H1 Covenant Trends; Automotive Issuers Analysis; TalkTalk RCF Lenders Hold Pitches With Advisors
Aug 1, 2023
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The podcast discusses covenant trends in leveraged loans and high-yield bonds, key credit metrics for European automotive issuers, TalkTalk's RCF lenders' pitches, and highlights of the primary market activities.
Refinancings in 2023 showed improved covenant terms and reduced investor pushback, especially in loans.
Introduction of a loan scoring system in 2023 indicated decreased dilutive debt capacities and aligning capabilities between bonds and loans.
Deep dives
Covenant Terms in 2023 First Half Compared to 2022
Refinancings dominated in both bond and loan markets in the first half of 2023 and represented improvements in covenant terms compared to 2022. Investor pushback decreased due to terms being recycled from prior years, with loans showing a significant pushback percentage when excluding add-ons.
Loan Scoring and Market Trends
Introduced loan scoring system in 2023 to rate loans on protective to aggressive scales; market saw a decrease in capacities for dilutive debt and an alignment in capabilities between bonds and loans, with more aggressive terms in bonds.
Future Market Outlook and Concerns in Refinancing
Anticipate continued significance of refinancings in both markets, with potential for M&A transactions influencing terms; concerns arise for companies like Toc Toc facing maturity and covenant issues, reflecting divisions in market views on their refinancing prospects.
Each episode of Reorg's weekly EMEA Core Credit podcast series features detailed discussions on issues and companies across the credit lifecycle. This week’s podcast includes discussions on:
-The half-year report for 2023 on leveraged loans and high-yield bond covenants and what trends can be seen;
-Key credit metrics trends for European automotive issuers and the market prices of their debt instruments;
-TalkTalk’s RCF lenders who are taking pitches from financial advisors ahead of 2024 maturity; and
-Highlights of the primary market.
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#leveragedfinance #highyield #restructuring #performingcredit #distresseddebt #debtrestructuring #leveragedloans
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