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US Leveraged Loan Funds See 3rd Cash Inflow in Last 4 Weeks

us loan fund flows

U.S. leveraged loan funds recorded an inflow of $60 million in the week ended Aug. 3, according to the Lipper weekly reporters only. This wipes out last week’s net $15 million outflow and it represents the third inflow over the past four weeks for an infusion of $250 million over that span.

The reading was 35% attributable to the ETF segment. That contrasts with last week when there were outflows of $38 million from mutual funds filled in partially by ETF inflows of $23 million.

The trailing four-week average rises to positive $63 million this past week, from positive $43 million last week and from negative $84 million two weeks ago. The current observation is the most robust in nine weeks.

Year-to-date outflows from leveraged loan funds total $5.3 billion, based on outflows of $6 billion from mutual funds against inflows of $713 million to ETFs, or inverse 13%, according to Lipper.

The change due to market conditions this past week was almost nil, at positive $135 million, or just 0.2% against total assets, which were $61.8 billion at the end of the observation period. ETFs represent about 11% of the total, at $6.5 billion. — Matt Fuller

Follow Matthew on Twitter @mfuller2009 for leveraged debt deal-flow, fund-flow, trading news, and more.

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This story first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers 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: 107 Global Corporate Defaults so far in 2016

defaults by region

The global corporate default tally has grown to 107 as of yesterday, compared to 68 at this point in 2015, according to S&P Global Fixed Income Research. The last time the corporate default count was this high? In 2009, when there were a whopping 194.

The bulk of the 2016 defaults – 72 – come from the U.S., according to S&P. – Staff reports

This analysis is part of S&P Global Fixed Income’s weekly default analysis, which also details default by sector, a list/xls of 2016 defaults, and other analysis. It is available to S&P Global Credit Portal subscribers here.

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US Leveraged Loan Defaults Hit 16-Month High of 2.17%

leveraged loan default rate US

With two issuers defaulting in July—C&J Energy Services and Transtar— the U.S. leveraged loan default rate reached a 16-month high of 2.17%, up from 1.97% at the end of June, according to the S&P/LSTA Leveraged Loan Index.

Publicly traded C&J Energy, an oilfield services company, became the sixth loan issuer in the oil-and-gas space to default in 2016. S&P Global Ratings downgraded the company to D after it reached a second forbearance agreement due in part to a missed interest payment (within the month, the company filed for Chapter 11).

Despite the clear leveraged loan default trend line, the bulls can take solace in a few stats. The rates by principal amount and by number remain inside of their historical averages of 3.1% and 2.8%, respectively, according to LCD, an offering of S&P Global Market Intelligence.

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European CLO Issuance Hits 2.0-Era High of €2.56B

European CLO issuance

Those predicting a post-Brexit referendum surge of European CLO issuance appear to have called it right—at least over the near term—with July racking up the highest monthly issuance tally in the 2.0 era.

Following the vote there were some concerns that the market would halt as investors hugged the sidelines, given the uncertainty. But the relative calm and stability of the broader markets kept players active, enabling issuers prevented from accessing the primary ahead of the vote to price transactions.

All told, July’s supply reached €2.56 billion, well above the €1.82 billion notched up during March, the next-busiest month this year. The previous monthly volume record in the 2.0 era was June 2014, which hosted €2.49 billion of supply, according to LCD. – Sarah Husband/Andrew Park

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This story first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers 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 Issuance: €35.9B through July 2016

european leveraged loan volume

The European leveraged loan market saw €35.9 billion in new issuance during the first seven months of 2016, down some 19% from the same point last year, according to LCD.

european leveraged loan volume monthly

July’s new-issue loan volume totalled €5.5 billion, an impressive showing considering the market first had to shake off the volatility from the Brexit vote in late June. – Staff reports

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This story is part of LCD’s European Loan Market Wrap-up, written by Ruth Mcgavin. It first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers 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 Edges Lower in July, to 2.29%

european leveraged loan default rate

Despite Global Garden Products’ debt restructuring announcement at the end of the month, the default rate of the S&P European Leveraged Loan Index (ELLI) edged lower in July, to 2.29% by principal amount, from 2.54% at the end of June. In the 12 months ended July 31, the ELLI tracked €2.1 billion of institutional loan defaults and restructurings, up from €2 billion at the end of last year.

The ELLI default rate is calculated by summing up the par amount outstanding for issuers represented within the Index that have defaulted in the last 12 months, and dividing that by the total amount outstanding in the Index at the beginning of the 12-month period (excluding issuers that have already defaulted prior to this date).

For the purposes of this analysis, LCD defines “default” as (a) an event of default, such as a D public rating, a D credit estimate, a missed interest or principal payment, or a bankruptcy filing; or (b) the beginning stages of formal restructuring, such as the start of negotiations between the company and lenders, or the hiring of financial advisors. – Staff reports

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This story first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers 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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Despite Healthy Return, US Leveraged Loans Outpace Only Treasuries in July

returns by asset class

Leveraged loans were in the middle of the pack with respect to July returns, outperforming the 10-year Treasury yield but underperforming equities, high-yield bonds, and investment-grade bonds, according to LCD, an offering of S&P Global Market Intelligence.

The loan returns stats are per the S&P/LSTA Index – Staff reports

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This story first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers 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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With Brexit Worries Fading, US Leveraged Loan Returns Jump to 1.43% in July

US leveraged loan returns

The S&P/LSTA Leveraged Loan Index returned 1.43% in July as Brexit concerns faded and strong technical conditions again sparked gains.

The Index has gained in five consecutive months, though June’s 0.02% return was a function of interest income offsetting the slight market-value decline. – Kerry Kantin

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This story first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers 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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US Leveraged Loan Issuance: $11.1B Last Week

high yield bond issuance

U.S. leveraged loan issuance totaled $11.1 billion last week, following up on the $14.2 billion the previous week, according to LCD, an offering of S&P Global Market Intelligence. Year-to-date loan issuance totals $236 billion, compared to $264 billion during the same period one year ago. – Staff reports

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This story first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers 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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GreensLedge Prices $433M Anchorage Credit Funding CDO

GreensLedge Capital Markets today priced a $433 million CDO for Anchorage Capital Group, according to market sources.

Natixis Securities Americas was also a co-lead manager on the transaction.

Pricing details are as follows:

Anchorage CDO 2016-07-22

Similar to Fortress’s $633.6 million FDF Limited II, which priced on April 15, the transaction can hold up to 65% in second-lien loans and unsecured bonds.

The transaction will close on Aug. 29 with a non-call period ending on Oct. 28, 2018 and a reinvestment period ending on Oct. 28, 2021. The legal final maturity is on Oct. 28, 2033. — Andrew Park

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