TextEuropean Leveraged Finance Market Update               May, 2012        Sucheet Gupte - Director
www.LeveragedLoan.com
European Market TrendsText       Market slowdown, with the sovereign debt crisis       returning to center stage in April ...
European Loan Flow Name Prices    100     99     97                                               Text      96      94    ...
European HY Bond Flow Name Prices    106    102     98     94                                  Text     89     85     81  ...
ELLI Multi-currency Loan Return (monthly)     3.0%                                                   April 2012:      +0.2...
ELLI Returns for PIIGS vs. Non-PIIGS                  ELLI performs in line with broader markets:.   Source: S&P European ...
New-issue: Loans vs. HY Bonds (monthly)            12                                                          HY bonds - ...
Cross-Border Leveraged Finance Volume            30.0                                                               Europe...
ELLI Default Rates – European Leveraged Loans                 Default Rate by Principal Amount                        Defa...
Looking Aheadout      • Sovereign debt crisis encourages opportunistic transactions      during periods of ‘risk-on’.     ...
Text          Copyright 2012 Standard & Poors, a division of The McGraw-Hill Companies, Inc.No content (including ratings,...
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May 2012, European Leveraged Loan Market Analysis

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After Greece's restructuring, the market regained its confidence and players were willing to again take risks. Inflows and volume were positive, while the secondary market finished the month down a bit.

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May 2012, European Leveraged Loan Market Analysis

  1. 1. TextEuropean Leveraged Finance Market Update May, 2012 Sucheet Gupte - Director
  2. 2. www.LeveragedLoan.com
  3. 3. European Market TrendsText Market slowdown, with the sovereign debt crisis returning to center stage in April ... • Primary Market: Both loans and bonds saw a lack of substantial activity. • Secondary Market: Both loan and high yield bonds bids fell in the secondary. • Default rates fell during the month though are expected to rise during the year.
  4. 4. European Loan Flow Name Prices 100 99 97 Text 96 94 93 91 1/11 3/11 5/11 7/11 9/11 11/11 1/12 3/12 4/12. Source: LCD - Leveraged Commentary & Data
  5. 5. European HY Bond Flow Name Prices 106 102 98 94 Text 89 85 81 1/11 3/11 5/11 7/11 9/11 11/11 1/12 3/12 4/12. Source: Bloomberg
  6. 6. ELLI Multi-currency Loan Return (monthly) 3.0% April 2012: +0.24% Text March 2012: + 0.99% Jan-Apr 2012: + 4.62% Jan-Apr 2011: + 4.78% 1.8% 0.5% (0.8%) (2.0%) 2/10 4/10 6/10 8/20 10/10 12/10 2/11 4/11 6/11 8/11 10/11 12/11 2/12 4/12. Source: S&P European Leveraged Loan Index
  7. 7. ELLI Returns for PIIGS vs. Non-PIIGS ELLI performs in line with broader markets:. Source: S&P European Leveraged Loan Index
  8. 8. New-issue: Loans vs. HY Bonds (monthly) 12 HY bonds - Jan-Apr 2012 = 36% lower than 2011 Text Loans - Jan-Apr 2012 = 48% lower than 2011 9€billions 6 3 €1.4B €1.4B 0 3/11 4/11 5/11 6/11 7/11 8/11 9/11 10/11 11/11 12/11 1/12 2/12 3/12 4/30 . Source: LCD - Leveraged Commentary & Data
  9. 9. Cross-Border Leveraged Finance Volume 30.0 European borrowers going to US US borrowers going to Europe 22.5€billions 15.0 7.5 0 2007 2008 2009 2010 2011 Jan-Apr 2011 Jan-Apr 2012 . Source: LCD - Leveraged Commentary & Data
  10. 10. ELLI Default Rates – European Leveraged Loans Default Rate by Principal Amount Default Rate by Issuer Count 16% 16% 12% 12% 8% 8% Text 4% 4% 0% 0% 2/09 3/10 4/11 4/12 2/09 2/10 2/11 4/12. Source: LCD - Leveraged Commentary & Data
  11. 11. Looking Aheadout • Sovereign debt crisis encourages opportunistic transactions during periods of ‘risk-on’. • Issuers will continue to tap US market, and will perform bond-for-loan takeouts. • Some arrangers more comfortable underwriting senior secured bridge loans to high yield, then flexing and structuring capital structure. • The flow of amendment requests from issuers will continue. • May could prove to be yet another bumper month for inflows.
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