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Take one day out of the office to attend our Leveraged Finance event at Debtwire Week (17 October) and get up-to-date on all the risks and opportunities in the European market.
Chasing the money – buyout activity
Leveraged loan issuance from buyout activity dropped by 40% in the first half of 2019 year-on-year, at just EUR 17.33bn compared to EUR 28.85bn in 2018. However, loan levels have increased quarter-on-quarter from 4Q18, when it hit rock-bottom, according to Debtwire Par data.
HY bond data for buyouts in 1H19 is even more dramatic, showing a 89% drop year-on-year.
With the proportion of deals with over 7x leverage increasing year-on-year to 14% in 1H19 compared to 10% in 2018 and 9% in 2017, and EBITDA addbacks ever more plentiful, we will ask speakers, have we reached the top?
Mariana Valle, Co-Deputy Editor, Europe, Debtwire leading a panel at Debtwire Week 2018
Direct lending and it’s impact on syndicated market
The frequency of issuance by direct lenders in the European market continues its upward trajectory of recent years. Transactions worth €4bn took place in the first six months of 2019, compared to just €2.7bn by the same point the previous year.
The size of deals is also getting larger, as direct lenders seek to deploy considerable firepower. €71bn has been raised for European direct lending strategies since 2017, including €17bn of commitments in 2019 alone. With several billion-plus transactions getting away this year already, funds have been tempting some borrowers away from the syndicated market.
By comparison, leveraged loan issuance had one of it’s quietest quarters in Q1 this year. The market hit it’s stride in June 2019 on the back of increased volume of new money and refinancings.
In the face of an uncertain outlook for deal activity, direct lending is no longer about fringe players. The bifurcation of the debt manager marketplace may see some of the larger players continue to impact deals that would typically have gone to the largecap syndicated market.
Enter the fantasy bond market
The one and only relative-value high yield bond investor panel returns to Debtwire Week. Three market participants talk through hypothetical bond prospectuses from the fantasy bond market as they talk through their due diligence work and answer the question everyone wants to know – would they buy it?
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