Loans and High Yield

Corporate issuers now dominate Europe’s high yield market, but investor appetite is showing signs of its old fickleness. As Victor Jimenez reports, issuers can still depend on the market, but may have to pick their windows carefully in 2016.

While the last few years have been all about the European high yield bond market rapidly developing into a dependable financing source for private equity sponsors, 2015 saw the loan market fight back. But as Max Bower and Victor Jimenez point out, it has done so at a time when LBO sponsors face increasing competition from IPOs and trade buyers.

GlobalCapital asked loan market participants for their votes for the Syndicated Loan, Leveraged Finance and Private Placement Awards 2016, in November.

2015 was meant to be the year that direct lenders conquered all before them, as banks’ retreat from mid-market lending became a rout. But the opposite has happened. Despite the enormous weight of money pouring into funds, banks are still there, and funds are having to deal with it. Ross Lancaster reports.

LGC Group, the UK life sciences company, will hold a bank meeting on January 13 for £500m of debt to finance its sale by Bridgepoint to KKR.

Malaysian low cost carrier AirAsia is set to make its first outing to the international bond market having mandated three banks to arrange a series of fixed income meetings.

High yield investors are facing a unique proposition with Jiangsu NewHeadLine (NHL) opening books to a three year dollar bond on January 6, in what would be a rare high yielding credit that is linked to a local Chinese municipal government.

A $600m loan for the upstream oil and gas arm of Perusahaan Gas Negara (PGN) has seen commitments worth $100m come in so far.

The International Swaps and Derivatives Association this week published an initial list of 35 bonds to be considered as deliverables in the forthcoming Abengoa credit event auction, which will settle 2014 credit default swaps, but not updated 2003 transactions.

European high yield specialists hope the continent's market can repeat in 2016 its sharp outperformance compared with the US market last year — but history suggests that the two markets tend not to diverge for long.

Acadia Healthcare, the US psychiatric and behavioural health care provider, has agreed to buy UK peer the Priory Group from Advent International for around £1.5bn.

Abengoa, the Spanish construction and renewable energy group that is in pre-insolvency proceedings, signed a €106m loan on December 24 to pay employees' December wages, but will need more cash this month to avoid a full insolvency filing.