Through the first half of the yr, €6.6bn (£5.56bn) of personal credit score services have been refinanced on the European broadly syndicated mortgage market.
In line with a bi-annual survey on European leveraged finance carried out by PitchBook LCD, there are a selection of explanation why corporations would possibly hunt down extra financing from the non-public credit score markets within the second half of the yr.
27 per cent of market members stated market volatility/execution certainty can be the driving issue behind refinancing; whereas 27 per cent cited the rising market depth; and an extra 27 per cent stated that the provision of payment-in-kind debt made non-public credit score extra interesting.
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One other 18 per cent stated flexibility of phrases can be the principle motive why they might select to refinance utilizing non-public credit score.
Elsewhere within the survey, 18 per cent of market members pointed to geopolitical volatility as the most important danger to leveraged credit score portfolio efficiency over the following six months. 15 per cent cited credit score high quality dangers because the second-biggest menace.
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In the meantime, one survey respondent stated that “new funds, particularly CLOs, are having so as to add some dangerous credit to their portfolios so as to get the economics to work, which might end in poor efficiency going forwards if these credit score dangers aren’t correctly managed.”
The survey additionally discovered that 46 per cent of respondents imagine that non-public credit score allocations will improve within the second half of this yr, underlining the continued recognition of the asset class.
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