Leveraged Commentary & Data (LCD)

PitchBook LCD Leveraged Loan & Private Credit Webinar Please join PitchBook LCD on Wednesday, July 17, for our latest Leveraged Loan & Private Credit Webinar. Complimentary registration: https://pitchb.co/rH4Gn9 Event details: Date: Wednesday, July 17, 2024 Time: 10 a.m. ET Duration: 60 minutes In short: It was a record-shattering second quarter, with opportunistic loan activity soaring, credit spreads dwindling anew and the all-important leveraged finance pendulum swinging back toward the private credit market, after decidedly favoring syndicated lenders during the first three months of 2024. During this webinar we’ll also look at where leveraged finance buyside, sellside and advisory pros think the market will take us during the remainder of the year, and beyond (yes, M&A is on its way). Featuring: Marina Lukatsky, Global Head of Credit Research Rachelle Kakouris, Director, Research Abby Latour, Managing Editor, US Private Credit Glen Fest, Sr. Reporter, US CLOs Tim Cross (moderator), Editor-in-Chief PitchBook

US Credit Markets Quarterly Wrap: PitchBook’s LCD’s comprehensive analysis of the syndicated loan, private credit, CLO and high-yield markets, plus a look at what’s in store for the rest of ’24. In the just-released edition (30 pages, 70 charts): -         The US credit markets, in 6 charts -         Syndicated loan demand surge leads to record activity -         Private credit lenders strengthen defenses against refi, repricing wave -         Tailwinds strengthen as CLO markets sets record issuance pace -         High-yield refinancings hit three-year peak as spreads contract -         US Leveraged Finance Survey: Buyside, sellside, advisors weigh in on direction of market -         Record global loan activity masks lackluster M&A, but green shoots emerge. You can download a complimentary copy of the Quarterly here: https://lnkd.in/eU6FVkF5 PitchBook Marina Lukatsky Abby Latour Rachelle Kakouris Claire McDonnell Zack Miller Glen Fest #credit #leveragedloan #PrivateEquity

Where will the credit markets take us in 2024’s second half? Buyside, sellside and advisory pros weigh in via PitchBook LCD’s just-completed US Leveraged Finance Survey: A few highlights: ·        M&A activity will return, though at what pace? ·        Equity contributions on those deals are likely to fall from current levels ·        Leverage, meanwhile, will increase ·        The BSL market will see increased allocations (private credit, too) The survey polled market professionals between June 14 and June 24. You can access the full results here: https://lnkd.in/eXhvU92d PitchBook Rachelle Kakouris #credit #PrivateEquity #PrivateCredit

Private credit providers and PE shops are taking increasing interest in IT MSP companies (tech-focused managed service providers). Sponsors are attracted to these entities because they inhabit a large, fragmented market, making them prime candidates for buy-and-build strategies. Historically, most MSP deals have entailed a merger of equals. But due to the growth of these companies many are now ripe for recaps, bringing larger sponsors and other potential buyers into the picture. There’s much more on this burgeoning segment of the private credit sector here, courtesy PitchBook LCD’s Claire McDonnell: https://lnkd.in/eTTdjFek PitchBook #PrivateCredit #Credit #PrivateEquity

It was another dizzying quarter for the US syndicated loan market, with $405 billion in overall activity, mostly via a ceaseless parade of borrowers repricing existing debt lower (along with what was relatively subdued new loan issuance and a host of refinancings). That number is a record, and puts the 2024 YTD pace for overall primary market activity at $736 billion, which would be another record. There’s much more on the frenetic 2Q loan market activity here: https://lnkd.in/emDNY6H3 PitchBook Marina Lukatsky #credit #leveragedloan #PrivateEquity

Big news: LCD’s CLO and BDC datasets have been integrated into the PitchBook platform, the premier data and research provider for the private and public equity markets. This addition, along with LCD’s Research and News offerings, creates the industry’s most powerful solution for credit market participants. CLOs, of course, are the main source of what is booming investor demand across the loan markets, while BDC holdings provide transparency into the all-important private credit segment. You can read more about the new PitchBook Credit product here: https://lnkd.in/ebRxyZeQ #credit #PrivateEquity #leveragedloan PitchBook

With investor appetite for risk increasing and issuance of new loans lacking, the US #leveragedloan repricing wave is nearing $400 billion year to-date, according to the FT (and PitchBook LCD data). That's more than 25% of the entire asset class. #credit Harriet Clarfelt Financial Times Marina Lukatsky PitchBook Antoine Gara https://lnkd.in/eQr4yjfv

The refinancing wave dominating the broadly syndicated loan market this year has taken root in private credit, as that segment works to keep pace with declining borrowing spreads and epic investor demand. Indeed, in recent months, private credit providers have had to slash spreads to reflect the new market realities, with more than a few borrowers electing to refinance unitranche loans and second-lien debt in the bank-led loan market. Much more, here: https://lnkd.in/etnKqB8u PitchBook Abby Latour Marina Lukatsky #PrivateCredit #PrivateEquity

Leveraged loan borrowers are proving resilient in the higher (for longer) rate environment. Helped by modest earnings growth, interest coverage at publicly filing Morningstar LSTA Index issuers ticked higher for a second straight quarter, though it remains well off levels seen in 2022, when the Fed’s rate hike regime had yet to hit full force. This resilience has allowed more companies to inch back from the brink of distress. One metric: The share of ‘outer-edge” borrowers – those with leverage topping 7x – has eased to its lowest level since 2019. There’s more credit stats in PitchBook LCD’s 1Q issuer earnings analysis: https://lnkd.in/etdFkN4m John Atkins PitchBook #credit #leveragedloan #PrivateEquity

High base borrowing rates continue to buoy US leveraged loan performance, with the asset class returning 0.94% in May – its strongest month in 2024 – bringing the YTD number to 4.04%, according to the Morningstar LSTA US Leveraged Loan Index. Sustained investor demand is contributing to the returns picture, as well. Loan prices hit a two-year high last month, with more than 60% of Index constituents priced at par or better, the most since 2018.  #credit #leveragedloan Marina Lukatsky PitchBook