Jan 14, 2014
From the Advisory Institute
KPMG's Capital Advisory Q4 2013 Credit Markets Quarterly Update provides a look at Q4, and the full 2013 year review of credit market activity, including a general overview, trends, pricing and structures.
Key insights for Q4 2013 credit markets include:
- As hungry investors continued to chase yield, the leveraged loan market had a record year in 2013 with $605 billion of total loan volume, surpassing 2007’s prior record of $535 billion by 13%.
- The overall loan investor base broadened during the year with retail, institutional, structured finance and relative value investors driven to the asset class due to a combination of risk adjusted yields and below-trend default rates.
- Lenders are cautiously optimistic heading into 2014.
- M&A volumes are expected to be thin driven by the landscape for large LBO deals which remains challenging in the face of regulatory and market-based headwinds.
- However, lenders claim the drumbeat of deal screening continues but not at a pace that might rival 2006/2007.
- As a result, refinancings and recapitalizations are expected to remain the key drivers of loan production in 2014 – at least for the first half of the year.
For further details, read KPMG Capital Advisory Q4 2013 Credit Markets Update.
Head of U.S. Corporate Finance