will also look to tap the US market for both loans and high yield bonds in finding the best execution. • The CLO market is still strong, with seven transactions still in the pipeline. Anecdotal evidence suggests that managers are seeing inflows into global loan accounts.
  9. 9. Text Text Copyright 2013 Standard & Poor's, a division of The McGraw-Hill Companies, Inc. No content (including ratings, credit-related analyses and data, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of S&P. The Content shall not be used for any unlawful or unauthorized purposes. S&P, its affiliates, and any third party providers, as well as their directors, officers, shareholders, employees or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness or availability of the Content. S&P Parties are not responsible for any errors or omissions, regardless of the cause, for the results obtained from the use of the Content, or for the security or maintenance of any data input by the user. The Content is provided on an "as is" basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT’S FUNCTIONING WILL BE UNINTERRUPTED OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the Content even if advised of the possibility of such damages. Credit-related analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities or to make any investment decisions. S&P assumes no obligation to update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. S&P’s opinions and analyses do not address the suitability of any security. S&P does not act as a fiduciary or an investment advisor. While S&P has obtained information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives. S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process. S&P may receive compensation for its ratings and certain credit-related analyses, normally from issuers or underwriters of securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on its Web sites, (free of charge), and and (subscription), and may be distributed through other means, including via S&P publications and third party redistributors. Additional information about our ratings fees is available at pause