US Leveraged Loan Market Analysis, January 2012


Published on

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

Connect with LCD 
Like LCD on Facebook for monthly analysis on LBO/Private equity stats, as well as Default/Restructuring analysis.

There’s some 7,000+ market contacts in LCD’s Leveraged Loan Group

News, commentary, other leveraged finance info 


Published in: Economy & Finance
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

US Leveraged Loan Market Analysis, January 2012

  1. 1. Leveraged Loan Update January - 2012Steve Miller - Managing Director
  2. 2. 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
  3. 3. Leveraged loan returns in the black (again) 60% 35%10%-15%-40% 1997 1999 2001 2003 2005 2007 2009 2011Source: LCD - Leveraged Commentary & Data
  4. 4. 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)($11) 12/10 1/11 2/11 3/11 4/11 5/11 6/11 7/11 8/11 9/11 10/11 11/11 12/11 Source: LCD - Leveraged Commentary & Data
  5. 5. Forward Calendar of M&A-Related Loans ($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
  6. 6. 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
  7. 7. 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
  8. 8. 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
  9. 9. 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?
  10. 10. Follow LCDwww.lcdcomps.comnews, analysis, research, Leveraged Loan Group ...7,000+, market Playbook, headlines, video analysis
  11. 11. Copyright 2011 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 part thereof (Content) may bemodified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permissionof S&P. The Content shall not be used for any unlawful or unauthorized purposes. S&P, its affiliates, and any third party providers, as well as their directors, officers,shareholders, employees or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness or availability of the Content. S&P Parties are notresponsible for any errors or omissions, regardless of the cause, for the results obtained from the use of the Content, or for the security or maintenance of any datainput by the user. The Content is provided on an "as is" basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUTNOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWAREERRORS OR DEFECTS, THAT THE CONTENT’S FUNCTIONING WILL BE UNINTERRUPTED OR THAT THE CONTENT WILL OPERATE WITH ANYSOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable 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) inconnection with any 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 are expressed and not statements of fact orrecommendations to purchase, hold, or sell any securities or to make any investment decisions. S&P assumes no obligation to update the Content followingpublication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management,employees, advisors and/or clients when making investment and other business decisions. S&P’s opinions and analyses do not address the suitability of any security.S&P does not act as a fiduciary or an investment advisor. While S&P has obtained information from sources it believes to be reliable, S&P does not perform an auditand undertakes no duty of due diligence or independent verification of any information it receives.S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As aresult, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintainthe confidentiality of certain non-public information received 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 securities or from obligors. S&P reservesthe right to disseminate its opinions and analyses. S&Ps public ratings and analyses are made available on its Web sites, (free of charge),and and (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