out                                TextEuropean Leveraged Finance Market Update             February, 2013                ...
European Market TrendsText       • Loan issuance was €7.5B in January 2013, while high yield         issuance was €7.1B.  ...
European Loan Flow Name Prices    100     99                                                      Text     97      96     ...
European HY Bond Flow Name Prices    106    102                                            Text     98      94      89    ...
ELLI Multi-Currency Loan Return    2.5%                                          January 2013:    + 1.18%                 ...
Volume: New-issue Loans vs. HY Bonds            15                                                         HY bonds       ...
ELLI Default Rates – European Leveraged Loans                 Default Rate by Principal Amount                        Defa...
Themes to watch forText  • Strong inflows into HY funds result in strong demand for HY issuers.  • Bond for loan-take-outs ...
Text          Copyright 2013 Standard & Poors, a division of The McGraw-Hill Companies, Inc.No content (including ratings,...
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February 2013, European Leveraged Loan Market Analysis

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Loan issuance was up at €7.5 billion in January, while high yield issuance was €7.1 billion. Secondary markets are up, loan markets went up 208 bps to finish the month at 99.42 while high yield markets are down 31 bps to finish the month at 102.64. Default rates fell.


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February 2013, European Leveraged Loan Market Analysis

  1. 1. out TextEuropean Leveraged Finance Market Update February, 2013 Sucheet Gupte - Director open pause Text
  2. 2. European Market TrendsText • Loan issuance was €7.5B in January 2013, while high yield issuance was €7.1B. • Estimated inflows into HY funds were €1.34B for the four weeks ending January 30th. Inflows for all of 2012 now stands €7.86B or almost 8 billion euros. • Secondary markets are up. Leveraged loan markets went up 208 bps to finish the month at 99.42. High yield markets are down 31 bps to finish the month at 102.64. • The S&P European Leveraged Loan Index (ELLI) finished the month up 1.18%. • Default rates fell lower during the month.
  3. 3. European Loan Flow Name Prices 100 99 Text 97 96 94 93 91 1/11 3/11 5/11 7/11 9/11 11/17 1/12 3/12 5/12 7/12 9/12 11/12 1/13. Source: LCD - Leveraged Commentary & Data
  4. 4. European HY Bond Flow Name Prices 106 102 Text 98 94 89 85 81 1/11 3/11 5/11 7/11 9/11 11/11 1/12 3/12 5/12 7/12 9/12 11/12 1/13. Source: Bloomberg
  5. 5. ELLI Multi-Currency Loan Return 2.5% January 2013: + 1.18% Text December 2012: + 0.72% January 2012: + 2.59% 1.9% 1.2% 0.6% -0.1% 12/11 1/12 2/12 3/12 4/12 5/12 6/12 7/12 8/12 9/12 10/12 11/12 12/12 1/13. Source: S&P European Leveraged Loan Index
  6. 6. Volume: New-issue Loans vs. HY Bonds 15 HY bonds Text Loans 11 €7.1B€billions 8 €7.5B 4 0 11/11 12/11 1/12 2/12 3/12 4/12 5/12 6/12 7/12 8/12 9/12 10/12 11/12 12/12 1/13 . Source: LCD - Leveraged Commentary & Data
  7. 7. ELLI Default Rates – European Leveraged Loans Default Rate by Principal Amount Default Rate by Issuer Count 16% 16% 13% 13% 10% 10% 6% Text 6% 3% 3% 0% 0% 2/09 2/10 2/11 12/11 1/13 2/09 2/10 12/11 2/12 1/13. Source: LCD - Leveraged Commentary & Data
  8. 8. Themes to watch forText • Strong inflows into HY funds result in strong demand for HY issuers. • Bond for loan-take-outs will continue to keep pace. The vast majority of January’s borrowers took advantage of HY market liquidity to refi existing debt, raising €5B of new bonds specifically for this purpose. Half of this paper was used to term-out loan maturities into bonds, the highest monthly tally since February 2012.• Peripheral issuers continue to access HY markets. Some have made their tax regimes far more amenable for issuers than before.• Sell-side bankers and sponsors are optimistic about M&A, provided there are no unexpected shocks to the system. There has already been a large loan and high yield offering for Liberty’s acquisition of Virgin Media.
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