Liquidity reaches peak for leveraged loans, pushing terms tighter

Liquidity from CLOs at the peak of their reinvestment periods is leading to unhealthy conditions in the European leveraged loan markets, with the imbalanced supply-demand dynamic forcing investors to accept ever more aggressive terms. And with competition from a strengthening European high yield bond market and pressure from a performing US loan market, European leveraged loans bankers are pushing terms ever tighter in an effort to keep up.

  • 12 Apr 2013
Although new European CLOs (such as Pramerica’s new €300m facility — see cover story) will take off the sharpest of edges, bankers warn that the bubble of CLO liquidity will burst before the end of the year, giving leveraged loan market participants a taste of boom and bust ...

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Rank Lead Manager/Arranger Total Volume $m No. of Deals Share % by Volume
1 Citi 2,007 6 16.61
2 Goldman Sachs 1,798 4 14.88
3 BNP Paribas 1,434 4 11.87
4 Barclays 1,097 2 9.08
5 Morgan Stanley 1,094 2 9.06

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5 Barclays 13,499.53 45 7.13%