PDF | Research |Week of Feb 21, 2022
Quote of the Week
"This is what appeared unbelievable to most investors, and this is actually happening"
– Slava Smolyaninov, chief strategist, BCS Global Markets,
on Russia’s invasion of Ukraine.
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Capital Markets Outlook: Cov-lite Spotlight
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2022 Capital Markets Outlook
(Second of a series)
Churchill’s Kelli Marti and Jessica Nels continue their commentaries related to the firm’s 2022 Capital Markets Outlook [link]:

From loan issuance, to LBO and M&A activity, to record CLO volume, 2021 was an unprecedented year in many forms. Coming off that record-breaking activity, we consider what lies ahead in 2022. In December 2021, our content partner S&P / LCD surveyed buy-side, sell-side and advisory professionals to gauge sentiment for the year ahead.

Here’s a summary of its findings:

  • Issuance will continue at record levels due to demand for floating rate debt from fixed income investors;
  • The loan market does not expect a correction in 2022, but instead anticipates periods of “mini volatility”;...
2022 Capital Market Outlook 

Topics include: 
Cov-lite trends
Inflation & rising interest rates
LIBOR to SOFR transition
Mega-tranche uni trend
ESG takes center stage
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Last Week’s Results
Lenders: Borrower-friendly concessions to win a deal in 2022?
Chart of the Week
Benchmark Tests
The SOFR curve is flatter than LIBOR, creating impetus for the credit spread adjustment.
Source:  IBA & Federal Reserve Bank of New York | Date: January 18, 2022
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Stat of the Week
Loan Stats at a Glance 
PDI Picks
The lure of the lease
As the hunt for yield gathers even more intensity, the triple-net lease strategy is winning support...
Leveraged Loan Insight & Analysis
BDCs post further NAV gains
BDC earnings season is underway, with funds that have filed to date posting positive performance overall in 4Q21, topping off a strong year for the asset class...
The Pulse of Private Equity
Fewer emerging lenders in 2021
2021 marked a decade low for “emerging firm” private debt fundraising, according to PitchBook’s Annual Global Private Debt Report. Only 64 private debt funds were raised last year by emerging firms...
Contact: Alex Lykken / PitchBook
Covenant Trends 
Percentage of Loans with F&C Tranche Grower
High-Yield Bond Statistics
Weekly fund flows source: Lipper
DL Deals: News & Analysis
Volatility primes more records
for jumbo unitranche loans
Jittery markets are priming new records for jumbo unitranche financing. At least a few mandates are in the works that exceed Galway Insurance’s $3.4 billion record last year...
Private Debt Intelligence
Investors’ target allocations indicate
bright fundraising future for private debt
Nearly every type of investor increased their target allocations to private debt over the past year, in part due to low real returns from public debt investments...
Debtwire Middle-Market
Leveraged debt issuance slows from 2021 pace
Source: Debtwire Par
Leveraged lending kicked off the new year at a slower pace than seen in the prior two years, with institutional loan issuance of USD 48.3bn and high yield bond issuance of USD 16.9bn. While it is a month-over-month improvement from the December 2021 low, compared to this time last year, loan volume is down 44%...
Feb Update: Middle Market Deal Terms at a Glance
Select Deals in the Market
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.