Debtwire Par: 3Q19 US Leveraged Insights Report

07 October 2019

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3Q19 US Leveraged Insights report highlights key trends in the leveraged loan and high yield bond markets.
 
Institutional loan issuance down sharply YoY, but new money deal flow holds up better.
 
Institutional loan issuance climbed to USD 131bn in 3Q19 but the new money portion slipped to USD 71bn. This left institutional loan activity down nearly 50% year-over-year, though the new money component is off only 14%.
 
Overall leveraged loan issuance is down 45% to USD 625bn, with the new money share down 34% at USD 340bn.
 
CLOs continue to drive demand for loans, though some managers say they are uncertain about CLO deal volume for the rest of the year due to the challenging arbitrage, given where loan pricing is at the moment and no big tightening on the liability side expected.
 
High yield bond issuance totaled USD 54.2bn in 3Q19, down from USD 65.3bn in 2Q19, topping the USD 48.7bn recorded a year ago in 3Q18. M&A related high yield bond volume was a robust USD 12.8bn in 3Q19, driven by a strong quarter of non-LBO M&A activity at USD 11.2bn. It’s been a good year for high yield bond issuance overall with year-to-date volume climbing to USD 176.2bn, a 17% gain over the year ago period.