Europe Highlights 

M&A issuance accounted for more than 80% of loan deal activity in the second quarter (Q2 2017: 58%). This scale of new issuance has boosted lenders’ pricing power and their ability to resist more aggressive documentation.

On the private credit side, funds have continued to cement their position across Europe as a reliable financing alternative. The ability to deliver in size, at speed, with compelling financing terms, provides for strong execution certainty.

Banks have continued to adapt, forming strategic alliances with both insurance funds and private debt funds, to deliver transaction scale and execution certainty to their clients.

LBO transactions per region covered

UK Highlights 

Despite the continuing backdrop of an undefined Brexit – and the subsequent political uncertainty on a domestic and European level – the UK leveraged loan market volumes remained robust in the first half of 2018.

Borrowers continue to take advantage of attractive credit conditions; 2018 has experienced significant volumes of opportunistic refinancings, repricings and recapitalisations.

TYPE OF REFINANCING BY STRUCTURE

The UK continues to see strong private debt activity in the market with unitranche comprising 55% of the deals in Q2 2018.

France Highlights 

The French market continued to perform well in Q2 2018, primarily driven by large transactions, with volumes significantly increasing compared to Q1 2018.

The high volume of larger deals has seen the recent trend of excess liquidity beginning to reverse, with lenders pushing back on more aggressive terms (e.g. increased margins in Kolack Snacks & INSEEC).

Conversely, in the mid-market there have been no marked changes in financing terms that borrowers are securing.

number OF DEALS PER QUARTER

French leveraged financing activity has continued to gain momentum, with issuance increasing to 30 deals in Q2 2018 (vs. 17 in Q1 2018) with LBOs accounting for two-thirds of deal flow.

DACH Highlights 

The DACH leveraged loan market has maintained considerable momentum in Q2, with buyout activity accounting for over 70% of deals in this edition of the Debt Market Monitor.

Private credit lending activity continues to expand its market share within the region, however banks remain involved via first out / second out structures.

ISSUe volume per deal type

In Q2 2018, the continued investment of the DACH leveraged loan market was primarily driven by private credit lending activity.

Spain Highlights 

In Spain, leveraged financing activity has decelerated in Q2, with only seven loan issuances over the quarter (following only 13 issuances in Q1 2018).

With depressed deal volume and continued excess liquidity in the market, banks aiming to retain market share are offering flexible, back-ended structures, as well as carrying out refinancings and small-ticket dividend recapitalisations ‘under the radar’.

NUMBER OF DEALS PER QUARTER

Since the peak in Q2 16 with 14 deals tracked in the quarter, Spain has seen a general decline in leveraged loan activity, with less than ten deals in Q2 2018.

DC Contacts

Jonathan Trower
Managing Director
UK
T: +44 20 7856 0912
E: jonathan.trower@dcadvisory.com

Ciara O’Neill
Managing Director
UK
T: +44 20 7856 0925
E: ciara.oneill@dcadvisory.com

Nicolas Cofflard
Executive Director
France
T: +33 (0)1 4212 4964
E: nicolas.cofflard@dcadvisory.com

Daniel Gebler
Managing Director
Germany
T: +49 (0)69 9720 0429
E: daniel.gebler@dcadvisory.com

 

Frank Jung
Managing Director
Germany
T: +49 (0)69 9720 0431
E: frank.jung@dcadvisory.com

Manuel Zulueta
Partner
Spain
T: +34 (0)91 5241 124
E: mzulueta@montalbanatlas.com

Joaquin Gonzalo
Partner
Spain
T: +34 (0)91 5241 124
E: jgonzalo@montalbanatlas.com