At $10.2 billion, middle market sponsored volume fell 12% from the second quarter, though it remains up from the $8.2 billion issued in the first quarter. From a cumulative standpoint, sponsored volume continues to fall short of 2015’s run rate: year-to-date volume stands at $30 billion, a 19% decline from the comparable period last year. 2016 may now shape up to be the slowest for sponsored lending since 2009.
Totaling just $7.33 billion, sponsored middle market loan volume reached a six-year low in the first quarter — exceptionally weak even when viewed against the traditional seasonal pattern of lighter volume. On the heels of a sluggish year in 2015, Fifth Street remained cautious in its outlook for the new year; yet, volume dropped more precipitously than expected. Sponsored issuance was down 45% from Q4/15 and 31% on a year-over-year basis.