US Leveraged Loan Market Analysis, January 2012
 

US Leveraged Loan Market Analysis, January 2012

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Market technical bias improved during 2011 home stretch, but conditions remain fragile. Looking ahead, visibility is low, capital markets still tracking with Eurozone instability. ...

Market technical bias improved during 2011 home stretch, but conditions remain fragile. Looking ahead, visibility is low, capital markets still tracking with Eurozone instability.

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US Leveraged Loan Market Analysis, January 2012 US Leveraged Loan Market Analysis, January 2012 Presentation Transcript

  • Leveraged Loan Update January - 2012Steve Miller - Managing Director
  • 2011: The Good, the Ugly and the Not-So-Bad Loan Returns versus S&P 500 10% S&P/LSTA Loan Index S&P 500 5% 0% -5% -10% 1/31/11 3/31/11 5/31/11 7/31/11 9/30/11 11/30/11Source: LCD - Leveraged Commentary & Data
  • Leveraged loan returns in the black (again) 60% 35%10%-15%-40% 1997 1999 2001 2003 2005 2007 2009 2011Source: LCD - Leveraged Commentary & Data
  • Change in loan outstandings vs. loan fund inflows, CLO Issuance ($bils.) $15 Change in outstandings CLO Issuance/Prime Fund Inflows $11 $8 $4 $0 ($4) ($8)($11) 12/10 1/11 2/11 3/11 4/11 5/11 6/11 7/11 8/11 9/11 10/11 11/11 12/11 Source: LCD - Leveraged Commentary & Data
  • Forward Calendar of M&A-Related Loans ($bils) 25191360 1/11 2/11 3/11 4/11 5/11 6/11 7/11 8/11 9/11 10/11 11/11 12/11 Source: LCD - Leveraged Commentary & Data
  • Leveraged loan prices rebound in 2011 after summer swoon 100 97 93 90 86 1/11 2/11 3/11 5/11 6/11 7/11 8/11 10/11 12/11 Source: LCD - Leveraged Commentary & Data
  • Average New-Issue Clearing Yield 8% 7% 6% 5% 4% 12/10 2/11 4/11 6/11 8/11 10/11 12/11Source: LCD - Leveraged Commentary & Data
  • Leveraged Loan Default Rate (%)1.51.1 0.8 0.4 0 1/11 3/11 5/11 7/11 9/11 11/11 Source: LCD - Leveraged Commentary & Data
  • Upcoming Trends• Sleepy January, as in lower profile deals• As goes the eurozone, so goes the leveraged finance market• Arrangers follow bond market’s lead• Amend-to-extend deals to test market?
  • Follow LCDwww.lcdcomps.comnews, analysis, research, archiveswww.linkedin.com/groups/LCD-Leveraged-Loan-Group-2092432LCD Leveraged Loan Group ...7,000+ contactswww.twitter.com/lcdnewsHeadlines, market chatterwww.facebook.com/lcdcomps/Daily Playbook, headlines, video analysis
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