After strong first half, dividend recaps set to wane

Euro debt 230x150
By Olivier Holmey
21 Aug 2014

One of the main sources of primary issuance in the European leveraged loan and high yield bond market so far this year may be set to take a hit, as bankers have expressed concerns over sponsors’ ability to achieve aggressive dividend recaps following investor push back in late July.

Dividend recapitalisation, by which a payment is made to a company’s shareholders, was the single largest use of proceeds from leveraged debt deals in the first half of 2014, Fitch said in a report on Thursday. But that might be set to change, market participants told GlobalCapital.

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