Marlborough Partners’ Q2 2017 Report
The firm is pleased to announce the report covers both the UK and, for the first time, the DACH Leveraged Loan markets as a result of the ever growing Pan-European presence of Marlborough Partners.
The report, analysing data from a number of sources, shows European leveraged loan volumes were c. €58bn for H1’17 which was c. 1.9x higher compared to H1’16, reflecting the ever continuing theme of ‘too much money’ chasing ‘too little product’. The European high yield market also grew in tandem with its loan market counterpart, with volumes almost doubling compared to H1’16.
With market yields falling in the latter half of 2016 and continuing in the first half year of ‘17, activity in the European Leveraged Loan market has been dominated by opportunistic refinancings and repricings, as borrowers sought to take advance of lower pricing. The ongoing trend of tighter spreads is driven by strong underlying market conditions, imbalance in supply and demand and a lack of investor pushback.
The report also considered the looming implementation of ECB leveraged lending guidelines in November 2017. A number of important considerations are raised in the report such as the fact that a significant number of bank participants will not be covered by the guidelines and that the leverage cap of 6x gross leverage currently includes undrawn facilities including baskets, freebies, incrementals and accordions which would potentially mean capturing the vast majority of leveraged loans.
Marlborough Partner, David Parker, said: “4 years ago banks actively operating in the US leveraged finance market went through a protracted process of understanding and implementing the Fed guidelines. Given the ECB guidelines do differ in some respects to the Fed equivalent, we expect banks operating in the European leveraged finance market to also go through a length process of implementation. Having a view institution by institution of their approach to following these guidelines will be an important consideration for a prospective borrower”
For further information, please contact:
David Parker +44 (0)203 053 3601 email@example.com
About Marlborough Partners
Marlborough Partners, based in London and Frankfurt, provides specialist, independent advice to private equity firms, portfolio companies and corporates, on sourcing and structuring debt and other non-equity finance. Since 2003, the Marlborough team has advised on 204 completed transactions – from the simple to the highly complex – comprising over €54bn of primary market debt issuance, waivers and amendments and loan restructurings in eleven European jurisdictions. For further information, visit www.marlboroughpartners.com