European Leveraged Finance Market UpdateJune, 2013Sucheet Gupte - DirectorText
European Market TrendsText• The S&P European Leveraged Loan Index (ELLI) finished the month up 0.11%.• Loan issuance was €8...
9193949698991013/11 5/11 7/11 9/11 11/11 1/12 3/12 5/12 7/12 9/12 11/12 1/13 3/13 5/13.European Loan Flow Name PricesTextS...
.81858994981021063/11 5/11 7/11 9/11 11/11 1/12 3/12 5/12 7/12 9/12 11/12 1/13 3/13European HY Bond Flow Name PricesSource...
0%0.4%0.8%1.1%1.5%4/12 5/12 6/12 7/12 8/12 9/12 10/12 11/12 12/12 1/13 2/13 3/13 4/13 5/13.ELLI Multi-Currency Loan Return...
.05914184/12 5/12 6/12 7/12 8/12 9/12 10/12 11/12 12/12 1/13 2/13 3/13 4/13 5/13Volume: New-Issue Loans vs. HY BondsHY bon...
0%3%6%10%13%16%2/09 2/10 12/11 2/12 5/130%3%6%10%13%16%2/09 2/10 2/11 12/11 5/13.ELLI Default Rates – European Leveraged L...
Themes To Watch ForText• Given the buoyant equity markets, expect further IPOs from some sponsor-led companies, allowing t...
pauseTextCopyright 2013 Standard & Poors, a division of The McGraw-Hill Companies, Inc.No content (including ratings, cred...
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June 2013, European Leveraged Loan Market Analysis

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Issuance in the primary hit a post credit-crunch high in May, while secondary markets were down. CLO issuance was promising, with more in the pipeline, although new EBA directives threaten to hinder issuance going forward. More spread/yield compression is expected going forward, as issuers play loan and bond investors against each other in search of best terms.


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http://www.highyieldbond.com/


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* News and analysis
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Transcript of "June 2013, European Leveraged Loan Market Analysis "

  1. 1. European Leveraged Finance Market UpdateJune, 2013Sucheet Gupte - DirectorText
  2. 2. European Market TrendsText• The S&P European Leveraged Loan Index (ELLI) finished the month up 0.11%.• Loan issuance was €8.7B in May 2013, while HY issuance was €9.0B.• Secondary markets were down:loan markets were down 17 bps to finish the month at 100.41;high yield markets were down 139 bps to finish the month at 103.24.• Estimated inflows into European HY funds was €975M for May, versus €555M for April.YTD inflows are almost €4B.• Default rates stayed roughly the same.
  3. 3. 9193949698991013/11 5/11 7/11 9/11 11/11 1/12 3/12 5/12 7/12 9/12 11/12 1/13 3/13 5/13.European Loan Flow Name PricesTextSource: LCD - Leveraged Commentary & Data
  4. 4. .81858994981021063/11 5/11 7/11 9/11 11/11 1/12 3/12 5/12 7/12 9/12 11/12 1/13 3/13European HY Bond Flow Name PricesSource: BloombergText5/13
  5. 5. 0%0.4%0.8%1.1%1.5%4/12 5/12 6/12 7/12 8/12 9/12 10/12 11/12 12/12 1/13 2/13 3/13 4/13 5/13.ELLI Multi-Currency Loan ReturnTextMay 2013: + 0.11%April 2013: + 0.88%Jan-May 2013: + 3.19%Jan-May 2012: + 4.63%Source: S&P European Leveraged Loan Index
  6. 6. .05914184/12 5/12 6/12 7/12 8/12 9/12 10/12 11/12 12/12 1/13 2/13 3/13 4/13 5/13Volume: New-Issue Loans vs. HY BondsHY bondsLoans€billionsTextSource: LCD - Leveraged Commentary & Data€9B€8.7B
  7. 7. 0%3%6%10%13%16%2/09 2/10 12/11 2/12 5/130%3%6%10%13%16%2/09 2/10 2/11 12/11 5/13.ELLI Default Rates – European Leveraged LoansDefault Rate by Principal Amount Default Rate by Issuer CountTextSource: LCD - Leveraged Commentary & Data
  8. 8. Themes To Watch ForText• Given the buoyant equity markets, expect further IPOs from some sponsor-led companies, allowing them toreturn cash back to their LPs.• YTD CLO issuance at €1.34B, with still a few more managers and vehicles on the forward pipeline.However, new directives from the EBA could hinder new CLO issuance.• Further spread / yield compression is expected, as issuers use capital markets to essentially play loaninvestors against bond investors to get the best terms possible.• Global co-mingled funds being launched, combining loans and high yield bonds, with a focus on both US andEurope.
  9. 9. pauseTextCopyright 2013 Standard & Poors, 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, reverseengineered, 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 beused 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&PParties) 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 PARTIESDISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR APARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS,THAT THE CONTENT’S FUNCTIONING WILL BE UNINTERRUPTED OR THATTHE 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 andopportunity 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 recommendationsto 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.TheContent 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 makinginvestment 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&Phas 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 anyinformation 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, certainbusiness 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 certainnon-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 todisseminate its opinions and analyses. S&Ps public ratings and analyses are made available on its Web sites, www.standardandpoors.com (free of charge), and www.ratingsdirect.comand www.globalcreditportal.com (subscription), and may be distributed through other means, including via S&P publications and third party redistributors. Additional informationabout our ratings fees is available at www.standardandpoors.com/usratingsfees.Text

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