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PDF | Research | Week of Aug 5 2024

Quote of the Week

“Maybe things weren’t as rosy as we thought they were.”

– Eric Merlin, co-head of global markets, Citizens Financial Group.

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CLO Awakening (Part One of Two)

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Letter from London (Second of Two Parts)

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For a long-time practitioner and educator in the private capital space, there’s nothing like engaging with sophisticated investors digging deep into nuances of the asset class. In London and the Midlands, these discussions centered around such questions as: 


1. How will growth of private markets impact appetite in direct contribution plans and semi-liquid strategies?

2. Do investors have appetite for evergreen structures vs. term, levered vs. unlevered? 

3. How should pension plans (and managers) incorporate sustainability into portfolios?

4. What are the fastest growing asset classes for UK investors? 

5. What will the UK government’s push into lending mean for privates?...


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Chart of the Week

Cut Rate

The Bank of England lowered its benchmark rate for the first time since Covid. 

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Source: The Daily Shot


(Past performance is no guarantee of future results.)

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Loan Stats at a Glance 

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Contact: Ryan Brown / PitchBook LCD

PDI Picks

Under-allocations laid bare

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Limited partners have struggled to invest as much in private credit as they would like, as our new study shows.

Having been through a period where the denominator effect and slower distributions combined to hamper their allocation efforts, limited partners now find themselves substantially under-allocated to private credit...

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Leveraged Loan Insight & Analysis

 Retail loan funds inflows climbed to US$2.7bn

in July, taking YTD total to US$14.1bn

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Retail loan funds last week posted their first outflow in 6 weeks, with US$91m exiting. Despite this, investors were attracted to loan funds in July, with inflows for the month amounting to a robust US$2.7bn...

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Contact: CJ Doherty / LSEG

The Pulse of Private Equity

Deals with nonbacked companies as targets

as a share of all PE buyouts by quarter

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Borrowing costs remain elevated and will likely stay that way for the remainder of 2024. As a result, PE firms continue to look further down market at companies with lower, more favorable purchase prices to compensate for the lack of leverage...

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Contact: Garrett Black / PitchBook

KBRA Direct Lending Deals: News & Analysis

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TTM Default Volume, Count

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Contact: Eric Rosenthal / KBRA DLD

Middle Market & Private Credit

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Comparing Business Development Companies and Middle Market Collateralized Loan Obligations

(Part 2)

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There can be a meaningful difference in the seniority of the assets in a MM CLO versus those in a BDC...

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Contact: Winnie Fong / FitchRatings

Covenant Trends 

Percentage of Loans with Uncapped Synergies & Cost Savings EBITDA Addbacks

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Contact: Steven Miller / Covenant Review

High-Yield Bond Statistics

Launched Volume

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New-issue Yields

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Weekly Fund Flows

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Weekly fund flows source: Lipper

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Contact: Robert Polenberg / LevFin Insights

Debtwire Middle-Market

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The blue line in the chart is the current dividend yield of the *VanEck BDC Income ETF (currently at 11.7% as of 5 August, highest YTD) that tracks the overall performance of publicly traded business development companies (BDCs, are lenders to privately held middle-market businesses that tend to be below investment grade or not rated, with most lending comprising of senior secured loans)...

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Contact: Suneet Chandvani/ Debtwire 

Private Debt Intelligence

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Private debt fundraising recovers toward trend

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Read more in Private Debt Q2 2024: Preqin Quarterly Update


Private debt funds raised $50.4bn in the second quarter of 2024, boosted by a more settled economic outlook...

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Contact: William Bennett-LynchPreqin

Middle Market Deal Terms at a Glance

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Contact: Stefan Shaffer / SPP Capital Partners

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This publication is a service to our clients and friends. It is designed only to give general information on the market developments actually covered. It is not intended to be a comprehensive summary of recent developments or to suggest parameters for any prospective financing opportunity.