Loan issuance has shifted more toward the riskier end of the credit spectrum in recent years, and this trend has continued in 2019. Institutional loans rated B+ and below have accounted for 88% of issuance year-to-date, up from 74% in full year 2018.

In particular, B+ and B rated credits have dominated institutional loan issuance so far in 2019, accounting for 87% of rated volume compared to 69% in full year 2018. This trend has continued in May, with B+ credits alone accounting for nearly three-quarters of issuance.

While overall institutional loan issuance is down significantly this year, there has also been some degree of shift in the use of proceeds, with sponsors availing of market conditions to pay themselves a dividend. In turn, the share of loan volume composed of dividendrecaps has climbed by over 10 percentage points from last year to 15%.

In contrast to the leveraged  loan market, the high yield bond market has moved toward higher rated credits this year, with issuance concentrated in the BB rating categories, with BB+, BB and BB-paper accounting for 68% of issuance year-to-date.

-Colm (CJ) Doherty colm.doherty@acuris.com For access to our comprehensive news, analysis and data on the global loan and bond markets, please subscribe to Debtwire Par.

Colm (C.J.) Doherty Global Head of Primary Market Analysis Debtwire

Colm Doherty is Debtwire’s Global Head of Primary Market Analysis. He is responsible for leading the production of primary market analysis and reports focused on the leveraged loan and high yield bond markets. Prior to joining Debtwire, Colm was Director of Analysis at Thomson Reuters LPC covering leveraged loans, CLOs and high yield bonds.

Colm has a B.A. in Economics & Legal Science from National University of Ireland Galway and an MSc. in Accounting & Finance from Ulster University.