Partners Caroline Leeds Ruby (London-Finance) and Joshua Thompson (New York-Finance) have written a chapter on global trends in leveraged lending in The International Comparative Legal Guide to Lending & Secured Finance 2016.
The year 2015 saw periods of intense and robust deal flow with stable credit markets, but also periods of malaise and instability during which credit markets were overwhelmed by a “maelstrom of fears.” Macro, market and regulatory challenges have caused the leveraged loan market to be at times a deep and liquid haven for prudent investors, but also a market in which investors have sold off heavily when faced with spikes in risk or relative value opportunities. The regulatory environment has reduced incentives for bank market makers to hold significant loan inventory and investors have faced periods of illiquidity for harder-to-trade loans. Longer term principal debt investors have, in turn, taken advantage and driven market terms during the most intense periods of dislocation.
This chapter discusses specific trends in leveraged lending from 2015.