Leveraged Commentary & Data (LCD)

Identifying the ‘fulcrum’ debt instrument — the loan or bond most likely to be converted into equity ownership during a restructuring — used to be a straightforward exercise, and a vital tool employed by distressed investors. But you don’t hear much about fulcrum debt these days, mostly because the proliferation of liability management exercises means that equity does not change hands via a restructuring as often as it used to. But it does still happen. So what role, if any, does fulcrum debt play in today’s market? PitchBook LCD’s Jack Hersch takes a Deep Dive in the plight of the fulcrum, and where it might end up down the distressed road. https://lnkd.in/epbthrNc PitchBook #distressedDebt #credit #leveragedloans

Private equity shops are rushing to the US syndicated loan market in record numbers to secure dividend credits, where a portfolio company takes on additional senior debt while PE sponsors write themselves increasingly larger checks via the loan proceeds. This activity is particularly important to sponsors, as they continue to find traditional exit routes, like LBOs or IPOs, largely unavailable or unattractive.?There’s much more on dividend deals in this analysis. https://lnkd.in/erMjrk7i PitchBook Tyler Udland, CFA #privateequity #leveragedloans #credit

Private credit webinar & roundtable: What comes after a ‘Golden Era’? Join thought leaders from PitchBook LCD, DBRS and private credit professionals for analysis and outlook on today’s private credit sector, plus a panel discussion of market dynamics and direction. Complimentary registration: https://lnkd.in/euBcZwkK Date: March 12, 2025 Time: 10 a.m. EDT Duration: 1 hour PitchBook #credit #privatecredit #privateequity

Direct lenders, many of whom are still coming to terms with today’s reality of sharply lower credit spreads, have found something else to worry about: tariffs. If tariffs do take hold in 2025, which borrower industries and segments present the most risk? As PitchBook LCD’s Private Credit News and Research teams detail in this data dive, some that do are crucial to this burgeoning segment, most notably technology and healthcare. https://lnkd.in/en5cmQNf PitchBook Zack Miller Nicholas Cisneros Abby Latour #credit #privatecredit #tariffs

Distressed investors are eyeing federal mortgage concerns Fannie Mae and Freddie Mac, whose preferred shares continue to trade at roughly half their par value, though they’ve surged lately on hopes that a Trump Administration might release the entities from government conservatorship. That conservatorship was a “temporary” solution to Fannie/Freddie’s woes that has been in place since the Global Financial Crisis. PitchBook LCD’s Sean Czarnecki has much more on what is a complicated situation for Fannie and Freddie, and potential investors, in this distressed debt Deep Dive. https://lnkd.in/dhtpq5rk PitchBook #credit #distressedDebt

Loan investors and arrangers looking forward to increased LBO financing opportunities in 2025 might have to temper expectations regarding yield and credit spreads. The cost of raising buyout funding in the US syndicated loan market has fallen drastically so far this year, fueled by increased investor demand for risk and amid a continued storm of loan repricings and refinancings. https://lnkd.in/diyXV2pP PitchBook Marina Lukatsky #PrivateEquity #credit #leveragedloans

CLO ETFs, which in a relatively brief time have amassed some $25 billion of AUM in the US, are becoming a thing in Europe. PitchBook LCD's Jean-Marc Poilpré takes a deep dive into the workings of these vehicles, the role of authorized participants and how CLO fund managers deal with the creation and redemption of ETF shares. https://lnkd.in/deibqCRc PitchBook #credit #CLOs #structuredfinance

Continued investor demand for leveraged loan paper in Europe is powering a repricing wave more pronounced than the market saw at year-end, taking credit spreads to their lowest levels since 2021. And participants think the wave could have significant room to run. https://lnkd.in/es9jH4D4 PitchBook David Cox #credit #leveragedloan

Europe’s restructurings market might be getting its first taste of US-style creditor-on-creditor violence courtesy Hunkemoller, a Dutch lingerie retailer, over which a US hedge fund (a defendant) and a group of now-subordinated lenders (the plaintiffs) are sparring. The proceedings will be closely watched for clues as to how aggressive restructuring techniques, such as uptiering, might take hold more broadly in Europe, especially after the recent Serta Simmons ruling. There’s much more on Hunkemoller here: https://lnkd.in/eQmWfk3n PitchBook Jean-Marc Poilpré #credit #distresseddebt

Europe’s private credit players are hoping that 2025 does indeed bring a surge of LBO financing, though headwinds remain. One way private equity sponsors are adapting in today’s still-sluggish environment: continuation funds, which allow managers to extend the holding period of assets. In this latest analysis, PitchBook LCD’s Francesca Ficai takes stock of Europe’s private credit market as it moves into the new year. https://lnkd.in/eD8e8RtB PitchBook #privatecredit #privateequity #credit