Posts by LSEG

Just shy of US$2tr 2016 US syndicated loan volume is flat year over year

US arrangers pushed almost US$2 Tr through retail syndication in 2016, levels on par with 2015 totals but down modestly compared to the US$2.1tr raised in 2014. The year got off to a slow start as the market volatility that was observed in the oil and gas and commodities sectors in late 2015 carried over to the first quarter of 2016, dampening lender appetite and limiting the pipeline of deals…

2016 MM CLO volume hits highest level post credit crisis

While the upcoming risk retention rules have certainly slowed broadly syndicated CLO volume in 2016, the middle market has bucked the trend. Middle market CLO issuance has reached US$7.7bn so far in 2016, surpassing last year’s $5.8bn and reaching the highest level since 2007. This is a pleasant surprise as most managers that took LPC’s Middle Market Investor Survey at the beginning of the year were only expecting to see around US $4.5bn in issuance this year…

Flex factor highlights investor pushback in November

Flex activity in the U.S. institutional loan market favored investors in November. Thomson Reuters LPC’s Flex Factor registered an average flex score of 1.5 last month, signifying a higher ratio of investor friendly changes made to deal terms. It was the first time it has been above one since February’s average score of 3.5. In all, 19 deals flexed higher in November against 13 reverse flexes. It was the least amount of reverse flexes in a month since March…

U.S. CLO portfolio trade prices climb

U.S. CLO portfolio trade prices have climbed from their early 2016 levels. The weighted average purchase was 98.92 in September, with the average sale price at 97.31. For the October trades collected so far, the weighted average purchase price is at 99.24, while selling prices average 97.67. Selling prices were more dispersed than purchase prices in 3Q16, as a higher share of portfolio sales were in the sub-98 and par-plus categories. CLOs sold loans at higher prices in the third quarter, with 50% of sales in the par-plus category, up from 37% in 2Q16…

Primary yields widen slightly so far in November

Yields have widened slightly in November to the highest average since July. The average yield, assuming a three year term to repayment on first-lien institutional loans is in the 5.36% context so far in November, slightly up from 5.1% in October. Demand for loans remains strong, and some issuers continue to successfully tap the market to cut costs, but weaker credits are facing some pushback. In turn, the number of downward and upward price flexes are roughly the same so far this month. In contrast, downward price flexes outnumbered upward price revisions by 2.3 times in October…

European CLO Issuance

Issuance of European CLOs has reached a post-crisis high as jumbo investments in senior tranches have anchored issuance. European CLOs have seen year-to-date issuance of €14.7 billion across 36 deals, compared with the previous post-crisis high of €14.3 billion in 2014, when 34 deals were completed…

Downward flexes dominated in October

Downward flexes continued to dominate flex activity in October. There were 21 downward price flexes on first-lien institutional term loans in October and only 8 upward flexes. Both downward and upward price flexes were down from September which recorded 28 price cuts and 12 upward price revisions…

U.S. CLOs posted their best month since June 2015 with issuance of $8.4 billion in October, taking year to date issuance to $54.5 billion. In addition to new issuance, much of the energy in October was focused on refinancings and resets in advance of the upcoming risk retention deadline. After the new regulation comes into effect on December 24, compliance with risk retention rules will be required for deals that refinance…

Pricing soars on oil and gas borrowing base revolvers

After collapsing to a 10-year low of less than $30 in January, oil prices are now in the $50 per barrel range. While prices might have stabilized, the industry continues to suffer severe consequences. Defaults have escalated and recovery rates are down significantly from their historical levels. According to Moody’s, loans that are backed by reserves for exploration and production companies have fared better than other debt types…

This week we chat with Tod Trabocco, Managing Director at Cambridge Associates LLC. Cambridge is a leading investment advisor to…