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Hate the Game, Not the Player: An Update on the Primary Loan Market
Jun 4, 2024
Winnie Cisar and Kerry Kantin discuss the strength in the leveraged loan primary market in 2024 due to reduced recession fears and limited M&A activity. They highlight the increase in demand over supply, leading to a wave of repricings benefiting issuers. The team also analyzes market rate-cutting expectations, factors influencing the Fed's actions, and current trends in the primary loan market, including LBO and M&A activity, interest rates impact, specific deals like Mark E., and insights on the private credit market competition.
22:13
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Quick takeaways
- Abatement of recession fears and lack of M&A activities have led to high demand over supply in the leveraged loan market, favoring issuers and sparking a wave of repricing.
- Contrasting views exist on the potential timing and extent of Fed rate cuts, with uncertainty surrounding their actual implementation despite market anticipations of stability.
Deep dives
Leverage Loan Repricing Surge
The podcast discusses the surge in repricing activities within the leverage loan primary market, attributing it to the abatement of recession fears and limited M&A activities. With high demand and limited supply, issuers have managed to reduce spreads due to the excess of available capital, resulting in over $400 billion repriced in the year-to-date, representing a significant portion of market activity. The reduction in interest expenses through repricings and refinancings has positively impacted borrowing costs and interest coverage ratios.
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Discover
highlights
Listen to the best highlights from the podcasts you love and dive into the full episode