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Leveraged Finance

Global Home > Leveraged Finance

Late Cycle Risk Foremost on Minds of U.S. CLO Investors

While both the leveraged loan and U.S. CLO markets are seeing more late cycle behavior emerging, the make-up of the markets themselves has changed quite radically of late, according to Fitch Ratings in its 2019 Virtual Investor Video Series for Structured Finance.

Energy Sector Will Push U.S. High Yield Default Rate Near 2%

The energy sector will lead U.S. high yield default volume for the third consecutive month following Weatherford International Public Ltd's bankruptcy, according to the latest High Yield Default Insight report from Fitch Ratings. 

Annual Manual 2019

Annual Manual summarizes the major factors driving risk and opportunity for the various players in the leveraged finance space, including corporate bond and loan investors, CLO investors, corporate debt issuers, private equity sponsors, and regulators.

2019 Late Cycle Roundtable

What Peak Cycle Conditions and Economic Deceleration Means for U.S. Leveraged Finance

How will U.S. CLOs, asset managers, and the Leveraged Finance markets overall fare under peak cycle conditions and a potentially decelerating economy? Justin Patrie, head of Fitch Wire, leads the discussion in the latest installment of the Late Cycle Roundtable series.

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CLO Indentures Vary the View of 'CCC' Exposure

 U.S. broadly syndicated loan (BSL), CLO triple-C (Caa/CCC) concentration limitations, and excess haircuts exposures are not easily comparable or transparent across CLOs due to variety of indenture definitions

Global CLO Chart Book

Spreads Dampen CLO Reset Activity in Europe and U.S.

Increasing senior spread on collateralized loan obligation (CLO) notes in the U.S. and Europe has dampened reset and refinancing activity in both markets, Fitch Ratings says in its latest Global CLO Chart Book. New issuance was up slightly in the prior quarter in Europe to EUR6.9 billion in first-quarter 2019 (1Q19), while new and re-issue levels were flat at $26.8 billion in the U.S. 
 

European High Yield Index

Issuers Returned to European High Yield Market in 1Q19

Refinancing-related high yield (HY) bond issuance in the 'BB' category returned to the European market in the first quarter of 2019, followed by issuance in the 'B' category. Issuance was supported by secondary market recovery thanks to shifts in US and European monetary policy. The continuing momentum is likely to prompt 'CCC' issuance to come back in the second quarter.

Limited Loan Activity Logged in 1Q2019

U.S. institutional leveraged loan issuance had an anaemic start to the year, with limited refinancing and repricing activity to supplement the new deals coming to market. 

Fitch Group and the LSTA Bring Transparency to Loan Market with New Content

Fitch Group and the Loan Syndications and Trading Association (LSTA) today announced that Fitch Group's leveraged loan expertise will now be available to LSTA members alongside the LSTA's other resources.

Auto Sector Downturn Unlikely to Impact U.S. CLOs

A slowdown in global auto demand is unlikely to have an impact on U.S. CLOs through their auto-related exposure. U.S. broadly syndicated loan (BSL) collateralized loan obligations (CLOs) under Fitch's surveillance are underweighted in their exposure to the auto sector compared to the broader market. 
 

Windstream Widely Held in U.S. CLOs but Exposure Low

Windstream Holdings Inc.'s bankruptcy filing on 25 February increases the number of U.S. broadly syndicated loans (BSL) CLOs with some default exposure, but aggregate default exposure remains low

US LEVERAGED FINANCE AND CLO WEEKLY

Loan Default Rate Drops, Neiman Debt Exchange, Asset Sale Provisions

The March TTM US institutional leveraged loan default rate is expected to fall to 1.1% from 1.7% last month – the lowest level since 2011. Fitch Ratings looks at leverage-based sweeps of proceeds from asset sales as one example of recent documentation changes in its latest terms and conditions special report series.

2019 Outlook - Leveraged Finance Roundtable

Michael Paladino, Head of US Leveraged Finance, discusses the outlook for leveraged loans and high yield bonds in 2019 with Lyuba Petrova and Eric Rosenthal of the Leveraged Finance team and Jessica Reiss from Covenant Review.

