Leverage on loan deals moves lower in 1Q19

European Chart of the Week: 29 March 2019

Adjusted leverage on new loan deals moved lower in 1Q19, averaging 5.3x compared to 5.5x in the prior three quarters due to a decline in the share of highly levered deals. The share of deals levered greater than 6x fell to 17% in 1Q19, down from an average of 33% in full-year 2018.


EBITDA adjustments varied in size across deals, with deals backed by leveraged loans having an average addback of 17% of unadjusted EBITDA this year and a median addback of 12%.

The decline in leverage comes on the back of a quiet quarter in terms of leveraged loan issuance, with volume at EUR 23bn so far, down over 50% from the same period last year. On a more positive note for lenders, issuance has moved higher in each month this year, albeit from very low levels, totaling EUR 10.6bn so far in March. Lenders are hoping this upward trend continues in the second quarter.

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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.

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