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European Leveraged Loan Default Rate Dips to 1.4%, From 2.1%

european leveraged loan default rate

The European leveraged loan default rate hit a low 1.4% in January, down from 2.1% in December. In the 12 months ended Jan. 31, the European Leveraged Loan Default Index tracked €1.2 billion of institutional loan defaults and restructurings, down from €2 billion at the end of the prior month. – Staff reports

This story first appeared on www.lcdcomps.com, LCD’s subscription site offering complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here

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European Leveraged Loans See Weakest January Since 2008 (Though They’re Positive)

january leveraged loan returns - europe

Although the European leveraged loan market remained relatively isolated from the broad volatility that hit the U.S. market and European high-yield bonds, leveraged loans tracked by the S&P European Leveraged Loan Index (ELLI) endured the worst opening month of any year since 2008, gaining just 0.12% in January (excluding currency).

Of course, everything’s relative. While loan returns in Europe are lagging vs years prior, they soaring compared to in the U.S.

Leveraged loans in the States lost 0.65% in January, the eighth straight decline for that market. That’s a record, surpassing even the six months spent in the red during the very dark days of 2008. – Staff reports

This story first appeared on www.lcdcomps.com, LCD’s subscription site offering complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here

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Leveraged Loans: Europe-US Yield Differential Widens; Traders Eye Relative-Value Play

secondary loan yields, US v Europe

The yield differential between the U.S. and European leveraged loan markets continues to widen as the U.S. is hit by growing concerns about the credit cycle, as well as exposure to sectors under pressure (energy).

For the week ended Jan. 29, the discounted yield to maturity on the S&P/LSTA Leveraged Loan Index reached 6.88%, versus 5.17% on the S&P European Leveraged Loan Index (ELLI) – a 172 bps difference. At the end of December the differential was 151 bps, and at the end of November it was 117 bps.

Although secondary yields have started to rise slightly at the start of this year in Europe, the loan market on this side of the Pond remains relatively isolated from the broad volatility that hit secondary bonds, and which resulted in a near-silent high-yield bond primary during January. – Isabell Witt

This story first appeared on www.lcdcomps.com, LCD’s subscription site offering complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here

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Europe: Coleman, Marsh promoted to new EMEA roles at Goldman Sachs

Goldman Sachs has promoted Denis Coleman and Michael Marsh to new roles as head of the EMEA financing group and head of EMEA leveraged finance, respectively.

In his new role, Coleman will focus on continuing to grow Goldman Sachs’ franchise and integrating its financing businesses across equity, credit, and derivative products in the region.

Coleman has been at the bank for 20 years, and was named managing director in 2005 and partner in 2008. During his time he has worked in various divisions including Capital Markets in the fixed income, currency and commodities division, and the investment banking division (IBD), where became co-head of loan capital markets. In 2008 he was named co-head of leveraged finance, and in 2009 he was named head of EMEA credit finance.

Meanwhile, as head of EMEA leveraged finance, Marsh will work with Littleton Glover, head of EMEA leveraged finance origination, to focus on the bank’s client relationships and driving commercial opportunities in the region. He is currently head of EMEA high-yield and leveraged loan capital markets.  He joined Goldman Sachs in 2006, and was named managing director in 2008 and partner in 2014.

In addition, Jim Esposito, co-head of the global financing group, will join the bank’s securities division as chief strategy officer. Prior to becoming co-head of the global financing group, Esposito was head of the EMEA financing group for two years, and before that, he was chief operating officer of IBD. He joined Goldman Sachs in 1995 as a salesperson in FICC for emerging markets debt, and was named managing director in 2002 and partner in 2006. — Staff reports

This story first appeared on www.lcdcomps.com, LCD’s subscription site offering complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here

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European High Yield Bond Issuance Off to Slowest Start Since 2009

european high yield issuance - january

What a difference a year makes.

By this time in 2015 the European high yield bond market had priced a record January volume of €7.3 billion, from 15 trades (2013 holds the record January deal count of 22).

Then there’s 2016. This month has hosted two issuers – Telecom Italia and Atalian. What’s more, these two transactions total just €900 million, which is the lowest January primary deal count and volume recorded by LCD since 2009.

Of course, the high-yield primary has been impacted by the wider turmoil across financial markets, which has caused secondary cash prices to dip sharply, and in turn has led to fund outflows, stoking fears that ongoing outflows will exacerbate the falling cash prices. – Luke Millar

Follow Luke on Twitter for news and insight on the European leveraged finance market.

