Leveraged Loan Risk Continues to Trouble Regulators

According to Reuters, the leveraged loan market has only grown more aggressive in the last six months, with almost 75% of broadly syndicated loans arranged in Q1/2019 covenant-lite compared to 58.9% of such loans arranged in the same period in 2013.

Regulator Warnings on Leveraged Loans Go Unheeded

Reuters reported banks are continuing to issue highly leveraged loans in the wake of loosening rules this year, despite regulator warnings of credit market frothiness.

WSJ: Risky Leveraged Loans Making a Comeback

The Wall Street Journal reported that with relaxed government regulations, risky loans are making a comeback and few seem worried about it.

Leveraged Loan Buyers Demanding Better Terms

Bloomberg reported money managers are beginning to demand better rates and are avoiding riskier deals, as illustrated by a $1.475 billion loan for the buyout of chemicals company SI Group.

Moody’s Predicts Lower Recovery Rates Will Lead to Defaults

The Wall Street Journal reported that Moody’s has predicted increased demand for floating-rate leveraged loans has eroded credit quality and will lead to more defaults and lower recovery rates in an economic downturn.

U.S. Syndicate Lending at All-Time High Due to Mergers, Refis

Reuters reported that syndicated lending is peaking, partly due to lowered corporate taxes and a push to borrow before interest rates rise. The result is an upswing in mergers and company refinancings.

Leveraged Loan Market Suffering From Market Fatigue

Reuters reported 275 companies have turned to the leveraged loan market in the last three months, which has caused the $1 trillion market to suffer from market fatigue

Direct Lenders Increasing Share of Middle Market Loans

Reuters reported direct lenders are expanding their role in underwriting working capital loans, threatening banks’ share of the middle market leveraged buyout space.

U.S. Leveraged Loan Market Heating Up, Prices Falling

Reuters reported the U.S. leveraged loan market has started 2018 with a high demand, allowing companies to reduce pricing on loans.

EMEA Lending Drops to $894B in 2017

Reuters reported that syndicated lending in Europe, the Middle East and Africa dropped in 2017 to its lowest volume level since 2012.