The European leveraged finance primary and secondary markets had a strong September. Loan issuance was €3.82 billion in September 2013, while high yield issuance was €7.1 billion for the month. Secondary markets and the S&P European Leveraged Loan Index (ELLI) were up for September, and default rates were markedly lower. Check out LCD's new, free web sites, LeveragedLoan.com and HighYieldBond.com http://www.leveragedloan.com http://www.highyieldbond.com/ * Job postings * Online Loan Market and High Yield Primer * News and analysis * Market Stats Video presentation of these slides: http://youtu.be/WqW55Yw-2Rc Connect with LCD Facebook: http://www.lcdcomps.com/facebook Like LCD on Facebook for monthly analysis on LBO/Private equity stats, as well as Default/Restructuring analysis. LinkedIn: http://www.lcdcomps.com/linkedin There are over 10,000 market contacts in LCD's Leveraged Loan Group Twitter: http://www.twitter.com/lcdnews News, commentary, other leveraged finance info Web: http://www.lcdcomps.com Contact: anna_cini@sandp.com

1. Text
European Leveraged Finance Market Update
October, 2013
Sucheet Gupte - Director

2. European Market Trends
Text
• The European leveraged finance primary and secondary markets had a strong September.
• Loan issuance was €3.82B in September 2013, while high yield issuance was €7.1B for the month.
• Secondary markets were up:
Leveraged loan markets were up 30 bps to close at 100.13;
HY markets were up 132 bps to finish 103.63.
• According to JP Morgan HY research: estimated inflows into European HY funds for September
are estimated to be €391M, bringing the year to date number to €3.1B.
• The S&P European Leveraged Loan Index (ELLI) was up for September, with returns at 1.35%, slightly
below the 1.45% seen in August. This brings the YTD return to 6.15%.
• Just one CLO priced this month, Carlyle’s Global Market Strategies Euro CLO 2013-2, which was
upsized to €336M.
• Default rates were markedly lower.

3. Average Bid for European Loan Flow Name Composites
102
100
Text
98
96
94
92
90
3/11
.
5/11
7/11
9/11
11/11
Source: LCD - Leveraged Commentary & Data
1/12
3/12
5/12
7/12
9/12
11/12
1/13
3/13
5/13
7/13
9/13

4. European HY Bond Flow Name Prices
106
102
Text
98
94
89
85
81
3/11
.
5/11
7/11
Source: Bloomberg
9/11 11/11 1/12
3/12
5/12
7/12
9/12 11/12 1/13
3/13
5/13
7/13
9/13

5. ELLI Multi-Currency Loan Return
1.5%
September 2013:
August 2013:
Jan-Sept 2013:
Jan-Sept 2012:
Text
+ 1.35%
+ 1.45%
+ 6.15%
+ 7.33%
1.0%
0.6%
0.1%
-0.4%
9/12
.
10/12
11/12
12/12
Source: S&P European Leveraged Loan Index
1/13
2/13
3/13
4/13
5/13
6/13
7/13
8/13
9/13

6. Volume: New-Issue Loans vs. HY Bonds
18
HY bonds
Text
Loans
€billions
14
9
€7.1B
5
€3.8B
0
9/12
.
10/12
11/12
12/12
Source: LCD - Leveraged Commentary & Data
1/13
2/13
3/13
4/13
5/13
6/13
7/13
8/13
9/13

7. ELLI Default Rates – European Leveraged Loans
Default Rate by Principal Amount
Default Rate by Issuer Count
16%
16%
13%
13%
10%
10%
Text
6%
6%
3%
0%
2/09
.
3%
0%
2/09
2/10
2/11
12/11
Source: LCD - Leveraged Commentary & Data
9/13
2/10
12/11
2/12
9/13

8. Themes To Watch For
Text
• The forward calendar for new M&A transactions leaves a lot to be desired.
With the end of the year approaching, parties might just hold out on transactions
until next year.
• CLO forward calendar is still strong. As of last week, LCD counted 7 transactions
at €2.4 billion.
Even with the increase in new issue CLOs, there is still a significant shortfall that
needs to be made up due to the number of CLOs that will be past their
reinvestment periods.

9. Text
Text
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