Lynn's Feed
Apr 17, 2015

GE Capital sale shakes up U.S. middle market lending

NEW YORK, April 17 (Reuters) – General Electric Co’s
plans to sell most of its finance unit, GE Capital, will create
opportunities for new lenders in U.S. middle market leveraged
loans as a dominant player in commercial lending and sponsor
finance leaves the field.

GE announced plans on April 10 to shed approximately $200
billion in GE Capital assets, including its $74 billion U.S.
commercial lending and leasing unit and its $16 billion sponsor
finance business, which finances private equity buyouts.

Apr 9, 2015

TRLPC: Leveraged loans, loan funds have upward momentum – Lipper

NEW YORK, April 9 (Reuters) – U.S. leveraged loans and bank
loan mutual funds could build on the momentum gained in the
first quarter, while lagging high-yield bonds as investors reach
for yield in an ongoing low rate environment, according to
Lipper.

The hemorrhaging that wiped out $36 billion of retail
investor money from loan funds over 31 straight weeks was
interrupted in the first quarter, with one week of inflows in
February and moderation when outflows resumed.

Mar 31, 2015

TRLPC: US loan volume sank in Q1 as refis faded, regulations bit

NEW YORK, March 31 (Reuters) – U.S. syndicated loan issuance
sank to a two and a half-year low in the first quarter, as fewer
companies refinanced debt and banks kept a lid on deals that
regulators consider risky.

Companies borrowed $350 billion in the syndicated loan
market so far this year, down 27 percent from around $480
billion in last year’s first quarter, even with mergers and
acquisitions heating up, according to Thomson Reuters LPC. M&A
was concentrated in the investment grade sector.

Mar 11, 2015

TRLPC: Regulatory oversight tugs leverage in US buyouts to 2-year low

NEW YORK, March 11 (Reuters) – U.S. regulators’ attempts to
reign in risky lending are proving successful as leverage levels
on the biggest buyout loans have fallen to a two-year low,
according to Thomson Reuters LPC data.

Total leverage for large buyouts announced in the first
quarter of 2015 to date averaged 5.91 times earnings before
interest, tax, depreciation and amortization (Ebitda), below the
six times levels that regulators are trying to get banks to
avoid.

Feb 27, 2015

Retail loan investors return as rate rises near

NEW YORK (Reuters) – Retail investors are returning to bank loan mutual funds following seven straight months of outflows, with the Federal Reserve more clearly signaling an interest rate hike and higher secondary loan market prices starting to attract momentum buyers, investors and strategists said.

The first weekly inflows of $130 million broke a 31-week streak of outflows in the week ending February 18. Although net flows turned negative again with $118 million withdrawn in the week ending February 25, they have moderated and are seen turning positive with Fed rate hikes nearer, these sources said.

Dec 17, 2014

U.S. regulators’ leveraged loan policies starting to bite

NEW YORK (Reuters) – Lenders scaled back on underwriting large debt-laden buyouts for low-rated companies in the fourth quarter, signaling that U.S. warnings to regulated banks against these highly leveraged transactions are gaining traction.

Loans testing regulatory guidelines keep getting done, but banks appear to be more judicious, based on new Thomson Reuters LPC data, even as uncertainties about compliance linger.

Dec 17, 2014

TRLPC: U.S. regulators’ leveraged loan policies starting to bite

NEW YORK, Dec 17 (Reuters) – Lenders scaled back on
underwriting large debt-laden buyouts for low-rated companies in
the fourth quarter, signaling that U.S. warnings to regulated
banks against these highly leveraged transactions are gaining
traction.

Loans testing regulatory guidelines keep getting done, but
banks appear to be more judicious, based on new Thomson Reuters
LPC data, even as uncertainties about compliance linger.

Nov 21, 2014

Confusion over leveraged loans despite regulators’ insight

NEW YORK (Reuters) – Regulators’ attempts to clarify U.S. leveraged lending guidelines have answered some questions raised by banks, but also added fresh layers of complexity into loan underwriting decisions, banking sources said.

Banks have been trying to stick to U.S. leveraged lending guidelines since March 2013, using a process of trial and error that erred on the side of lenience and attracted regulators’ ire and closer scrutiny.

Nov 7, 2014

U.S. regulators still concerned about banks’ leveraged loans

By Greg Roumeliotis and Lynn Adler

(Reuters) – Federal regulators said on Friday that their 2014 review of U.S. bank loans showed the proportion of risky leveraged loans was the same as it was the year before, but they warned banks that they will carry out more reviews as risky loans continue to rise in absolute terms.

Making junk-rated loans to companies that are often owned by private equity firms is a lucrative, high-margin business for major Wall Street banks. But regulators are worried that the underwriting guidance they issued last year is not being heeded.

Oct 23, 2014

TRLPC: OCC signals flexibility with leverage loan ratio

NEW YORK (Reuters) – Limits on loans that regulated banks handle for companies with high amounts of junk-rated debt are not set in stone, an official from the Office of the Comptroller of the Currency said Thursday.

A debt-to-Ebitda leverage ratio of 6.0 times, which U.S. regulators have determined would raise concern, is not a hard line when considering compliance with federal leveraged lending guidance, Darrin Benhart, deputy comptroller for Credit and Market Risk at the OCC, said Thursday at the Loan Syndications and Trading Association’s annual conference in New York.