Lack of loan supply contributes to technical pressures....pushes secondary market higher

European Chart of the Week: 29 April 2019

The leveraged loan market has been marked recently by limited new loan supply, resulting in a technical backdrop that has pushed secondary market prices higher.

With limited deal flow opportunities to choose from in the primary market, lenders have had to focus more of their attention on the secondary market as they seek to put money to work. Leveraged loan issuance so far in April has totalled EUR 8bn, while year-to-date volume is at EUR 46bn, down 34% year-over-year.

Against this backdrop of modest new loan supply, average bids in the secondary market have climbed by 55 bps this month to an average of 98.41. At the same time, the par-plus share is up by 20 percentage points to 33%. On a year-to-date basis, secondary market prices are up by over 100 bps on average, helping push total returns close to 3%.

CLOs’ appetite for loans remains strong, with 6 deals totalling EUR 2.5bn pricing already this month and additional deals in the warehouse phase. The year-to-date new issue CLO volume of EUR 9.4bn is ahead of last year’s total at this point.

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.

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.

Debtwire Product Trial

Get these unique insights and more with Debtwire

Debtwire gives fixed income professionals an edge in leveraged finance, distressed debt and direct lending.

Request Trial

Debtwire Events
Debtwire transformed the market and quickly became the leading provider of expert news, data and analysis on global leveraged credit. With global breadth and local depth, our end-to-end coverage goes behind the scenes from primary issuance to the first sign of stress through restructuring and beyond. Subscribers trust Debtwire – the pioneer in the industry – for comprehensive coverage across geographies, companies and asset classes. Backed by Debtwire’s team of experts and award-winning content, our events offer attendees an unrivaled perspective.