Outlooks 2019

Global Leveraged Finance

As part of our 2019 Outlooks series, we take a forward look at the high yield and leveraged loan markets in the U.S. and Europe. Browse Global Leveraged Finance Outlooks

US Leveraged Finance

Trends in new issuance, portfolio credit quality, and defaults and recovery for leveraged finance in the US.

European Leveraged Finance

Trends in the leveraged loan and high-yield bond markets and points out what to watch in the near term.

Leveraged Loan Default Rate to Finish 2018 Under 2%

The steady decline in institutional leveraged loan defaults will continue through the end of 2018 and likely well into next year, according to Fitch Ratings in a new report. However, a growing Tier 2 Loans of Concern list highlights uneasiness that has spurred recent bouts of market volatility, significant loan fund outflows and declining bids.

Topics in Leveraged Loans and CLOs

Fitch Ratings sponsored and participated in a variety of conferences for broadly syndicated loan (BSL), middle market (MM) and collateralized loan obligation (CLO) participants in September through November. Venues included New York and Los Angeles in the U.S. and Tokyo, Japan and Seoul, Korea in the Asia Pacific region. This research takes up some of the most commonly discussed themes and provides Fitch’s views on these subjects.

Liquidation Often the Outcome for Bankrupt U.S. Retailers

Further evidence of shifts in shopping patterns among U.S. consumers lies with the companies that have filed for bankruptcy or are currently in distress, according to Fitch Ratings in a new report.

What Investors Want to Know: Topics in Leveraged Loans and CLOs

Fitch Ratings sponsored and participated in a variety of conferences for broadly syndicated loan (BSL), middle market (MM) and collateralized loan obligation (CLO) participants in September through November. Venues included New York and Los Angeles in the U.S. and Tokyo, Japan and Seoul, Korea in the Asia Pacific region. This research takes up some of the most commonly discussed themes and provides Fitch’s views on these subjects.

Lev Loans and CLO Investors Focused on Downturn, Regulations and Docs

As 2018 comes to a close, leveraged loan and CLO investors are primarily focused on the economic and credit cycle, the time till the next downturn, the effects of regulation and looser documentation, Fitch Ratings says in a report about recently attended conferences.

Rise of ‘BBB’s in Corporate Finance – Risks to Watch

As part of our  2019 Risks to Watch series, Megan Neuburger, Managing Director in the U.S. Corporate Finance team, discusses the growth of ‘BBB’ credits during this credit cycle and the potential implications in the next downturn.  See our latest 2019 Credit Outlooks.

Fitch 50

Leverage Increases for the Fitch 50 Group of Speculative Grade Issuers

Leverage has increased for the Fitch 50 with the addition of several notable lower-rated issuers, according to the eighth edition of Fitch Ratings' "Fitch 50" - a look at debt structures and credit profiles for 50 prominent U.S. leveraged issuers.

Length of U.S. Bankruptcies Shrinks Significantly

According to a new Fitch Ratings bankruptcy case study report: "The compressed timeframe is benefitting creditors, minimizing employee and trade union uncertainty, and lessening disruption to operations," said Sharon Bonelli, Senior Director of Leveraged Finance.

US CLO Default Exposure Low for Now

While defaults in Fitch-monitored U.S. broadly syndicated loan (BSL) CLOs reached a low point in August, new defaults are likely in the near term, including some that are widely held.

Bankruptcies Still Few & Far Between for U.S. Industrials

Bankruptcies remain a rare occurrence for companies in the Aerospace & Defense (A&D) and Industrial & Manufacturing (I&M) sectors, according to a new report published by Fitch Ratings.

US Retail Leveraged Loan Defaults Drop to Lowest Rate in 12 Months

The July trailing 12-month default rate for U.S. retail leveraged loans fell to four percent from seven percent last month, marking the lowest point since June 2017, according to a new Fitch Ratings report.

Healthcare, Food, Beverage and Consumer Bankruptcy Enterprise Values and Creditor Recoveries

Despite U.S. healthcare defaults at a 16-year low, profits of some issuers are challenged. Default rates for healthcare, consumer and food & beverage sectors are lower than the U.S. market overall - a trend expected to continue absent unexpected external factors as cash flows are relatively stable.

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