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By: David Bilkis, White & Case
High yield bond and leveraged loan issuance for US Leveraged buyouts (LBOs) recovered strongly over the past year, but Q1 2021 saw a drop on the previous quarter as direct lenders and a high volume of secondary buyouts ate into an already tight supply of opportunities.
In the leveraged loan market, US LBO issuance for Q1 2021 came in at US$20.9 billion-more than double the US$8.6 billion of issuance in Q3 2020, but down from the US$32.9 billion recorded over the final three months of last year.
High yield bond LBO issuance, meanwhile, totaled US$1.5 billion over Q1 2021, down from US$1.6 billion in Q3 2020 and the US$1.9 billion recorded in the final quarter of last year.
Overall LBO issuance trailed refinancing, repricing and amendment activity, which totaled US$387.5 billion for high yield bonds and leveraged loans over the quarter, by some distance.
Tight supply of new deals holds market back
The dip in leveraged finance lending to LBO credits in Q1 2021 comes despite big increases in US private equity (PE) deal activity. US deal value for PE buyouts and secondary buyouts totaled US$160.2 billion in Q1 2021-the highest quarterly buyout deal value total since Q2 2007 and a 67% gain in the US$107.6 billion recorded in Q4 2020.
Leveraged finance investors have been eager to fund these deals, but have been...................... To view our full article Click here
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