United States

KPMG Capital Advisory Q3 2014 Credit Markets Update

Oct 13, 2014
From the Advisory Institute and the Global Enterprise Institute

KPMG Corporate Finance LLP Capital Advisory's 3Q 2014 Credit Markets Quarterly provides a snapshot of credit market activity July through September 2014, including a general overview, trends, pricing, and structures. Key insights include:

  • New-issue leveraged loan market activity slowed in the third quarter as an increase in M&A-related volume was offset by slower opportunistic deal flow amid continued net outflows in both high yield bond funds and loan mutual funds
    • New-issue leveraged loan volume totaled $132 billion between July and September, including $93 billion of institutional tranches as compared to $157.7 billion/$113.1 billion in the second quarter.
    • Year-to-date volume stands at $460 billion/$334.6 billion institutional, down from $480.2 billion/$366.3 billion during the comparable period last year.
  • The market for opportunistic deals softened as retail investors pulled an estimated $9.4 billion from loan mutual funds in the biggest quarterly redemption since 2001. That left the higher-cost CLO market to fill the void amid the pullback.
  • With issuers putting refinancing and recap activity on the sidelines, M&A deal flow represented more than half of all quarterly volume and pushed to a post-Lehman-bankruptcy high of $79.2 billion.
  • With issuers still benefiting from no shortage of market liquidity, covenant-lite loan volume reached $212.6 billion during the first three quarters of 2014 which represents 46% of all new-issuance leveraged loans.


Read Q3 2014 Credit Markets Update