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US Leveraged Loan Issuance Totals $130B in 1Q18

US leveraged loan issuance

Issuance of leveraged loans to U.S. institutional investors totaled $130 billion during the first three months of the year, the most since the record-shattering first quarter of 2017, according to LCD.

Institutional issuance mostly comprises non-amortizing “B” term debt, which is generally priced at a higher rate – thus providing a higher yield to investors – than amortizing term loans or revolving credits (pro rata debt).

Adding in the $37.9 billion of pro rata activity in the first quarter means there was $167 billion in total U.S. leveraged loan activity, the most since the first quarter of last year (when there was a record $209 billion in issuance).

US MA leveraged loan issuance

Of note, loan issuance backing M&A rebounded to $68 billion (institutional) during the quarter, nearly matching activity in the year-ago period. M&A loans are highly prized by investors, as these credits typically carry richer pricing than non-M&A loans. – Staff reports

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