1st Quarter leveraged loan market analysis - US

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With the bulls running, issuers rushed to refinance seasoned loans and finance dividends. Leveraged loan volume climbed to a post credit crunch high between January and March. Two-thirds were refinancings, however. Thus, the market's technicals tilted further in favor of issuers.


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1st Quarter leveraged loan market analysis - US

  1. 1. TextUS Leveraged Finance Market Update April, 2013 Steve Miller - Managing Director
  2. 2. New-Issue Loan Volume – by Year$550B Text Pro Rata Institutional$440B$330B$220B$110B $0B 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1Q12 1Q13 Source: LCD - Leveraged Commentary & Data
  3. 3. S&P/LSTA Index – Average Price9896 94 91 89 3/11 5/11 7/11 9/11 11/11 1/12 3/12 5/12 7/12 9/12 11/12 1/13 3/13Source: LCD - Leveraged Commentary & Data
  4. 4. CLO Issuance$10B$8B$6B$4B$2B$0B 3/12 4/12 5/12 6/12 7/12 8/12 9/12 10/12 11/12 12/12 1/13 2/13 3/13 Source: LCD - Leveraged Commentary & Data
  5. 5. S&P/LSTA Index Loans Outstanding$565B$552B$539B$526B$513B$500B 5/11 6/11 7/11 8/11 9/11 10/11 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 1/13 2/13 3/13 Source: LCD - Leveraged Commentary & Data
  6. 6. Average New-Issue Clearing Yield of First Lien Loans All-BB All-B 9% 8% 7% 5% 4% 3% 3/11 5/11 7/11 9/11 11/11 1/12 3/12 5/12 7/12 9/12 11/12 1/13 3/13 Source: LCD - Leveraged Commentary & Data
  7. 7. Covenant-lite as a percent of S&P/LSTA Index4030 20 10 0 1/4 9/4 5/5 1/6 9/6 5/7 1/8 9/8 5/9 1/10 9/10 5/11 1/12 9/12 3/13Source: LCD - Leveraged Commentary & Data
  8. 8. Loan Default Rate 12%10% 7%5%2%0% 12/98 8/00 4/02 12/03 8/05 4/07 12/08 8/10 3/13Source: LCD - Leveraged Commentary & Data
  9. 9. Loan Market – Outlook • Lackluster calendar • Retail/institutional demand remains strong • CLO market choppier • Still positive bias persistsSource: LCD - Leveraged Commentary & Data
  10. 10. Follow LCDwww.lcdcomps.comnews, analysis, research, archiveswww.linkedin.com/groups/LCD-Leveraged-Loan-Group-2092432LCD Leveraged Loan Group ... 10,000+ contactswww.twitter.com/lcdnewsHeadlines, market chatterwww.facebook.com/lcdcomps/Daily Playbook, headlines, video analysis www.leveragedloan.com Free website covering the leveraged loan market www.highyieldbond.com Free website covering the HY market
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