This story – which includes additional analysis – first appeared on www.lcdcomps.com, LCD’s subscription site offering complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here

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Europe: LBO Loans Race Out of Gate to Start 2016

europe LBO buyout volume

The buyout market is off to a swift start in Europe, with an array of deals launching to syndication in the opening weeks of the year. Launches include LGC, Infinitas, Euro Garages, Webhelp, Hunkemoller, Solar Winds, Saverglass, and Armacell, while B&B Hotels, Element Materials, Solera and others are waiting in the wings.

As of Jan. 18, loan issuance to support these buyouts amounts to €3.1 billion of paper hitting the European market, which is in pursuit of the €21 billion target set in 2015 from 62 transactions. – Ruth McGavin

Follow Ruth on Twitter for leveraged loan news  and insight.

This story first appeared on www.lcdcomps.com, LCD’s subscription site offering complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here

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YouTube: 4Q 2015 European leveraged loan market analysis

LCD’s video analysis detailing 2015 fourth-quarter activity in the European leveraged loan market, and a look at 2016, is now on YouTube.

The 2015 market could not match 2014 in terms of volume, but it did post impressive returns – at least compared to its counterpart in the U.S. LCD’s Ruth McGavin takes a look at the market, and what might lie ahead this year. Charts in the video:

– European leveraged loan volume 

– Leveraged loan repayments vs CLO issuance 

– Secondary loan bids, Europe vs US

– Returns by assets class: loans, bonds, equities

– Leveraged loan yields, US vs Europe

– Loan forward calendar

The URL:

https://youtu.be/GhOyfFxIAKk

Click here to download PDF slides of the video via Slideshare.

URL for the slides:

http://www.slideshare.net/lcdcomps/european-leveraged-loan-market-analysis-4q-2015

While you’re on YouTube please subscribe to LCD’s YouTube Channel – that way you won’t miss any LCD videos. You can also subscribe by clicking on the link to the right of any LCD News email, or here:

http://www.youtube.com/user/LCDcomps

If you’d like to embed any LCD video on a web page or in other digital media, it’s simple via the “embed” button on the YouTube page for the video. You can also embed the slides via Slideshare.

This story first appeared on www.lcdcomps.com, LCD’s subscription site offering complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here

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S&P: Potential 2016 Downgrades in Europe more than Double Potential Upgrades

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The European economic landscape in 2016 could be bumpy, if the number of corporates poised for a downgrade is any indication, according to S&P.

As of Dec. 31, 2015, there were 153 such entities, compared to 80 that were poised for an upgrade.

What might be the most active sector next year? Financial institutions have the highest concentration of potential downgrades (39). They also have the most potential upgrades (18). – Tim Cross

You can access the full report via S&P’s Global Credit Portal here

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Macquarie Cap Hires Briggs as Head of Principal Transactions

Hugh Briggs has been appointed head of principal transactions in Europe for Macquarie Capital, according to a company statement. He will be based at Macquarie’s London office, reporting to Daniel Wong, head of Macquarie Capital Europe, and Alex Harvey, global head of principal transactions, Macquarie Capital.

Briggs brings more than 20 years’ experience across private equity, principal investing, and leveraged finance to the role. His previous roles include head of capital markets at CVC Capital Partners, director at DB Capital/MidOcean Partners, and working as a private investor. He also co-founded Hawthorn Leisure, a company that has acquired and now operates 350 pubs in the UK.

Macquarie’s Principal Transactions Group (PTG) is the principal investing arm of Macquarie Capital, and seeks to become a capital partner by investing alongside clients and growth companies globally. Macquarie Capital is the corporate advisory, capital markets, and principal investment arm of Macquarie Group, and since 2008 it has invested more than £2 billion in capital across a range of industries, structures, and jurisdictions. — Staff reports

This story first appeared on www.lcdcomps.com, LCD’s subscription site offering complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here

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European Leveraged Loan Default Rate Holds at 2.1% in December

european leveraged loan default rate

The lagging 12-month default rate by principal amount for the S&P European Leveraged Loan Index (ELLI) was unchanged in December, at 2.1%. The measure stood at 1.4% in October, and is now at the highest level since July 2015, when it was 2.4%.

In 2015 the ELLI tracked €2 billion of institutional loan defaults and restructurings, down from €5 billion during the prior year. – Staff reports

This story first appeared on www.lcdcomps.com, LCD’s subscription site offering complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here