Marlborough Partners, the independent debt advisory firm, today published its report on the European Leveraged Finance market for Q3 2017.
The report, analysing data from a number of sources, shows European leveraged loan volumes at Q3 stood at €85bn, up 71% YoY, with high yield bond volume for Q3 at €65.2bn which is significantly ahead of the YoY total of €43bn. These strong levels of volume have seen the recent trend of “too much money chasing too few deals” potentially beginning to reverse although questions remain as to whether this is likely to continue given the typical “lumpy” nature of leveraged finance volumes.
Finally, this edition of the Quarterly review also discusses how direct lending credit funds might behave in stressed scenarios. In the benign years that have followed the last credit cycle, while credit funds have rapidly grown market share, there has been a lack of stressed deals such that most funds remain untested. However, an uptick in stressed situations in 2017, driven largely by continued pressures in certain sectors such as retail and oil and gas services, has seen the emergence of certain behavioral traits.
Marlborough Managing Partner, Jonathan Guise, said: “For many years we have been asked how direct lending funds behave in stressed scenarios. This has been virtually impossible to answer given benign credit markets have resulted in an almost complete lack of stressed situations to test them. However, 2017 has seen a notable uptick in stressed situations involving direct lenders and a clearer picture is starting to emerge. The lessons learned so far will no doubt be extremely valuable when we inevitably enter the next cycle”.
For further information, please contact:
Jonathan Guise +44 (0)203 053 3602 firstname.lastname@example.org
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 218 completed transactions – from the simple to the highly complex – comprising over €55bn of primary market debt issuance, waivers and amendments and loan restructurings in eleven European jurisdictions. For further information, visit www.marlboroughpartners.com