LevFin Wrap - Investors picky as pipeline offers promise

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Market Wrap

LevFin Wrap - Investors picky as pipeline offers promise

Huw Simpson's avatar
Michal Skypal's avatar
  1. Huw Simpson
  2. +Michal Skypal
12 min read

High Yield Primary

A ‘week is a long time in politics’ Harold Wilson famously said, and doubtless even he would appreciate just how quickly sentiment can shift in today’s European capital markets. There’s a slight pause in issuance this week as both issuers and investors take stock on what’s been a (briefly) manic spree. Just two new real names to report, with Aggreko and Polynt offering fresh supply in a choppy market, while Iliad extended its bookbuilding into this week.

Leveraged Loans Primary

Beggars turned to choosers as loan investors have the biggest selection to pick from in primary since the market reopened in September. Buysiders finally feel like the belle of the ball deciding swiftly which suitor is even worth the effort of due diligence in a crowded market.

“We are not stretched to play anything with high risk and that is felt in the market. Everyone knows by now that they had a good year so we are not eager to deploy cash. I would not be surprised if some deals start to widen,” said one CLO analyst.

High Yield Secondary

Across HY, instruments were down on the week an average of -0.10 pts (35% +0.37 pts | 61% -0.37 pts), but have rallied somewhat since mid-week. By industry, Real Estate was once again fared worst (-0.35 pts), although this is largely due to poor performance at Aggregate Holdings - while bonds at the Adler Group and Adler Real Estate level have recovered an average of ~3 pts. Consumer Staples (-0.25 pts) and Healthcare (-0.25 pts) also traded poorly, while Energy (+0.14 pts) and Communication Services (+0.02 pts) posted the only industry level gains. 

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