Market Players Emphasize Caution

Default rates may be settling down to the long-term averages and demand for paper in both the primary and secondary loan markets may be strong, but market players caution investors and arrangers not to let their guard down.

  • 02 Nov 2003
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Default rates may be settling down to the long-term averages and demand for paper in both the primary and secondary loan markets may be strong, but market players caution investors and arrangers not to let their guard down. In the loan defaults and credit quality panel discussion, the call for caution was sounded. Howard Tiffen, a senior portfolio manager in Van Kampen's Senior Loan Division, asked "Do we have the seeds for the next downturn embedded into the deals of today?"

Although the bursting of the telecom bubble and other industry specific blow-ups are for the most part in the past, one distressed debt expert told the market to be wary of unexpected shifts in other industries. One aspect of this current market that causes concern is the level of liberalism and acceptability of the high-risk debt that many firms were able to refinance even though the debt was rated in the CCC category. He believed that not all of these financings will work out.

Tiffen stressed that investors and arrangers will have to maintain discipline. The market needs to preserve the strength of collateral packages in deals and the early warning system through covenants, he said, adding that investors should take a good look at the collateral and make sure the security interests are perfected. But to the extent that the collateral packages are structured correctly, the loan quality should hold up reasonably well, noted another buysider.

  • 02 Nov 2003

GlobalCapital European securitization league table

Rank Lead Manager/Arranger Total Volume $m No. of Deals Share % by Volume
1 Bank of America Merrill Lynch (BAML) 4,755 19 11.75
2 Citi 4,288 14 10.60
3 Rabobank 2,633 4 6.51
4 Goldman Sachs 2,615 4 6.46
5 Barclays 2,603 8 6.43

Bookrunners of Global Structured Finance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 18 Jul 2017
1 Bank of America Merrill Lynch 57,210.26 177 12.39%
2 Citi 56,957.04 171 12.34%
3 Wells Fargo Securities 47,551.45 149 10.30%
4 JPMorgan 32,965.91 111 7.14%
5 Credit Suisse 23,990.96 75 5.20%