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Leveraged Loans

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  • Three UK companies have already flagged their interest in the Bank of England’s emergency commercial paper funding scheme for large businesses, announced on March 20. The big three rating agencies will help fast-track unrated investment grade issuers into the scheme, but the strict eligibility limits leave leveraged and smaller companies out in the cold.
  • A rush to dollars in recent days has caused dysfunctions in various corners of the financial markets. The US Federal Reserve has rushed to put out the flames, including with new measures on Monday.
  • Corporate funding markets have been thrown into turmoil faster than anyone can remember by the aggressive onslaught of the coronavirus and government measures to put society in emergency shutdown. Borrowing costs have soared for all firms, but markets are not closed. As Jon Hay, David Rothnie and Silas Brown report, the coming weeks will sort those that can still raise cash from those that need rescuing.
  • Banks financing KKR’s £4.2bn purchase of waste management firm Viridor from Pennon were able to demonstrate certainty and deliverability of the financing for the deal to the Pennon board, despite chaotic markets which have seen rapid plunges in the prices of leveraged loans and high yield bonds.
  • Firms across Europe are clamouring for crisis funding but while debt advisory bankers have joined the frontline in finding solutions some admit they may struggle to cope with the sheer scale of the challenge, writes David Rothnie.
  • Bankers trying to arrange finance for companies during the coronavirus crisis are being hindered by competition rules that control when and how they can talk to other banks.