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TextEuropean Leveraged Finance Market Update              January, 2013        Sucheet Gupte - Director
European Market TrendsText       • December loan issuance was nil, HY issuance was €1.5B.       • 2012 loan issuance was €...
European Loan Flow Name Prices    100     99                                                      Text     97      96     ...
European HY Bond Flow Name Prices    106    102                                           Text     98      94      89     ...
ELLI Multi-Currency Loan Return    2.5%                                        December 2012:   + 0.72%                   ...
Volume: New-issue Loans vs. HY Bonds            10                                                         HY bonds       ...
ELLI Default Rates – European Leveraged Loans                 Default Rate by Principal Amount                       Defau...
Themes to watch forText • Strong inflows into HY funds, resulting in strong demand for HY issuers.• Bond for loan-take-outs...
Text          Copyright 2012 Standard & Poors, a division of The McGraw-Hill Companies, Inc.No content (including ratings,...
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January 2013, European Leveraged Loan Market Analysis

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Loan issuance was nil in December, while high yield issuance was €1.5 billion. Secondary markets are up, loan markets went up 51 bps to finish the month at 97.34 while high yield markets are up 223 bps to finish the month at 103.04.


Check out LCD's new, free web sites, LeveragedLoan.com and HighYieldBond.com

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http://www.highyieldbond.com/


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Transcript of "January 2013, European Leveraged Loan Market Analysis "

  1. 1. TextEuropean Leveraged Finance Market Update January, 2013 Sucheet Gupte - Director
  2. 2. European Market TrendsText • December loan issuance was nil, HY issuance was €1.5B. • 2012 loan issuance was €28.5B, HY issuance was €36.4B. • Estimated inflows into HY funds were €245M for December, bringing estimated 2012 year-end number to €7.2B. • Secondary markets were up: Loan markets went up 51 bps to finish the month at 97.34 HY markets were up 223 bps to finish the month at 103.04. • In 2012, secondary loan markets were up 330 bps for the year, HY markets were up 13 points for the year. • The S&P European Leveraged Loan Index (ELLI) finished the month up at 0.72% and the year at 9.48%. • However, default rates climbed higher during the month.
  3. 3. European Loan Flow Name Prices 100 99 Text 97 96 94 93 91 1/11 3/11 5/11 7/11 9/11 11/17 1/12 3/12 5/12 7/12 9/12 12/12. Source: LCD - Leveraged Commentary & Data
  4. 4. European HY Bond Flow Name Prices 106 102 Text 98 94 89 85 81 1/11 3/11 5/11 7/11 9/11 11/11 1/12 3/12 5/12 7/12 9/12 12/12. Source: Bloomberg
  5. 5. ELLI Multi-Currency Loan Return 2.5% December 2012: + 0.72% Text November 2012: + 0.66% Jan-Dec 2012: + 9.48% Jan-Dec 2011: - 0.02% 1.9% 1.2% 0.6% -0.1% 12/11 1/12 2/12 3/12 4/12 5/12 6/12 7/12 8/12 9/12 10/12 11/12 12/12. Source: S&P European Leveraged Loan Index
  6. 6. Volume: New-issue Loans vs. HY Bonds 10 HY bonds Text Loans 8€billions 5 3 €1.5B 0 €0B 11/11 12/11 1/12 2/12 3/12 4/12 5/12 6/12 7/12 8/12 9/12 10/12 11/12 12/12 . Source: LCD - Leveraged Commentary & Data
  7. 7. ELLI Default Rates – European Leveraged Loans Default Rate by Principal Amount Default Rate by Issuer Count 16% 16% 13% 13% 10% 10% 6% Text 6% 3% 3% 0% 0% 2/09 2/10 2/11 12/11 12/12 2/09 2/10 12/11 12/12. Source: LCD - Leveraged Commentary & Data
  8. 8. Themes to watch forText • Strong inflows into HY funds, resulting in strong demand for HY issuers.• Bond for loan-take-outs will continue to keep apace.• Issuers from the Eurozone peripheral countries continue to access HY markets. Some have made their tax regimes far more amenable for issuers than before.• Sell-side bankers and sponsors are optimistic about M&A provided there are no unexpected shocks to the system.
  9. 9. Text Copyright 2012 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 Textpart thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in adatabase or retrieval system, without the prior written permission of S&P. The Content shall not be used for any unlawful orunauthorized purposes. S&P, its affiliates, and any third party providers, as well as their directors, officers, shareholders, employeesor agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness or availability of the Content. S&PParties are not responsible for any errors or omissions, regardless of the cause, for the results obtained from the use of theContent, or for the security or maintenance of any data input by the user. The Content is provided on an "as is" basis. S&PPARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANYWARRANTIES 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 THECONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties beliable 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 withany 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 areexpressed and not statements of fact or recommendations to purchase, hold, or sell any securities or to make any investmentdecisions. S&P assumes no obligation to update the Content following publication in any form or format. The Content should notbe relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/orclients when making investment and other business decisions. S&P’s opinions and analyses do not address the suitability of anysecurity. S&P does not act as a fiduciary or an investment advisor. While S&P has obtained information from sources it believes tobe 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 objectivityof their respective activities. As a result, certain business units of S&P may have information that is not available to other S&Pbusiness units. S&P has established policies and procedures to maintain the confidentiality of certain non-public informationreceived 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 pausesecurities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&Ps public ratings and analyses aremade available on its Web sites, www.standardandpoors.com (free of charge), and www.ratingsdirect.com andwww.globalcreditportal.com (subscription), and may be distributed through other means, including via S&P publications and thirdparty redistributors. Additional information about our ratings fees is available at www.standardandpoors.com/usratingsfees.

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