cover image: European leveraged finance: A whole new world


European leveraged finance: A whole new world

24 Jan 2024

Banks that make debt Depressed deal activity and a There is a structural imperative commitments to borrowers when contraction in mainstream financing to transact built into the private underwriting leveraged loans and issuance has given dealmakers space markets model, and with large pools high yield bonds, with a view to and time to think of how to repurpose of undeployed capital to invest, sellin. [...] observe is the emergence of the acquisitions in the first half of 2023, There is no difference in default first private debt “CLOs”—where which ran in tandem with a shortage risk between private credit and managers are packaging up their of new LBO activity in the first half syndicated loans and bonds, and loans and then selling tranches of of the year. [...] 4 47 A series of rate hikes by the ECB, which pushed up base rates Adapting to change 19 69 to the highest levels observed in more than two decades, have In the face of these headwinds, borrowers have responded by €0.6 €4.8 hindered syndicated loan and high yield bond issuance across either holding out as long as possible before refinancing, in the €5.9 €6.9 the continent, with the German market b. [...] Interest rate stability will have climbed to a 15-year high in The decline in 2023, there is cautious optimism go a long way toward building a the UK, and the highest levels in the buyout deal value in that conditions for dealmaking and consensus around realistic capital Western Europe in European Union since the launch 2023, according to deal financing will improve in the structures for acquisiti. [...] According to the Financial Times, in order to retain the market investors placed orders in excess of share won during the past US$20 billion for the debt, enabling Worldpay to upsize the term loan part two years, introducing a new of the package from a starting point competitive dynamic into the of US$3.4 billion to US$5 billion, and to reduce interest rate margins down financing space.
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